WORLD TRADE
ORGANIZATIONG/SCM/N/38/EEC/Add.2
21 December 1998
(98-5125)
Committee on Subsidies
and Countervailing MeasuresOriginal:  French
SUBSIDIES
New and Full Notifications Pursuant to Article XVI:1
of the GATT 1994 and Article 25 of the Agreement
on Subsidies and Countervailing Measures
EUROPEAN COMMUNITIES
Addendum
The following addendum to the notification of  the European Community relates to subsidy
programmes of Belgium .G/SCM/N/38/EEC/Add.2
Page 2
BELGIUM
Introduction
Following recent reforms in Belgium, the major part of investment policy is now
constitutionally the responsibility of the Flemish, Walloon and Brussels regions.  Consequently, the
regions are also responsible for applying legislation on economic growth and aiding SMEs in their
respective areas.  In the Belgian notification of subsidies, the evaluation of whether the subsidy is
"general" or "specific" therefore relates to the regulations in force in each region.
There are very few data relating to the trade effects of most of the subsidies notified.  Given
the type of subsidies involved, it is considered that  their effect on international trade is insignificant.G/SCM/N/38/EEC/Add.2
Page 3
TABLE OF CONTENTS
                                                                                                                                         Page
1. Federal State................................................................................................................ .5
1.1. Special taxation schemes ............................................................................................... 5
1.1.1 Innovative firms, Law of 31 July 1984, Articles 68 to 76 ................................ 51.1.2 Conversion firms, Law of 31 July 1984, Royal Decree of
3 October 1988, Law of 22 December 1989 (Article 303),Law of 28 December 1990 (Article 18) ........................................................... 5
1.1.3 Employment zones, Royal Decree No. 118 of 23 December 1982 ................. 6
1.2 Tax measures to pr omote investment ........................................................................... 7
1.2.1 Deduction for investment, Articles 68 to 77 CIR92 ........................................ 7
1.3 Research and de velopment aid ...................................................................................... 7
2. Brussels – Capital Region............................................................................................ 9
2.1 Aid to economic growth ............................................................................................... 9
2.1.1 Order of 1 July 1993 on the promotion of economic growth in the
Brussels-Capita l region .................................................................................... 9
2.1.2 Economic Adjustment Law of 4 August 1978 ............................................... 10
2.2 Research and de velopment aid .................................................................................... 11
2.2.1 Subsidies for basic in dustrial research ........................................................... 11
2.2.2 "Prototype advances" ..................................................................................... 12
2.2.3 European programmes ................................................................................... 13
2.3 Aid to promote foreign tr ade ....................................................................................... 13
2.3.1 Order of 13 January 1994 on the promotion of fo reign trade ........................ 13
3. Walloon Region.......................................................................................................... 15
3.1 Aid to SMEs ................................................................................................................ 15
3.1.1 Law of 4 August 1978 on economic adjustment, as amended by the
Decree of 25 June 1992 - application orders of 9 July 1992 .......................... 15
3.2 Aid to disadvantaged regions ...................................................................................... 16G/SCM/N/38/EEC/Add.2
Page 4
                                                                                                                            Pag e
3.2.1 Law of 30 December 1970 on economic growth, as amended by the
Decree of 25 June 1992 - application orders of 9 July 1992 ....................................... 16
3.3 Research and technology aid ...................................................................................... 17
3.3.1 Decree of 5 July 1990 on aid and action by the Walloon region
to promote research and technolo gy, and its execu tion orders ...................... 17
4. Flemish Region........................................................................................................... 19
4.1 Aid to economic growth ............................................................................................. 19
4.1.1 Law of 30 December 1970 on economic growth ........................................... 194.1.2 Economic Adjustment Law of 4 August 1978 ............................................... 204.1.3 Decree of 15 December 1993 to promote economic growth
in the Flemis h region ..................................................................................... 21
4.2 Aid to integration of enterp rises (= social economy) .................................................. 23
4.3 Aid to enterprises for consultancy .............................................................................. 23
4.4 Research and de velopment aid .................................................................................... 23
4.5 Aid to shi pbuilding ...................................................................................................... 25
4.6 Aid to investment and setting up in agriculture,
Flemish Agricultural Investment Fund ....................................................................... 25G/SCM/N/38/EEC/Add.2
Page 5
1. Belgium – Federal State
1.1 Special taxation schemes
1.1.1 Innovative firms, Law of 31 July 1984, Articles 68 to 76(a) Form of the subsidy
Innovative firms originally benefited from the following tax concessions inter alia :
- Exemption for profits up to a maximum of 13 per cent of the capital for innovation
actually paid-up and remaining to be repaid at the beginning of the financial year;
- increased rate of deduction for investment (see hereunder);- exemption from tax on income from immovable assets for 10 years;
- exemption from graduated registration duty on capital inflow.
