I move amendment No. 25:
In page 14, to delete lines 2 to 5, and to substitute the following:
" in-trade, or
(v) goods or services used by the taxable person for the purposes of an exempted activity (whether carried on in the State or elsewhere) or for purposes other than those of his business,
but subparagraph (v) shall not operate to prevent a deduction of tax if, and to the extent that, the tax relates to goods and services used for the purposes of any of the following activities:
(I) transport outside the State of passengers and their accompanying baggage,
(II) services specified in paragraph (i), (xi) or (xii) of the First Schedule, and agency services in regard thereto, supplied outside the Community, and
(III) insurance services and the provision of credit, and agency services in regard thereto, directly in connection with the export of goods to a place outside the Community.".
This amendment clarifies the position regarding the extent to which relief of input VAT is allowable in relation to exempted activities when they are carried on outside the State. It specifies that, in general, no relief is allowable in respect of exempted activities wherever carried on. As an exception, relief is allowable on (1) passenger transport carried on anywhere outside the State; (2) on certain services when supplied outside the EEC. The amendment makes no effective change in respect of foreign passenger transport but it introduces a new relief in respect of the following services when supplied outside the EEC: (1) supply of stocks, shares or other securities; (2) banking and insurance services; (3) lending money or affording credit otherwise than by means of hire purchase or credit sale transactions; (4) agency services in regard to these services. The services in question will be deemed to be supplied outside the Community when they are performed for a client established outside the Community having no establishment in this country or, if he has no establishment, that his permanent address is outside the Community. This is on foot of Articles 9 and 17/3(c) of the Directive.