WORLD TRADE
ORGANIZATIONG/SCM/N/95/GTM
G/SCM/N/99/GTM
22 July 2003
(03-3937)
Committee on Subsidies and
Countervailing MeasuresOriginal:  Spanish
SUBSIDIES
New and Full Notification Pursuant to Article XVI.1 of the GATT 1994
and Article 25 of the Agreement on Subsidies
and Countervailing Measures
Extension Under SCM Article 27.4 of the Transition Period for the
Elimination of Export Subsidies Pursuant to the Procedures
in Document G/SCM/39
GUATEMALA
The following communication, dated 23 June 2003, has been received from the Permanent
Mission of Guatemala.
_______________
Pursuant to Article XVI.1 of the General Agreement on Tariffs and Trade (GATT) 1994 and
Article 25.2 of the Agreement on Subsidies and C ountervailing Measures (SCM Agreement) and as
provided in paragraphs 1(d) and (e) of the Procedures for Extensions under Article 27.4 for Certain
Developing Country Members  (document G/SCM/39 of 20 November 2001), I hereby submit
Guatemala's annual notification seeking a continuation of the extension granted by the Decisions of
22 November 2002, circulated in documents G/SCM/72, G/SCM/73 and G/SCM/74.
The aim of this notification is to fulfil the transparency and standstill requirements in
paragraphs 3 and 4 of document G/SCM/39.  As required by this document, the programmes notified
in document G/SCM/N/71/GTM have not been modified in any way to make them more favourable.
This notification is without prejudice to Guatemala's rights under the WTO Agreements.G/SCM/N/95/GTM
G/SCM/N/99/GTM
Page 2
CONTENTS
Page
ProgrammeI. Exemption from Company Tax;  exemption from customs duties and other
import taxes, including Value-Added Tax (VAT), on machinery,
equipment, parts, components and accessories required forthe production process of companies under special cust oms regimes ..................................... 3
II. Exemption from Company Tax;  exemption from customs duties and other
import taxes, including Value-Added Tax (VAT), on machinery,
equipment, parts, components and accessories required for theproduction process relating to activities of managers and users of Free Zones....................... 4
III. Exemption from Company Tax;  exemption from customs duties and other
import taxes, including Value-Added Tax (VAT), on machinery,
equipment, parts, components and accessories required for theproduction process of commercial and industrial enterprises operating
in the Industrial and Trad e Free Zone (ZOLIC) ...................................................................... 5G/SCM/N/95/GTM
G/SCM/N/99/GTM
Page 3
PROGRAMME I
1. Description
(a) Exemption from Company Tax on income from the export of goods produced or
assembled in Guatemala and exported under special customs regimes to non-Central
American countries.
(b) Exemption from customs duties and other import taxes, including Value-Added Tax
(VAT), on machinery, equipment, parts, components and accessories required for the
production process.
2. Period of notification
June 2002
3. Objective
To promote, encourage and develop the production in national customs territory of goods for
export to non-Central American countries.
4. Background and authority
Background
The Government of Guatemala considers that appropriate conditions for encouraging
investment of national and foreign capital needs to be promoted in order to reduce the existing high
poverty levels stemming, inter alia , from the internal armed conflict as well as to raise employment
levels and improve the distribution of income.
Authority
Legislative Decree No. 29-89 of 23 May 1989.
5. Form of the subsidy
The subsidy takes the form of a tax exemption, but its effect is greatly reduced given the other
national taxes payable.
6. To whom and how the subsidy is provided (whe ther to producers, exporters or others, through
what mechanisms, whether it is a fixed sum or fluctuating amount per unit and, if the latter,
how the amount is determined)
The subsidy is granted to companies by way of an exemption from Company Tax on income
from the export of goods produced or assembled in Guatemala and exported under special customs
regimes to non-Central American countries.
To be eligible for the programme, companies must be recognized by the Ministry of the
Economy.G/SCM/N/95/GTM
G/SCM/N/99/GTM
Page 4
7. Subsidy per unit or, in cases where this is not possible, the total or annual amount budgeted
for this subsidy (indicating, if possible, the average subsidy per unit for the year covered by
the notification, the previous year or both). A full explanation will be provided.
Subsidies are granted in accordance with th e exporters’ income; they cannot therefore be
quantified given that they vary each fiscal year.
8. Duration of the subsidy and/or any other time-limit which could affect it, including the date of
inception/commencement.
This subsidy programme is applicable for up to ten years.
