This section reproduces section 411 of the Income Tax Act, 1967.

Could the Minister give a brief explanation of what is the effect of the section?

Which way is the duty going?

Is there any change in the existing situation?

No.

There is a differential in the accounts between the home market and the export market. How do manufacturers claim income tax relief? Is it on invoices?

He would have to identify the export sales.

If a manufacturer exports, say, to Northern Ireland or to England and if the goods concerned are reimported, does that transaction qualify for export relief?

If goods are exported the relief is given to the exporter but if it came to the knowledge of the Revenue Commissioners that the exporter reimported, the relief would not be given. It is wrong for anybody to reimport into the State goods for which the export relief has been given.

I agree on that but assuming that the goods are exported to a distributor in England and he decides to reimport, apart from the manufacturer, is that deemed as an ordinary import?

That can happen, unfortunately, and we are not in a position because of our EEC obligations to do anything about it.

On subsection 2, could the Minister give us a mathematical example of what this drawback would be?

There is such an example in the memorandum which has been handed out to members.

I note that Irish and foreign duties are not taken into consideration.

In the formula—export sales over total sales multiplied by the net profit and the resulting figure and the statement—this would be a distorted result because of the fact that the drawback of Irish excise duty and the foreign import duty relate only to the export sales, and have nothing to do with the home sales. I do not understand what that means.

The duty arises only in relation to the export sales. There will be no element of duty in relation to the Irish or home sales.

I am a little lost here. Why is the foreign import duty deducted? Is this duty charged on goods that are imported into the State?

No.

The foreign import duty is not related to export sales.

It is import duty into the foreign country.

The £200,000 export sales include the duty.

What happens then? Is the duty payable isolated from the net cost of the goods?

Perhaps we could go into sos to have this explained.