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2. Manufacturing Establishments

107. In the case of agricultural enterprises, the production of the raw material entails, as a rule, considerable manufacturing processes, and for the finished “raw” product universal market prices exist. The same is true of the products of mining enterprises in N.E.I. Consequently, when a foreign enterprise produces the raw material here and sells it on any of the world exchanges, the entire profit is regarded as taxable in N.E.I. If the foreign enterprise uses its raw material in manufacturing at a factory in another country, the world market price for the raw material is used to delimit the profit allocable to N.E.I. However, N.E.I. is not a real industrial country, so that this question of determining manufacturing profits is of no practical importance here. As the wage standard for the native labourer is very low, it is not at all impossible that eventually more and more industries will be established here. There can be no doubt that, in this case, a profit would be allocated to the local manufacturing establishment in accordance with the same principles as are applied in apportioning profits between a foreign manufacturing establishment and a local sales establishment (see paragraphs 104 and 105).

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