WORLD TRADE
ORGANIZATIONG/SCM/N/48/EEC/Add.2
14 March 2000
(00-1021)
Committee on Subsidies
and Countervailing MeasuresOriginal:  French
SUBSIDIES
Updating 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/48/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.G/SCM/N/48/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 ................................ 5
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) ........................................................... 6
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 development aid .................................................................................. 8
2. BRUSSELS – CAPITAL REGION………………………………………………….9
1. BRUSSELS – CAP ITAL REGION.......................................................................... 10
2. Order of 1 July 1993 on the promotion of economic growth in the
Brussels-Capita l region .................................................................................. 10
1. BRUSSELS – CAP ITAL REGION.......................................................................... 11
2. Economic Adjustment Law of 4 August 1978 ............................................... 11
1. BRUSSELS – CAP ITAL REGION.......................................................................... 12
2. Subsidies for basic in dustrial research ........................................................... 12
1. BRUSSELS – CAP ITAL REGION.......................................................................... 13
2. Prototype advances ........................................................................................ 13
1. BRUSSELS – CAP ITAL REGION.......................................................................... 14
2. European programmes ................................................................................... 14
1. BRUSSELS – CAP ITAL REGION.......................................................................... 14
2. Order of 13 January 1994 on the promotion of fo reign trade ........................ 14G/SCM/N/48/EEC/Add.2
Page 4
                                                                                                                            Pag e
3. WALLOON REGION............................................................................................... 16
3.1 Aid to SMEs ............................................................................................................... 1 6
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 .......................... 16
3.2 Aid to disadvantaged regions ................................................................................... 17
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 ....................................... 17
3.3 Research and technology aid .................................................................................... 18
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 ...................... 18
4. FLEMISH REGION.................................................................................................. 20
4.1 Aid to economic growth ............................................................................................ 20
4.1.1 Law of 30 December 1970 on economic growth ........................................... 20
4.1.2 Economic Adjustment Law of 4 August 1978 ............................................... 21
4.1.3 Decree of 15 December 1993 to promote economic growth
in the Flemis h region ..................................................................................... 22
4.2 Aid to integration of enterp rises (= social economy) ............................................. 24
4.3 Aid to enterprises for consultancy ........................................................................... 24
4.4 Research and development aid ................................................................................ 25
4.5 Aid to the fisheries an d aquaculture sector ............................................................. 26G/SCM/N/48/EEC/Add.2
Page 5
1. 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 1998
Exemption from corporate tax:  (NCG*) BF 378 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 of the subsidy
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.
(e) Trade effects of the subsidy
n.a.
                                                     
* NCG = Net cost for government in BF.G/SCM/N/48/EEC/Add.2
Page 6
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 :
- Exemption from duty on capital inflow;- exemption from corporate tax for ten 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 1998
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 of the subsidy
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.
(e) Trade effects of the subsidy
n.a.
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.G/SCM/N/48/EEC/Add.2
Page 7
(b) Total amount in 1998
Immunity from corporate tax:  (NCG*) BF 261 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.
(d) Duration of the subsidy
This scheme is no longer available, although enterprises currently benefiting from it continue
to do so until their ten-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.
(e) Trade effects of the subsidy
n.a.
1.2 Tax measures to promote investment
1.2.1 Deduction for investment, Articles 68 to 77 cir92
(a) Form of the subsidy
Deduction for investment allows a share 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 1998
Deduction (NCG*) BF 6,853 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 of the subsidy
The deduction for investment has been "deactivated" for investment made after
27 March 1992.  This means that the rate 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.
                                                     
* NCG = Net cost for government in BF.G/SCM/N/48/EEC/Add.2
Page 8
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.
(f) Trade effects of the subsidy
n.a.
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 subsidy.
(b) Total amount of the subsidies granted in 1998
1. Projects for which the Federal State is responsible:
Total commitments:  BF 95,900,000.
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 165,675,000.
(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).
(e) Trade effects of the subsidy
n.a.G/SCM/N/48/EEC/Add.2
Page 9
2. BRUSSELS – CAPITAL REGION
PART B
- Aid to economic growth
• Order of 1 July 1993:  aid to investment and utilization of consultancy services
• Law of 4 August 1978:  aid to investment by small enterprises
- Research and development aid
• Subsidies for basic industrial research
• Prototype advances
• European programmes
- Aid to trade surveys
• Order of 13 January 1994 on the promotion of foreign tradeG/SCM/N/48/EEC/Add.2
Page 10
1. BRUSSELS – CAPITAL REGION
2. Order of 1 July 1993 on the promotion of economic growth in the Brussels-Capital Region
3. Form of the subsidy
Financial aid is granted in the form of a non-recoverable investment premium.
4. Total amount of the subsidies granted in 1998
Type of investment Number of
casesSubsidized
amount
(in BF)Amount of
premium
(in BF)Average rate of
aid
General investment 10 159,654,969 9,069,883 5.68%
Specific investment
- rational energy use 3 9,953,685 1,990,737 20.00%
- rational water use 1 2,096,385 419,277 20.00%
- rational use of raw
materials1 5,150,000 1,030,000 20.00%
- environmental
protection13 612,014,558 101,510,527 16.59%
- adaptation to European
standards5 27,457,721 4,187,331 15.25%
- change to the Euro 12 40,257,049 8,051,409 20.00%
Total 35 696,929,398 117,189,281 16.82%
Utilization of consultancy
services45 25,103,346 12,551,673 50.00%
Overall total in BF 90 881,687,713 138,810,837 15.74%
5. 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 employees and turnover of € 20 million),
"general" investment;
- for small and medium enterprises, "utilization of consultancy services".G/SCM/N/48/EEC/Add.2
Page 11
6. Duration of the subsidy and/or any other time-limits attached to it
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.
