This section reproduces section 374 of the Income Tax Act, 1967. There are two changes, however. The first change is the bringing in of the proviso to subsection (2) to obviate the necessity to issue new certificates for corporation tax purposes where certificates have already been issued for the purpose of income tax and corporation profits tax. The second change is the omission of a paragraph of the old section. That paragraph which excluded from the definition of exempted trading operations all operations carried out in the course of trading in Great Britain or Northern Ireland as distinct from trading with Great Britain or Northern Ireland, was incorporated in section 374 because profits from trading in Great Britain or Northern Ireland by a company resident in this country would have been exempt from British income tax under the residence agreement. Accordingly, if they were exempt here under the Shannon relief they would have borne no income tax at all. This would have meant unfair competition with British companies trading in Britain. Such profits arising to an Irish resident company from a branch or agency trading with Britain or Northern Ireland are now liable to British corporation tax so that the question of a double exemption from tax no longer arises.
SECTION 70.
What is the reference to 1990, just to satisfy my curiosity?
That is the time at which the tax exemption runs out.
That is all tax exemptions?
Yes.
Do all the Shannon exemptions run out in 1990?
Yes.
The 15-year limitation does not apply?
No. If it starts next year or the year after it is still 1990.
If it started before 1975, it still runs to 1990?
Yes.
Have the Government considered the possibility of extending it, as it is now within the 15-year period?
It is not a matter, of course, within the entire discretion of the Irish Government. It would have to be agreed with the EEC which has already stressed its grave reservations about the operation of assistance at all.
The Protocol was negotiated by Dr. Hillery on behalf of this country to enable these matters to be retained.
Yes, but not to be extended.
It is fortunate for this country that that Protocol was negotiated.
Agreed.
The Shannon airport area is on the banks of the Shannon estuary which it is hoped to develop as a major commercial transshipment area. Would the Minister give consideration to the extension of attractions to firms to locate heavy industry or similar undertakings in the estuary area as a whole? By that I include, for example, oil refineries or other large undertakings, possibly a smelter, which would be ideally suited to the Shannon estuary?
The incentives for the location of industry and downstream activities are, of course, under constant review. No doubt the matters mentioned by Deputy O'Malley will have thoughtful consideration when the time is right.
Is the time not right now?
Well, it is an ongoing consideration.
A case could equally be made for the Suir estuary.
This section is about Shannon Airport. You are out of order talking about the Suir.
(Dublin Central): Are there some particular concessions granted to Shannon that are not granted to other exporters as regards tax relief because they are in a special category?
Yes, the Shannon is in a special category—it enjoys exemption as a tax-free area.
(Dublin Central): As regards other exports in the tax free area, too?
It has its own legislation.
Yes, it has its own legislation. It was created separately.
(Dublin Central): Do manufacturers have additional concessions?
They are somewhat more extensive than apply elsewhere. They are contained in subsection (5).
I would like to inquire from the Minister if non-manufacturing activities within the Shannon free custom zone attract this relief because SFADCo have in recent years had a certain measure of success in attracting warehousing operations in the zone and in attracting office operations such as offices for international insurance companies which are not trading in Ireland, and in addition facilities for computer firms who are doing work for America and continental countries. While these are not as useful as, I suppose, manufacturing industry in the zone, nonetheless they give worthwhile employment and it is valuable at this time when there is such heavy unemployment in the region. Do those non-manufacturing activities within the zone which SFADCo succeeded in getting in there over the years attract this relief?
Yes, once the certificate is issued by the Minister, and I have issued such certificates in respect of such services. The main difference between what will qualify for exemption in Shannon and what will qualify elsewhere in the State is that elsewhere in the State the relief is given only in respect of manufactured goods, whereas in Shannon it is virtually anything that is carried on within the Shannon area. Packaging, handling, servicing, all these things, can qualify.