Amendments Nos. 6, 7, 21 and 44 are related and may be taken together.
SECTION 5.
I move amendment No. 6:
In page 6, line 1, to delete " rendering " and to substitute "supplying".
This amendment eliminates what is now the obsolete term "rendering" which inadvertently remained in the Bill and seeks to substitute the equivalent new term "supplying". Each of the other amendments you mentioned as being taken with amendment No. 6 does exactly the same thing.
This complies with the directive?
Yes.
Amendment agreed to.
I move amendment No. 7:
In page 6, line 3, to delete "rendering" and to substitute " supply ".
Amendment agreed to.
Question proposed: " That section 5, as amended, stand part of the Bill."
I have not got the exact reference in the section itself but looking at the explanatory memorandum I see that one of the effects of section 5, as amended, is to ensure that in the transfer of a business between two taxable persons the consideration in relation to the sale of goodwill will not be taxed. Perhaps the Minister would tell us something about this? In particular, would he address himself to the possibility that this might be used as an evasion mechanism in terms of the possible balancing out of consideration as between goodwill and other items in the transfer? If goodwill is a real thing that can be bought and sold, it seems to me odd that VAT should not apply to it in the same sense as the rest of the business. Am I misreading the purpose of the section?
I think so. It is true, as the Deputy has said, that goodwill is something that can be bought and sold, that has a cash value, but perhaps I could illustrate the point if I take a transfer of the stock of a business which clearly has a cash value. As between two taxable persons there is no liability for VAT on that. Even if they paid VAT they would recover it. It is really treating goodwill in the same way as one of the assets of a business.
Question put and agreed to.