It is similar to what we did in the last section except that it relates to transactions between associated persons. The section was designed to defeat a scheme of tax avoidance which otherwise would be possible. A company operating in the State outside the airport might sell raw materials, components or partly finished goods, at abnormally low prices to a closely associated company operating in the airport and entitled to exemption under Part V and in this way siphon off some of the profits to the exempted company. Under the section, the income of the liable company is, in such case, to be computed as if the goods had been sold at the prices at which they would have been sold if the purchaser and the seller were independent parties dealing with one another at arm's length.
SECTION 72.
Question proposed : "That section 72 stand part of the Bill."
The Minister is giving an assurance that there is no change here? This was dealt with some years ago and you are just repeating it?
That is correct.
On that question, may I ask about the process whereby the computation is made? Who will decide what the normal market prices would be?
The Revenue Commissioners will make the assessment and it will then be up to the taxpayer either to agree with it or to dispute it.
Will it be appealable in law?
The normal appeal procedures will apply. It will go to the appeal commissioners, and the Circuit Court.
It has been operating? It has not given rise to any difficulties?
No, no more than usual.
Question put and agreed to.