(b) Total amount in 1997
Exemption from corporate tax:  (NCG
*) BF 379 million.
Deduction for investment (see hereunder).
(c) Policy objective
To promote the creation of firms working in high technology sectors, set up from 1984
onwards and specially authorized.
(d) Duration
The Law of 28 December 1990 terminated this scheme, nevertheless:
- Firms whose applications were submitted before 22 July 1990 may still take
advantage of the tax benefits;
- capital paid up before 31 December 1990 may still be exempt from corporate tax;
- exemption from duty on capital inflow is only granted for capital paid up by
31 December 1990 at the latest;
- deduction from taxable income for capital inflow is permitted for shares subscribed
and paid up in 1990.
1.1.2 Conversion firms, Law of 31 July 1984, Royal Decree of 3 October 1988, Law of
22 December 1989 (Article 303), Law of 28 December 1990 (Article 18)
(a) Form of the subsidy
Conversion firms originally benefited from the following inter alia :
                                                     
*NCG = Net cost for government in BF.G/SCM/N/38/EEC/Add.2
Page 6
- Exemption from capital duty;
- exemption from corporate tax for 10 consecutive financial years, restricted to the part
of the dividends that did not exceed 13 per cent of the paid-up capital.
(b) Total amount in 1997
Exemption from corporate tax:  (NCG*) BF 3,865 million
(c) Policy objective
The tax scheme applies to firms set up specially to carry out a conversion project under a
"conversion contract" and established in one of the zones defined for this purpose in the
Royal Decree.
(d) Duration
This scheme has not been available since 22 July 1990, nevertheless:- for firms set up before 1 January 1990, exemption from corporate tax ends during the
fiscal year 2007;
- for firms set up between 1 January and 22 July 1990, exemption from corporate tax
ends during the fiscal year 2002;
- no exemption from corporate tax is granted to firms set up after 22 July 1990.
1.1.3 Employment zones, Royal Decree No. 118 of 23 December 1982(a) Form of the subsidy
Firms in employment zones originally benefited from the following inter alia :
- Total exemption from corporate tax on profits reserved and distributed for 10 years;
- total exemption from tax on income from movable assets for dividends distributed to
shareholders;
- exemption from tax on income from movable assets;
- exemption from graduated registration duty on capital inflow.
(b) Total amount in 1997
Immunity from corporate tax:   (NCG*) BF 260 million
(c) Policy objective
The tax scheme applies to enterprises set up in employment zones, whose limits have been
defined for Belgium's three regions in order to promote the creation of high-tech enterprises.G/SCM/N/38/EEC/Add.2
Page 7
(d) Duration
This scheme is no longer available, although enterprises currently benefiting from it continue
to do so until their 10-year period ends.
For firms set up before 24 July 1991, the last fiscal year in which they can take advantage of
the tax concessions is 2001.
1.2 Tax measures to promote investment1.2.1 Deduction for investment, Articles 68 to 77 cir92
(a) Form of the subsidy
Deduction for investment allows a ratio of the amount of investment made during the taxable
period to be deducted from the basic taxable amount.  Firms or natural persons who declare
gains or profits are eligible.
(b) Total amount in 1997
Deduction (NCG*) BF 10,469 million
(c) Policy objective
The objective is currently to facilitate investment in the research and development and
energy-saving sectors, as well as in SMEs.
(d) Duration
The deduction for investment has been "deactivated" for investment made after
27 March 1992.  This means that the ratio is now zero, except for the sectors mentioned under
"Policy objective".
(e) Rules and conditions
The deduction may apply to investment in tangible  or intangible fixed assets used in Belgium
to exercise a professional activity.
The redeemable amount determines the basis for calculation and the basic rate is linked to the
inflation rate.  The basic rate may not exceed 10 per cent nor be less than 3 per cent.  It is
however increased for investment in research  and development, investment in innovative
firms, and investment in energy saving.
1.3 Research and development aid
- Special law of 8 August 1980, amended on 16 July 1993;- Cooperation Agreement of 5 April 1995 between the Federal State and the regions on
the public financing of joint centres.
(a) Form of the subsidy
Non-repayable subsidiesG/SCM/N/38/EEC/Add.2
Page 8
(b) Total amount of the subsidies granted in 1997
1. Projects for which the Federal State is responsible:
Total commitments:  BF 99,875,000;
2. Projects for which the regions are responsible, jointly financed by the Federal
State and the regions:
Total commitments paid by the Federal State:  BF 163,206,000.
(c) Purpose of the subsidy
Precompetitive research for industrial purposes.