9. Statistical data permitting an assessment of the effects of the subsidy on trade. The specific
nature and scope of such statistics is left to the judgement of the notifying Member. It is,
however, desirable - to the extent possible, relevant and/or determinable - that such
information include statistics relating to the production, consumption, imports and exports of
the subsidized product(s).
No such statistical information is available.
PROGRAMME II
1. Description
(a) Exemption from Company Tax on income exclusively from the activities of managers
and users of the Free Zone.
(b) Exemption from customs duties and other import taxes, including Value-Added Tax
(VAT), on machinery, equipment, parts, components and accessories required for the
production process.
2. Period of notification
June 2002
3. Objective
To promote and regulate the establishment in Guatemala of Free Zones, the activities of
which, in particular measures to boost foreign trade, create employment and stimulate technology
transfer, serve to encourage national development.
4. Background and authority
Background
In an endeavour to encourage the development of regions which have been marginalized as a
result of the internal armed conflict and to reduce poverty levels, a Free Zone system has been
established as an instrument to create employ ment, attract investment and encourage technology
transfer.G/SCM/N/95/GTM
G/SCM/N/99/GTM
Page 5
Authority
Legislative Decree No. 65-89 of 14 November 1989.
5. Form of the subsidy
The subsidy takes the form of a tax exemption.
6. To whom and how the subsidy is provided (whe ther to producers, exporters or others, through
what mechanisms, whether it is a fixed sum or fluctuating amount per unit and, if the latter,
how the amount is determined).
The beneficiaries of this incentive are the managers and users of Free Zones.
To enjoy these fiscal benefits, companies must be fully authorized by the Ministry of the
Economy.
7. Subsidy per unit or, in cases where this is not possible, the total or annual amount budgeted
for this subsidy (indicating, if possible, the average subsidy per unit for the year covered by
the notification, the previous year or both). A full explanation will be provided.
Subsidies are granted in accordance with the exporters’ income;  they cannot therefore be
quantified given that they vary each fiscal year.
8. Duration of the subsidy and/or any other time-limit which could affect it, including the date of
inception/commencement.
This subsidy programme is applicable for up to ten years.
9. Statistical data permitting an assessment of the effects of the subsidy on trade.  The specific
nature and scope of such statistics is left to the judgement of the notifying Member.  It is,
however, desirable - to the extent possible, relevant and/or determinable - that such
information include statistics relating to the production, consumption, imports and exports of
the subsidized product(s).
No such statistical information is available.
PROGRAMME III
1. Description
(a) Exemption from Company Tax on income from the activities of managers and users
of the Industrial and Trade Free Zone (ZOLIC).
(b) Exemption from customs duties and other import taxes, including Value-Added Tax
(VAT), on machinery, equipment, parts, components and accessories required for the
production process.
2. Period of notification
June 2002G/SCM/N/95/GTM
G/SCM/N/99/GTM
Page 6
3. Objective
To promote the economic development of the province of Izabal, where the population -
mostly Garifuna - is the most backward in the country in terms of social and economic development,and capitalize on its geographical location as the sole access point to Guatemala from the Atlantic
Ocean.
4. Background and authority
Background
Measure to encourage investment as a m echanism for promoting the development of
Guatemala's Garifuna population.
Authority
Decree No. 22-73 of 21 March 1973.
5. Form of the subsidy
The subsidy takes the form of a tax exemption.
6. To whom and how the subsidy is provided (whe ther to producers, exporters or others, through
what mechanisms, whether it is a fixed sum or fluctuating amount per unit and, if the latter,
how the amount is determined).
The beneficiaries of these incentives are commercial and/or industrial enterprises operating
under this special regime.
7. Subsidy per unit or, in cases where this is not possible, the total or annual amount budgeted
for this subsidy (indicating, if possible, the average subsidy per unit for the year covered by
the notification, the previous year or both).  A full explanation will be provided.
Subsidies are granted in accordance with the be neficiaries' income;  they cannot therefore be
quantified given that they vary each fiscal year.
8. Duration of the subsidy and/or any other time-limit which could affect it, including the date of
inception/commencement.
This subsidy programme is applicable for up to ten years.
9. Statistical data permitting an assessment of the effects of the subsidy on trade.  The specific
nature and scope of such statistics is left to the judgement of the notifying Member.  It is,
however, desirable - to the extent possible, relevant and/or determinable - that such
information include statistics relating to the production, consumption, imports and exports of
the subsidized product(s).
No such statistical information is available.
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