RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/Q3/BRB/6
25 April 2002
(02-2389)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Requests Pursuant to Article 27.4 of the Agreement
on Subsidies and Countervailing Measures
Responses by BARBADOS to Questions Posed by
SWITZERLAND1 and the UNITED STATES2
The following communication, dated 24 April 2002, has been received from the Permanent
Mission of Barbados.
_______________
SWITZERLAND
Research and Development Programme
Q1. Regarding the Research and Development Allowance Programme, Switzerland would
like to request Barbados to supplement the information provided inn its notification, e.g.: How
many companies did profit from this allowance in the last fiscal year?
Reply
In 2001, some 10 companies benefited from the Research and Development Allowance.
International Business Incentives and Society with Restricted Liability
Q2. Regarding the International Business Incentives and the Tax and Duty concessions
Societies with Restricted Liability Programmes, could Barbados clarify if these incentives are
granted to national as well as foreign legal entities and the same application procedures apply toboth, national and foreign companies? Further, could Barbados elaborate on what kind of
criteria meet the definition of  “ specially qualified individuals ” in order to receive the 35 per cent
income tax exemption?
Reply
Under the International Business Act, the incentives are granted to both national and foreign
legal entities that are licensed to operate as Inte rnational Business Companies.  The same application
procedures apply to both national and foreign companies.  Similarly, in the case of Societies with
                                                     
1 G/SCM/Q3/BRB/2
2 G/SCM/Q3/BRB/6G/SCM/Q3/BRB/6
Page 2
Restricted Liability, the incentives are granted to both national and foreign companies and the
application procedures are identical.
The "specially qualified individuals" that would qualify for the 35 per cent tax exemption are
those individuals who could provide the services  that an international business company would
require to carry out its business effectively but cannot acquire from within CARICOM or retain from
outside Barbados without special tax concessions.  The applicants are required to submit documents to
prove their qualifications.  The applications are evaluated to ensure that the services provided by the
individual are not obtainabl e in Barbados or CARICOM.
THE UNITED STATES
Fiscal Incentive Programme
Export Allowance
Research and Development Allowance
International Business Incentives
Societies with Restricted Liability
Q1. Could Barbados please explain whether these programmes provide any other incentive
apart from the full or partial exemption from import duties and internal taxes?
Reply
The benefits provided under these programmes specifically relate to customs duty and income
tax relief.  However, the International Business Companies and Societies with Restricted Liability
also benefit from exemption from exchange controls.
Q2. Please provide the normal customs duty, consumption tax and income tax rates
companies would normally pay absent these programmes.
The following duties and taxes would be payable in the absence of these programmes:
Import Duty
Environmental Levy
Value Added Tax (VAT)
Income TaxMFN Rate as listed in the Customs Act
1%
15%
40%
Q3. Tax and Customs relief under these programmes range are provided for long periods of
time. Could Barbados please explain how it would modify these programmes so that subsidises
do not extend beyond any extension period provided?
Reply
The current legislation governing the operation of these programmes does not refer to any
particular date for the end of the programme itself.  The relevant legislation would therefore be
amended as necessary to reflect Barbados’ international obligations.
Fiscal Incentives Programme
Q4. Please indicate the Industry sectors for the 14 companies that received benefits under
the Fiscal Incentives Programme.G/SCM/Q3/BRB/6
Page 3
Reply
The 14 approved enterprises currently benefiting from the programme are those involved in
manufacturing under the categories of food, fabricated metal, plastic, tobacco, paper & printing,textiles, non-metallic mineral and other manufacturing (jewellery).
Q5. Please provide data on the value of total exports of the 14 companies that benefited from
this programme.
Reply
The total exports for the 14 companies that be nefited from this programme in the years 2000
and 2001 are as follows:
Year Exports
2000 14,287,404
2001 22,335,399
Research and Development Allowance
Q6. Please explain why eligibility is contingent upon exportation to non-CARICOM
countries.
Reply
The Research and Development Allowance is given to businesses engaged in export outside
of the CARICOM region to encourage exporters to pursue markets outside of CARICOM in order to
become more competitive internationally and hence improve their operational efficiency.
Q7. Could Barbados please provide informatio n on the number of companies that benefit
from this programme?
Reply
In 2001, some 10 companies benefited from the Research and Development Allowance.
Q8. Please explain which industry sectors benefit from the deduction from taxable income
under this programme.
Reply
All manufacturing sectors are eligible for benefits under this programme.
Q9. Please explain when this programme came into operation.
Reply
The Research and Development Allowance came into operation in 1986.G/SCM/Q3/BRB/6
Page 4
International Business Incentives
Q10. Please explain when this programme came into operation.
Reply
Incentives to international business companies date back to 1965 when the legislation
pertaining to such incentives was enacted.  Ho wever, the current act, the International Business
Companies Act came into force in 1991.
Q11. Could Barbados please explain how “high quality goods and services” are defined?
Reply
Barbados has a policy of adopting and implementing internationally accepted standards and is
cognisant that within a trade context its trade in goods and services must conform to such standards.
It is therefore in this context that the term "High quality goods and services" is used.
Q12. Please explain why the amount of tax ex emptions under this programme increase two-
fold from 1999 to 2000, while the number of co mpanies only increased form eight to nine.
Reply
The increase in the tax exemptions of these companies over the time period reflects an
increase in their level of profitability.
Societies with Restricted Liability
Q13. What industry sectors benefited from the tax and duty concessions under this
programme?
Reply
The company that benefited from the tax and duty concessions under this programme is
involved in the manufacturing of electro-mechanical devices.
Export Grant and Incentive Scheme
Q14. Could Barbados please explain what industry sectors have benefited from grants under
this programme?
Reply
The industries involved in the manufacturing of food, beverages, chemicals, pharmaceuticals,
furniture, handicrafts, garments, building materials and consultancy have benefited under this
programme.
Export Rediscount Facility
Export Credit Insurance Scheme
Export Finance Guarantee Scheme
Q15. Please explain when these programmes came into operation.G/SCM/Q3/BRB/6
Page 5
Reply
The Export Rediscount facility commenced in 1981.  The Export Credit Insurance Scheme
and Export Finance Guarantee Scheme were put into place in 1978.
__________