(d) Duration of the subsidy
Subsidies are usually for a period of two years (maximum).G/SCM/N/38/EEC/Add.2
Page 9
2. Brussels – Capital-Region
2.1 Aid to economic growth
2.1.1 Order of 1 July 1993 on the promotion of economic growth in the Brussels-Capital-Region(a) Form of the subsidy
Financial aid is granted in the form of a non-recoverable investment premium.
(b) Total amount of the subsidies granted in 1997
 Type of investment Number of
casesSubsidized
amount
(in BF)Amount of
premium
(in BF)Average rate of
aid
General investment 11 365,024,396 18,913,840 5.18%
Specific investment
- rational energy use 4 32,236,570 6,447,314 20%
- rational water use 3 3,866,514 773,303 20%
- rational use of raw
materials4 52,024,553 10,404,911 20%
- environmental
protection17 202,090,466 40,418,093 20%
- adaptation to European
standards14 305,421,679 45,694,750 14.96%
(*taking into account
combined cases)42
27*595,639,782 103,738,371 17.42%
Utilization of consultancy
services32 37,333,000 17,008,000 45.56%
Total in BF 70 997,997,178 139,660,211 13.99%
(c) Policy objective and/or purpose of the subsidy
The policy objective of the Order of 1 July 1993 is to promote economic growth by granting
financial aid to industrial enterprises in Brussels if they invest.
The amount of this aid depends on the enterprise's sector of activity, its size and the type of
investment:
- For all enterprises, "specific" investment for the purpose of:
- saving energy, water or raw materials;- protecting the environment;- adapting to European standards;
- for medium enterprises (maximum 250 empl oyees and turnover of ECU 20 million),
"general" investment;G/SCM/N/38/EEC/Add.2
Page 10
- for small and medium enterprises, "utilization of consultancy services".
(d) Duration of the subsidy and/or any other time-limit related to the subsidy
Depending on the amount of the premium and the duration of the investment programme, the
premium is paid in one, two or three annual tranches.
(e) Statistical data permitting an assessment of the trade effects of the subsidy
With regard to the role played by the fina ncial incentives provided in the legislation on
economic growth, it should be noted that the amount of BF 1,000 million of subsidized
investment under the Order of 1 July 1993 and the amount of BF 2,250 million of subsidizedinvestment under the Law of 4 August 1978 only represent 7 per cent of investment made by
enterprises situated in the Brussels-Capital region and working in the manufacturing, building
and trade sectors.*
Regarding jobs, the 70 cases approved concern around about 2,500 employees, i.e. an average
of 33 jobs per enterprise.
*Source:  VAT declarations of investment for 1996 = BF 44,500 million.
2.1.2. Economic Adjustment Law of 4 August 1978(a) Form of the subsidy
The financial aid is granted in the form of an interest subsidy or a capital premium depending
on the method of financing of the investment programme.
(b) Total amount of aid granted in 1997
Interest subsidy (in millions of BF)
Number of decisions
takenSubsidized amount of
investmentAmount decided Average rate of aid
565 1,730.6 218 12.6%
Capital premium (in millions of BF)
Number of decisions
takenSubsidized amount of
investmentAmount decided Average rate of aid
162 519.8 74.9 14.4%
(c) Policy objective and/or purpose of the subsidy
The aim of the Law of 4 August 1978 is to prom ote investment by small enterprises.  The
amount of the aid depends on the field of activity and how long the enterprise has existed.
Fields of activity are divided into two groups:- Group A: industrial and non-industrial enterprises or enterprises in the building
and finishing sector;G/SCM/N/38/EEC/Add.2
Page 11
- Group B: trade and services enterprises.
Two types of investment are envisaged:
- Type 1: investment by an enterprise that has existed for less than 24 months;
- Type 2: investment by a longer established enterprise.According to the Law of 4 August 1978, a small enterprise is one which comprises less than
50 people and whose turnover does not exceed BF 400 million.
Aid is given in the form of:
- An interest subsidy where the investment is financed by a fixed-term credit;- a capital premium where investment is self-financed.Two types of tax concession may also be granted:- The possibility of doubling straight line depreciation during three successive financial
years;
- exemption from tax on income from immovable assets.
(d) Duration of the interest subsidy and the capital premium
In accordance with the criteria set out in point 5, the interest subsidy may be given for a
period ranging from three to five years and the capital premium is paid in a lump sum.
The duration of the accelerated depreciation is fixed at three years.The duration of exemption from tax on income from immovable assets is exactly the same as
that for the interest subsidy.
(e) Statistical data permitting an assessment of the trade effects of the subsidy
See subheading (e) of the section on the Order of 1 July 1993 on the promotion of economic
growth in the Brussels-Capital region.
