RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/TPKM/8/Rev.1
10 May 1999
(99-1792)
Working Party on the
Accession of Chinese TaipeiOriginal:  English
ACCESSION OF CHINESE TAIPEI
Notification Pursuant to Article XVI.1 of the GATT 1994 and
Article 28.1 of the Agreement on Subsidies and
Countervailing Measures
Industrial subsidies
Revision
The following communication has been received from the Representation of the Separate
Customs Territory of Taiwan, Penghu, Kinmen and Matsu with the request that it be circulated to
members of the Working Party.
_______________
I. INTRODUCTION AND GENERAL REMARKS
This notification is made in compliance with obligations of the Customs Territory of Taiwan,
Penghu, Kinmen and Matsu (hereinafter referred to as “Chinese Taipei”) under Article 28.1(a) of the
Agreement on Subsidies and Countervailing Measures (hereinafter referred to as the "Agreement").
Article 28.1(a) of the Agreement requires the notification of subsidies programs which were
established within Chinese Taipei before it signed the WTO Agreement and which are inconsistent
with the provisions of this Agreement.  This provision is understood to apply to subsidies within the
meaning of Article 1 which are prohibited under Article 3.1 of the Agreement.
The decision whether to report any program in this notification rests on the sometimes
difficult judgement as to whether a particular program involves a "financial contribution" by a
government, a benefit being conferred, while meeting the requirement of being "specific" and
"contingent upon export performance" or "contingent upon the use of domestic over imported goods."
Although Article 28 does not contain a provision similar to Article 25.7 of the Agreement, it
is Chinese Taipei’s position that in order to achieve greater transparency, any notification made under
Article 28.1(a) shall also not prejudge either the legal status of a measure notified under GATT 1994and the Agreement, the effects under this Agreement, or the nature of the measure itself.  Moreover,
of the subsidies notified hereunder, it may be that only part of the subsidies involves an element
inconsistent with the Agreement.
Furthermore, while Chinese Taipei has made considerable efforts to submit a comprehensive
notification, there may still be room for improvement through experience accumulated by reference to
Members' practices and comments and the Committee's review of notifications submitted by
Members.WT/ACC/TPKM/8/Rev.1
Page 2
1. Title of the Program
Tax credits for the creation of internationally recognized brands.
2. Period Covered by the Notification
Fiscal years 1995-1997(July 1994 to June 1997).
3. Policy objective and/or purpose
The primary goal of the tax incentive is to encourage private enterprises to create their
own internationally recognized brands.
4. Background and responsible authorities(a) Law:
- Statute for Upgrading Industries (hereinafte r   referred to as the "SUI"), Article 6;
- The SUI was promulgated on December 29,1990 and amended on January 10, 1995, and
will cease to be effective on December 31, 1999.
(b) Responsible authorities:- Industry Development Bureau, Ministry of Economic Affairs;
- Ministry of Finance.
5. Form
Credit against Corporate income tax.
6. To whom and how assistance is provided
All companies invested in the creation of in ternationally recognized brands are eligible
for tax credit. Up to 15 per cent of expenditure sp ent for promoting in th e international market
any trademark, service mark or certification mark created by company itself and registered
with Bureau of  Standards, MOEA, can be deducted from payable corporate income tax.
If the total expenditure reaches NT$3,000,000 in the same taxable year, 10 per cent
thereof may be deducted from the corporate inco me tax payable for that year; if such total
expenditure reaches NT$5,000,000 and “Taiwan Exquisite Product Mark” authorized by
MOEA is used with the brand, 15 per cent of the total expenditure may be deducted from the
income tax payable for that year . In case the amount of corporate income tax levied for the
current year is less than the amount of tax credit , the balance of tax credit may be carried over
to the ensuing four years.
The regulation on creation of international br ands will be amended to be consistent with
WTO requirements, upon accession, without any recourse to a transition period. Any future
programme in this area would be consistent with WTO requirements and would not
reintroduce prohibited subsidies.WT/ACC/TPKM/8/Rev.1
Page 3
7. Amount
Not available
Unit: thousand NT
Year No. of Cases Tax Deduction Amount
1994 16 16,304
1995 31 31,574
1996 34 18,987
Total 81 66,865
8. Duration
The program was initiated in 1991 and will terminate when the Statute expires.
9. Trade effects or related statistical data
In light of the scope and nature of the program, it is not possible to determine what, if any,
trade effects which may  result from this program.
__________