Commentary

D4.122A Offshore receipts in respect of intangible property

Corporate tax
Corporate tax | Commentary

D4.122A Offshore receipts in respect of intangible property

Corporate tax | Commentary

D4.122A Offshore receipts in respect of intangible property

From 6 April 2019 onwards, the offshore receipts in respect of intangible property (ORIP) rules state income tax will be charged1 where:

  1.  

    •     a person who is not UK resident and is not resident in a full treaty territory (ie a jurisdiction with which the UK has a double tax treaty containing a non-discrimination provision)

  2.  

    •     receives revenue or capital amounts in respect of intangible property rights, and

  3.  

    •     those rights, either directly or indirectly, enable, facilitate or promote UK sales

The amount received is known as a 'UK-derived amount'. This treatment would also extend to rights derived directly or indirectly from the original intangible rights2.

UK sales are any services, goods or other property provided in the UK or provided to persons in the UK and can arise in the same year as a UK-derived amount arises or any other tax year3. The provision of online advertising constitutes a UK sale to the extent that the advertising is targeted at persons in the UK4. Resellers and distributors of goods or services that do not make any change to the goods or services are looked through when determining UK sales. This also includes the scenario where any difference to the goods or services is merely incidental to providing the item5.

Where there are third party sales in the UK and the intangible property or associated rights are an insignificant part of enabling the facilitation or promotion of those sales, the UK-derived amount received is

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