2.2. Research and development aid2.2.1. Subsidies for basic industrial research
(a) Form of the subsidy
Optional non-repayable subsidies
(b) Total amount of aid granted in 1997
Commitments:BF 116.9 million divided among 10 dossiers ranging from BF 6 to 18 million.G/SCM/N/38/EEC/Add.2
Page 12
(c) Policy objective and/or purpose of the subsidy
To strengthen precompetitive research by regional enterprises.
(d) Duration of the subsidy
Two years per subsidy
(e) Statistical data permitting an assessment of the trade effects of the subsidy
Precompetitive research so not quantifiable in the medium or short terms.
2.2.2. "Prototype advances"(a) Form of the subsidy
Interest-free loans repayable upon marketing.
(b) Total amount of aid granted in 1997
Commitments:BF 80.5 million divided among nine dossiers ranging from BF 2 to 19 million.The main sectors that received prototype advances were the following:
- Chemicals and pharmaceuticals;
- metal and mechanical manufacturing;  tools;- electronics and electronic data processing;- building.
(c) Policy objective and/or purpose of the subsidy
To promote regional development through the creation of new products, processes or
services.
(d) Duration of the subsidy
One to three years
(e) Statistical data permitting an assessment of the trade effects of the subsidy
Maintaining and developing competitive activities by regional enterprises, not quantifiable in
the short term.G/SCM/N/38/EEC/Add.2
Page 13
2.2.3. European programmes
(a) Form of the subsidy
Optional non-repayable subsidies
(b) Total amount of aid granted in 1997
Commitments:BF 450,000 for one dossier
(c) Policy objective and/or purpose of the subsidy
To compensate for the inadequacy of EC subsidies for European research programmes in
universities or research centres with no commercial activities.
(d) Duration of the subsidy
Two to three years per dossier
(e) Statistical data permitting an assessment of the trade effects of the subsidy
Precompetitive or socio economic research so not quantifiable in the medium or short terms.
2.3 Aid to promote foreign trade
2.3.1. Order of 13 January 1994 on the promotion of foreign trade
(a) Form of the subsidy
(A) Subsidies for :
- Participation in trade fairs abroad and in Belgium;- The elaboration of information documents to promote exports;- Participation in training programmes.
(B) Subsidies and interest-free loans for :
- Market surveys and market presence outside the European Union;- Participation in tenders for markets outside the European Union.G/SCM/N/38/EEC/Add.2
Page 14
(b) Total amount of aid granted in 1997 (in BF)
- Trade fair subsidies : BF 10,762,200
- Documentation subsidies : BF 7,633,525
- Training subsidies : BF 43,000- Market survey subsidies : BF 6,154,386
- Subsidies/loans for tenders : BF 1,023,147
___________
Total : BF 25,616,258
(c) Policy objective and/or purpose of the subsidy
Support for trade survey efforts by small and medium enterprises in the region.
(d) Duration of the subsidy
Ad hoc aid
(e) Statistical data permitting an assessment of the trade effects of the subsidy
Not availableG/SCM/N/38/EEC/Add.2
Page 15
3. Walloon Region
3.1 Aid to SMEs
3.1.1 Law of 4 August 1978 on economic adjustment, as amended by the Decree of 25 June 1992 -
application orders of 9 July 1992
(a) Form of the subsidy
Investment premium (non-repayable premium) irrespective of the investment financing
method.  Investments eligible to receive a premium are investments in tangible and intangible
fixed assets.
Exemption from tax on income from immovable assets (maximum five years) for investments
in immovable assets, including investment in real property and fixtures.
Accelerated depreciation over a maximum of three successive taxable periods for investment
in tangible fixed assets.  Exemption from the graduated registration duty on contributions to a
firm's assets.
(b) 1997 budget
The budget amounted to BF 1,516.9 million.
The premiums are awarded for a wide variety of projects and sectors of activity.
(c) Policy objective
The incentives created to assist the socio economic development of the Walloon region are
awarded under contracts between the Walloon region on the one hand and on the other any
natural or legal person who undertakes to carry out one or more operations aimed at achieving
sustainable development and promoting job creation.  The incentives are only awarded if they
make a decisive contribution to achieving these aims.  In practical terms, the premiums are
awarded in order to encourage investment by small and medium enterprises (SMEs).  A SMEis an enterprise whose payroll does not exceed 250 persons and whose turnover does not
exceed BF 845,834,000 (ECU 20 million at the rate of exchange on 1 July 1991).
The premiums are awarded to SMEs in the industrial, non-industrial, tourism, trade and
services sectors.
The scheme applies in the whole of the Walloon region for all enterprises meeting the SME
criteria.
The scheme is therefore not specific, but only applies to SMEs.
