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REGULATION AND AGREEMENT CONCERNING THE CONTROL SYSTEM WITHIN THE DIAMOND PROCESSING
AND WHOLESALING INDUSTRY

1. Introduction
With reference to the diamond industry's assumption to contribute a «fair share of tales», the Diamond High Council representing the diamond process and wholesaling industry and the Direct Tax Authority agree to a method of controlling the diamond processing and wholesaling industry.
This control system will not affect the existing legal and regulate-г у provisions of the Income Tax Code of 1992 nor the Royal Decree implementing (he aforesaid Code, which both apply in full

2. Undertakings concerned
This control system applies to diamond undertakings in the diamond wholesale and processing industry. It applies in principle to diamond undertakings falling within the scope of the VAT exemption provided by article 42.54.1" of the VAT Code.
The control system does not apply to brokers trading diamonds on behalf of third parlies without buying and selling those diamonds themselves, and which are usually paid on the basis of a commission fee. If these brokers keep a small accessory stock of diamonds out of which they occasionally sell, then the control system only applies to the gross margin for the sales made out of their own slock.
In the diamond processing industry, the control system only applies to undertakings buying rough diamonds for themselves with a view to processing these diamonds and selling them on as polished diamonds. This control system does not apply to undertakings that work on a manufacturing cost basis ("entrepreneurs") and process diamonds that remain the property of the principal and the undertaking only receives a manufacturing fee for their services, do not fall within the scope of this control system. If these undertakings keep an accessory small stock of diamonds with a view to processing and selling these diamonds, then the control system only applies to determining the gross margin on the sales from their own processed stock.