/NTM/W/236 Page 40

NOTES

For the purpose of this Agreement:

The term "direct taxes" shall mean taxes on wages, profits, interest, rents, royalties, and all other forms of income, and taxes on the ownership of real property.

The term import charges" shall mean tariffs, duties, and other fiscal charges not elsewhere enumerated in this note that are levied on imports.

The term "indirect taxes" shall mean sales, excise, over, value added, franchise, stamp, transfer, inventory and equipment taxes, border taxes and all taxes other then direct taxes and import charges.

"Prior stage" indirect taxes are those levied on goods or services

used directly or indirectly in making the product,

"Cumulative"

indirect taxes are multi-staged taxes levied where

there is no mechanism for subsequent crediting of the tax if the goods or services subject to tax at one stage of production are used in a succeeding stage of production.

"Remission of taxes includes the refund or rebate of taxes.

The signatories recognize that deferral need not amount to an export
subsidy where, for example, appropriate interest charges are collected.
The signatories further recognize that nothing in this text prejudges
the disposition by the Contracting Parties of the specific issues raised
in CACT document 1/4-22.

MTN/NTM/W/236
Page 41

The signatories reaffirm the principle that prices for goods in
transactions between exporting enterprises and foreign buyers under
their or under the same contral should for tax purposes be the prices
which would be charged between independent enterprises acting at arm's
length. Any signatory may draw the attention of another signatory to
administrative or other practices which may contravene this principle
and which result in a significant saving of direct taxes in export
transactions. In such circumstances the signatories shall normally
attempt to resolve their differences using the facilities of existing
bilateral tax treaties or other specific international mechanisms,
without prejudice to the rights and obligations of signatories under the
General Agreement, including the right of consultation created in the
preceding sentence.

Paragraph (e) is not intended to limit a signatory from taking measures
avoid the double taxation of foreign source income earned by its enterprises
or the enterprises of another signatory.

Where measures incompatible with the provisions of paragraph (e) exist,

and where major practical difficulties stand in the way of the signatory
concerned bringing such measures promptly into conformity with the

Agreement, the signatory concerned shall, without prejudice to the
rights of other signatories under the General Agreement or this Agreement,
examine methods of bringing these measures into conformity within a

reasonable period of time.

In this connection the European Economic Community has declared that Ireland intends to withdraw by 1 January 1981 its system of preferential tax measures related to exports, provided for under the Corporation Tax Act of 1976, whilst continuing nevertheless to honour legally binding commitments entered into during the lifetime of this system.

43-841 O-79-4

MTN/NTM/W/236
Page 42

Paragraph (h) does not apply to value-added tax systems, and bordertax adjustment in lieu thereof and the problem of the excessive remission of value-added taxes is exclusively covered by paragraph (g).

The signatories agree that nothing in this paragraph shall prejudge or influence the deliberations of the panel established by the GATT Council on 6 June 1978 (C/M/126).

In evaluating the long-term adequacy of premium rates, costs and losses of insurance programmes, in principle only such contracts shall be taken into account that were concluded after the data of entry into force of this Agreement.

An original signatory to this Agreement shall mean any signatory which adheres ad referendum to the Agreement on or before 30 June 1979.

GENERAL AGREEMENT ON

TARIFFS AND TRADE

Committee on Anti-Dumping Practices

-

COM.AD/W/90
Page 2

AGREEMENT ON IMPLEMENTATION OF ARTICLE VI

OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE

The parties to this Agreement,

Recognizing that anti-dumping practices should not constitute an unjustifiable impediment to international trade and that anti-dumping duties may be applied against dumping only if such dumping causes or threatens material injury to an established industry or materially retards the establishment of an industry;

Considering that it is desirable to provide for equitable and open procedures as the basis for a full examination of dumping cases;

Taking into account the particular trade, development and financial needs of developing countries; and

Desiring to interpret the provisions of Article VI of the General Agreement and to elaborate rules for their application in order to provide greater uniformity and certainty in their implementation;

Desiring to provide for the speedy, effective and equitable resolution of Hereby agree as follows: disputes arising under this Agreement;

The imposition of an anti-dumping duty is a measure to be taken only under the circumstances provided for in Article VI of the General Agreement and pursuant to investigations initiatedl and conducted in accordance with the provisions of this Code. The following provisions govern the application of Article VI of the General Agreement in so far as action is taken under anti-dumping legislation or regulations.

Article 2

Determinetion of Dumping

(a) For the purpose of this Code a product is to be considered as being dumped, i.e. introduced into the commerce of another country at less than its normal value, if the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country.

1The procedural action by which a signatory formally commences an investigation as provided in paragraph (f) of Article 6.