(d) Duration
No time-limit has been fixed for the scheme's application and the budget is adopted annually.G/SCM/N/38/EEC/Add.2
Page 16
3.2. Aid to disadvantaged regions
3.2.1. Law of 30 December 1970 on economic growth, as amended by the Decree of 25 June 1992 
application orders of 9 July 1992
(a) Form of the subsidy
Investment premium (non-repayable premium) irrespective of the investment financing
method.  Investments eligible to receive a premium are investments in tangible and intangible
fixed assets.
Exemption from tax on income from immovable assets (maximum five years) for investment
in immovable assets, including investment in real property and fixtures.
Accelerated depreciation over a maximum of three successive taxable periods for investment
in tangible fixed assets.
Exemption from the graduated registration duty on contributions to a firm's assets.
(b) 1997 budget
The budget amounted to BF 3,791.6 million.The premiums are awarded for a wide variety of projects and sectors of activity.
(c) Policy objective
The incentives created to assist the socio economic development of the Walloon region are
awarded under contracts between the Walloon region on the one hand and on the other any
natural or legal person who undertakes to carry out one or more operations aimed at achieving
sustainable development and promoting job creation.  The incentives are only awarded if they
make a decisive contribution to achieving these aims.
In practical terms, the premiums are awarded in order to encourage investment by large
enterprises situated in disadvantaged zones, called development zones.
Development zones are determined by the Commission of the European Union upon a
proposal by a member State.  In defining th e scope of such zones, the Commission of the
European Union uses a method defined in 1988 in the "Coordination principles for regionalaid".  This method is essentially based on an analysis of objective criteria, including the per
capita GDP and the unemployment rate.
This scheme is therefore not specific, but only applies to enterprises situated in disadvantaged
zones and, as mentioned above, these are defined on the basis of easily identifiable andquantifiable objective criteria.
(d) Duration
No time-limit has been fixed for the scheme's application and the budget is adopted annually.G/SCM/N/38/EEC/Add.2
Page 17
3.3 Research and technology aid
3.3.1. Decree of 5 July 1990 on aid and action by the Walloon region to promote research and
technology, and its execution orders:
- On 29 December 1994 the Walloon Government Decree defined "small or medium
enterprise" with a view to granting aid and taking action to promote research and
technology;
- the Walloon Government Decree of 29 Se ptember 1994 on aid and action to promote
research and technology.
(a) Form of the aid
A. Subsidies granted to enterprises for basic industrial research work.B. Repayable advances to enterprises for work related to applied research and
development.
C. Subsidies granted to small and medium enterprises for preparatory or associated
studies for research or development projects.
(b) 1997 budget
The amount of aid per unit consists of a percentage of the admissible expenditure for the
project accepted.
The annual global budgets for the types of aid set out in point (a) are BF 103 million,
BF 1,124.4 million and BF 91.9 million, respectively.
(c) Policy objective
These are horizontal types of aid to promote research and development activities and
encourage technological innovation.  They are available to all sectors of economic activity.
The types of aid defined under A and B of point 3 are available to enterprises of any size.
The aid mentioned under C is restricted to small and medium enterprises.
The aid is not awarded automatically, it depends on an assessment of the quality of the project
by the administrative services.
Where aid consists of a repayable advance, the beneficiary enterprise pays it back in the form
of regular payments if it has decided to exploit the results of the research industrially or
commercially.
(d) Duration
The aid scheme may be applied indefinitely.  The budget is adopted annually by the Walloon
Parliament.
The duration of aid granted corresponds to the duration of the research work or the study
financed.G/SCM/N/38/EEC/Add.2
Page 18
(e) Statistical data
The aid has an impact on trade because it may lead to the marketing of innovative products,
processes or services.  The criteria for estimating this impact are so numerous and complex
that it is extremely difficult to apply statistical tools to them.G/SCM/N/38/EEC/Add.2
Page 19
4. Flemish Region
4.1. Aid to economic growth
4.1.1. Law of 30 December 1970 on economic growth(a) Form of the aid
- Interest subsidy (for investment financed through credit or leasing);- capital premium (for investment financed by the enterprise's own funds);
- tax concessions;
- loan guarantee by the Flemish region;- interest-free repayable credit.
(b) Total amount of aid in 1997
- Interest subsidy and capital premium:  BF 2,987,723,050 of commitments;
- tax concessions:  see the figures from the Ministry of Finance;
- loan guarantee:  BF 453,750,000 of guarantees (amount of investment);- interest-free repayable credit:  BF 3,200,000 (total figure for the Law of
30 December 1970 and the Decree of 15 December 1993).
(c) Purpose of the aid
The aid is granted to promote the economic growth of medium and large enterprises in
development zones in the Flemish region and applies to investment that leads to the creation
of additional jobs.
The programme provides a definition of the se ctors, investment and financing admissible.
(d) Duration of the programme
Indefinite
(e) Statistical data
No statistical data permitting an assessment of the aid's effects on WTO trade are available.
(f) Rules and conditions
The programme applies to large and medium industrial, commercial and non-industrial
enterprises, as well as to large and medium enterprises in the tourism or services sectors.
It concerns investment in development zones or buffer zones in the Flemish region that leads
to the creation of additional jobs.G/SCM/N/38/EEC/Add.2
Page 20
A medium or large enterprise is defined in accordance with the Community framework for
aid to SMEs, adopted by the European Commission on 20 May 1992.
An enterprise may obtain the following aid:
Interest subsidies and capital premiums are granted for investment projects that create
additional jobs, are of strategic interest to the region or have a favourable impact on the
environment;
Tax concessions:- Exemption from tax on income from immovable assets for a maximum of five years
for investments in real property or fixtures that are included in the  "allivrement
cadastral"  (assessment of rateable value).
- Accelerated depreciation is admissible for enterprises situated in the Limbourg
development zones.
All investment eligible for subsidies that is depreciated in a straight line is admissible.
The concession gives the possibility of applying annual depreciation equal to or
double the normal annual straight line depreciation payment over a period of three
consecutive years.
- Exemption from graduated levies on capital inflow is granted for capital invested in
medium or large enterprises with legal status in respect of investment in development
zones or buffer zones.
The purpose of the loan guarantee by the Flemish region is to facilitate the granting of
professional credits to enterprises that invest in economic growth.  The guarantee is
additional to the security provided by the en terprise but may not be used to cover the
total risk.  Part of the risk must be borne by the credit organization and by the security
given by the enterprise.  The credit organization and the enterprise each pay a
contribution that depends on the amount and term of the guarantee.
"Soft" aid consists of an interest-free repayable credit for training projects, advising
enterprises, and investment studies.
4.1.2. Economic Adjustment Law of 4 August 1978
(a) Form of the aid
- Interest subsidy (for investment financed through credit or leasing);
- capital premium (for investment financed by the enterprise's own funds);
- exemption from tax on income from immovable assets;- loan guarantee by the Flemish region.
(b) Total amount of aid in 1997
- Interest subsidy and capital premium:  BF 4,897,346,069 of commitments;
- exemption from tax on income from immovable assets:  see the figures from the
Ministry of Finance;
- loan guarantee:  BF 1,721,963,000 of guarantees.G/SCM/N/38/EEC/Add.2
Page 21
(c) Purpose of aid
The aid is granted to promote the economic growth of small and independent enterprises in
the Flemish region.
The programme provides a definition of the se ctors, investment and financing admissible.
(d) Duration of the programme
Indefinite
(e) Statistical data
No statistical data permitting an assessment of the aid's effects on WTO trade are available.
(f) Rules and conditions
The programme applies to small industrial, commercial and non-industrial enterprises, small
enterprises in the tourism or services sectors and independent or professional occupations
closely linked to the economic activities of small enterprises.
A small enterprise is defined in accordance with the Community framework for aid to SMEs,
adopted by the European Commission on 20 May 1992.
The amount of the interest subsidy and the capit al premium are calculated according to the
enterprise's activity, whether it is the enterprise's first establishment in the Flemish region, the
creation of additional jobs, the strategic interest of the investment for the region or thefavourable impact on the environment.
Enterprises granted an interest subsidy or capital premium may be exempted from tax on
income from immovable assets for investment in real property included in the "allivrement
cadastral"  (assessment of rateable value) for a maximum period of five years.  The exemption
applies to real property and fixtures.
A loan guarantee may be granted by the Flemish Guarantee Fund (Vlaamswaarborgfonds)
(Regulation of 22 July 1993 on the Flemish Guarantee Fund).  The percentage of cover
depends on the duration of the loan.  The credit organization and the beneficiary of the loan
each pay a contribution that depends on the amount and the duration of the guarantee.
4.1.3. Decree of 15 December 1993 to promote economic growth in the Flemish region
(a) Form of the aid
- Investment premium;
- exemption from tax on income from immovable assets;
- loan guarantee by the Flemish region;
- interest-free repayable credit.
(b) Total amount of aid in 1997
- Investment premium:  BF 1,563,579,000 of commitments;
- exemption from tax on income from immovable assets:  see the figures from the
Ministry of Finance;G/SCM/N/38/EEC/Add.2
Page 22
- loan guarantee:  BF 156,000,000 of guarantees (amount of investment);
- interest-free repayable credit:  BF 3,200,000 (total figure for the Law of
30 December 1970 and the Decree of 15 December 1993).
(c) Purpose of the aid
The aid is granted to promote the economic growth of medium and large enterprises in the
Flemish region.
The programme provides a definition of the se ctors, investment and financing admissible.
(d) Duration of the programme
Indefinite
(e) Statistical data
No statistical data permitting an assessment of the aid's effects on WTO trade are available.
(f) Rules and conditions
The programme applies to medium and large industrial, commercial, and non-industrial
enterprises, as well as to medium and large enterprises in the tourism or services sectors.
It concerns investment in zones outside development zones and buffer zones in the Flemish
region or in development zones or buffer zones where it does not lead to the creation of
additional jobs.
A medium or large enterprise is defined in accordance with the Community framework for
aid to SMEs, adopted by the European Commission on 20 May 1992.
The investment premium for medium enterprises is granted for investment projects that create
additional jobs or are of economic interest for the region or have a favourable impact on the
environment.
Exemption from tax on income from immovable assets for a maximum of five years applies
to real property or fixtures that are included in the "allivrement cadastral"  (assessment of
rateable value).
The purpose of the loan guarantee by the Flemish region is to facilitate the granting of
professional credits to enterprises that invest in economic growth.  The guarantee is additional
to the security provided by the enterprise but ma y not be used to cover the total risk.  Part of
the risk must be borne by the credit organization and by the security given by the enterprise.
The credit organization and the enterprise each pay a contribution that depends on the amount
and term of the guarantee.
"Soft" aid consists of an interest-free repayable credit for training projects, advising
enterprises, and investment studies.
Aid to large enterprises is limited to ecological in vestment and is in the form of an investment
premium, "soft" aid, exemption from tax on income from immovable assets, or the Flemish
region's guarantee.G/SCM/N/38/EEC/Add.2
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4.2 Aid to integration of enterprises (= social economy)
Decision by the Flemish Government of 16 November 1994 on integration of enterprises
"doorvoering van experimenten in verband met invoegbedrijven en leereilandprojecten" .
(a) Form of the aid
- A degressive lump-sum wages premium for each full-time job;
- degressive over a period of three years.
(b) Total amount of aid in 1997
- Total premiums granted in 1997:  BF 39,800,000.
(c) Purpose of the aid
Integration enterprises are newly-created enterprises recognized by the Minister whose
integration requires medium-term aid before they can take their place in the normal economy.
The aim is to be able to recruit workers with lower qualifications whose reduced productivity
is offset by a premium given to the employer.
(d) Duration of the programme
Indefinite
(e) Statistical data
No statistical data permitting an assessment of the aid's effects on WTO trade are available.
4.3. Aid to enterprises for consultancy(a) Form of the aid
Consultancy bonus for independent firms and new SMEs.
(b) Total amount of aid in 1997
Amount:  BF 296,346,000
(c) Purpose of the aid
The largest number of bankruptcies occur during the first five years of an enterprise.  Based
on this, it appeared useful to allow these enterprises to call on management consultants duringtheir start-up period.
(d) Duration of the programme
Until 31 December 1997
4.4 Research and development aid
Decision of the Flemish Research and Technological Development Fund of 23 October 1991.G/SCM/N/38/EEC/Add.2
Page 24
(a) Form of the aid
- Grants for basic research;
- loans with conditional repayment for prototyping and development.
(b) Total amount of aid in 1997
BF 2,228 million for 244 projects
(c) Purpose of the aid
The primary objective is aid for R & D.
(d) Duration of programme
The data are related to continuous programmes and specific action programmes.
(e) Statistical data
Division by type of research:
- Strategic basic research :  25 per cent
- industrial basic research :  59 per cent
- prototyping and development :  16 per cent
Division by applicant:- Large companies :  55 per cent
- SMEs :  14 per cent
- universities, research institutes :  13 per cent
(f) Rules and conditions
Any industrial enterprise can apply for financial aid for R & D projects.  At any time, the
firms can submit a file to the IWT (Flemish Institute for the Promotion of
Scientific-Technological Research in the Industry) which processes the files.
Universities and research institutes can also participate in the industrial projects and can get
financial aid.
Basic research can obtain support for 50 per cent of the project costs.  The development of
prototypes, new products or new manufacturing processes can get a loan of 50 per cent of the
project cost, with a gross grant equivalent of 15 per cent or 25 per cent.
Repayment, including market interest rate, is required in cases where the project meets with
technical success.  For SMEs, these percentages can be raised by 10 per cent.
Projects for strategic basic research with industrial relevance can obtain a subsidy of 100 per
cent.
Costs for personnel, material and supplies related to R & D, instruments and equipment are
eligible for aid.G/SCM/N/38/EEC/Add.2
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4.5 Aid to shipbuilding
Decision of the Flemish Government of 29 December 1992
(a) Form of the subsidy
Direct subsidy, interest subsidy, guarantees
(b) Total amount of the subsidy
- Fishing boats - investments BF 22,476,435
- Other shipbuilding projects BF 0- Income supplement former shipbuilders BF 17,340,000
- Severance payments and decommissioning subsidy BF 18,210,164
- Consultancy and study cost BF 0
(c) Policy objective
Continuity of shipbuilding through subsidy grants compatible with and limited by EU rules
(7th Directive).
(d) Duration of the programme
Originated 1 January 1993 - terminated 31 December 1995.  The amounts paid in 1997 are the
amounts remaining for files introduced before this final date.
(e) Rules and conditions
Shipyards in the Flemish region can apply and are in principle eligible for a subsidy equal to
that allowed by EU rules.  The form (direct s ubsidy, interest subsidy, guarantees) varied from
case to case.
4.6 Aid to investment and setting up in agricu lture, Flemish agricultural investment fund
For the purpose of continuing aid to investment and setting up in agriculture following the
regionalization of the Agricultural Investment Fund on 1 January 1993, a Flemish
Agricultural Investment Fund was created (Vlaams Landbouwinvesteringsfonds).
- Council Regulation (EEC) No. 950/97 of 20 May 1997 on improving the efficiency
of agricultural structures.  (Combined te xt of Council Regulation (EEC) No. 2328/91
and amendments thereto.)
- Article 12 of the Decree of 22 December 1993 containing various supportive
measures in the 1994 budget (creation of a Flemish Agricultural Investment Fund).
- Flemish Government Decree and Ministerial Decree of 4 July 1997 on aid to
investment and setting up in agriculture.
- Flemish Government Decree of 16 July 1997 regulating the operation and
management of the "Vlaams Landbouwinvesteringsfonds" (Flemish Agricultural
Investment Fund).G/SCM/N/38/EEC/Add.2
Page 26
(a) Form of the aid
- Interest subsidies:  interest subsidy on loans granted in the agricultural and
horticultural sectors;
- investment premiums for young farmers/horticulturists;
- loan guarantees in the agricultural and horticultural sectors.
(b) Total amount of the aid in 1997 (granted:  in terms of commitments)
- Interest subsidies:  BF 2,077,494,002
*New dossiers: Improvement:  BF 1,131,644,209 with 25 per cent
co-financing by the EAGGF (EEC
Regulation No. 950/97)
Setting up: BF 466,052,133 with 50 per cent
co-financing by the EAGGF (EEC
Regulation No. 950/97)
Regional aid without EAGGF co-financing: BF 479,797,660
*Revision + facilities for existing dossiers:  BF 20,880,623
- Investment premiums:  BF 82,799,780
*When first setting up: BF 82,428,484 with 50 per cent co-financing
by the EAGGF (EEC Regulation
No. 950/97)
*In the swine sector: BF 371,293 with 25 per cent co-financing by
the EAGGF (EEC Regulation No. 950/97)
- Loan guarantees:  BF 2,415,510,214, of guarantees
(c) Purpose of the aid
The aid is given to farmers and horticulturists, and to their organizations and cooperatives, to
promote operations that enhance the productivity of agricultural and horticultural enterprises,maintain and improve their profitability and decrease production costs, for example:
(a) Investment operations, namely operations under which durable goods such as land,
buildings and structures are purchased, enlarged or improved for the aforementioned
natural or legal persons, including housing for the farmer or horticulturist and hisfamily, industrial equipment, plant, machinery, tools and materials.  This Decree may
only apply to the purchase of land and buildings where this is economically necessary
in order to safeguard the profitability of the existing enterprise;
(b) conversion of enterprises following changes in the economic situation;(c) setting up facilities for farmers and horticulturists;G/SCM/N/38/EEC/Add.2
Page 27
(d) processing and marketing of agricultural and horticultural products, mainly through
cooperatives.
(d) Duration of the programme
Indefinite
(e) Statistical data
The structural objective of the subsidies is to improve the situation in agriculture by
enhancing the efficacy of its structures so no st atistical data permitting an assessment of the
aid's effects on world trade are available.
(f) Rules and conditions
Natural or legal persons whose principal activity is agriculture or horticulture, as well as their
organizations and cooperatives, are eligible for this aid.  They must have sufficientprofessional capacity and their holding must represent a minimum of one man-work unit and
a maximum of 12 man-work units per family unit.
The aid is granted for three main categories of operation:
- Improvement of an existing holding:  investment in permanent improvement of the
structure of the holding.  There are a number of sectoral restrictions EAGGF
co-financing is available up to a ceiling beyond which the Flemish region is fully
responsible for the aid, with a maximum ceiling;
- setting up young farmers who take over moveable property (machinery and
equipment, livestock ...).  EAGGF co-financing is available up to a ceiling beyond
which the Flemish region  is fully responsible for the aid, with a maximum ceiling:
- various operations without EAGGF co-financing, for example, purchase of occupied
farm buildings, investment for the environment and welfare of animals, ... (in
accordance with the provisions of Council Regulation (EEC) 950/97).
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