7. Statistical data permitting an assessment of the trade effects of the subsidy
With regard to the role played by the financial incentives provided in the legislation on
economic growth, it should be noted that the am ount of BF 880 million of subsidized investment
under the Order of 1 July 1993 and the amount of BF 4,300 million of subsidized investment under
the Law of 4 August 1978 only represent 10 per cent of investment made by enterprises situated in the
Brussels-Capital region and working in the manufacturing, building and trade sectors.*
*Source:  VAT declarations of investment for 1997 = BF 51,000 million.
1. BRUSSELS – CAPITAL REGION
2. Economic Adjustment Law of 4 August 1978
3. 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.
4. Total amount of aid granted in 1998
Interest subsidy (in millions of BF).
Number of decisions
takenSubsidized amount of
investmentAmount decided Average rate of aid
691 2,924 319.4 10.9%
Capital premium (in millions of BF)
Number of decisions
takenSubsidized amount of
investmentAmount decided Average rate of aid
293 1,378 179.8 13%
5. 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;
- Group B: trade and services enterprises.Two types of investment are envisaged:G/SCM/N/48/EEC/Add.2
Page 12
- 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.
6. 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.
7. Statistical data permitting an assessment of the trade effects of the subsidy
See subheading (7) of the section on the Order of 1 July 1993 on the promotion of economic
growth in the Brussels-Capital region.
1. BRUSSELS – CAPITAL REGION
2. Subsidies for basic industrial research
3. Form of the subsidy
Optional non-repayable subsidy.
4. Total amount of aid granted in 1998
Commitments:BF 116.2 million divided among nine dossiers ranging from BF 6.9 to 19.8 million.
Disbursements:
BF 83.5 million.G/SCM/N/48/EEC/Add.2
Page 13
5. Policy objective and/or purpose of the subsidy
To strengthen precompetitive research by regional enterprises.
6. Duration of the subsidy
Two years per subsidy.
7. Statistical data permitting an assessment of the trade effects of the subsidy
Precompetitive research so not quantifiable in the medium or short terms.
1. BRUSSELS – CAPITAL REGION
2. Prototype advances
3. Form of the subsidy
Interest-free loans repayable upon marketing.
4. Total amount of aid granted in 1998
Commitments:BF 205.1 million divided among seven dossiers ranging from BF 1.2 to 170 million.Disbursements:BF 68.5 million.- Chemicals and pharmaceuticals;- metal and mechanical manufacturing;
- electronics and electronic data processing;
- building.
5. Policy objective and/or purpose of the subsidy
To promote regional development through the creation of new products, processes or
services.
6. Duration of the subsidy
One to five years.
7. 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/48/EEC/Add.2
Page 14
1. BRUSSELS – CAPITAL REGION
2. European programmes
3. Form of the subsidy
Optional non-repayable subsidy.
4. Total amount of aid granted in 1998
Commitments:
BF 6.51 million for two dossiers.
Disbursements:BF 3.64 million
5. 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.
6. Duration of the subsidy
Two to three years per dossier.
7. 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.
1. BRUSSELS – CAPITAL REGION
2. Order of 13 January 1994 on the promotion of foreign trade
3. 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/48/EEC/Add.2
Page 15
4. Total amount of commitments in 1998 (in BF)
Trade fair subsidies 16,916,525
Documentation subsidies  6,019,052
Training subsidies 45,000
Market survey subsidies/loans 6,619,866
Subsidies/loans for tenders 0
Subsidies/foreign trade experts 487,500
TOTAL 30,087,943
5. Policy objective and/or purpose of the subsidy
Support for trade survey efforts by small and medium enterprises in the region.
6. Duration of the subsidy
Ad hoc aid.
7. Statistical data permitting an assessment of the trade effects of the subsidy
Not available.G/SCM/N/48/EEC/Add.2
Page 16
3. WALLOON REGION
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.
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 capital inflow.
(b) 1998 budget
The budget amounted to BF 1,539.12 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 decisivecontribution to achieving these aims.
In practical terms, the premiums are awarded in  order to encourage investment by small and
medium enterprises (SMEs).  A SME is an enterprise whose payroll does not exceed 250 persons and
whose turnover does not exceed BF 845,834,000 (€ 20 million at the rate of exchange on1 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.G/SCM/N/48/EEC/Add.2
Page 17
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.
(e) Trade effects of the subsidy
As this is a non-specific programme, the trade effects are negligible.
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 capital inflow.
(b) 1998 budget
The budget amounted to BF 3,859.39 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 orlegal 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 European Commission upon a proposal by a
member State.  In defining the scope of such z ones, the Commission of the European Union uses a
method defined in 1988 in the "Coordination principles for regional aid".  This method is essentiallybased on an analysis of objective criteria, including the per capita GDP and the unemployment rate.G/SCM/N/48/EEC/Add.2
Page 18
(d) Duration
No time-limit has been fixed for the scheme's application and the budget is adopted annually.
(e) Trade effects of the subsidy
Because of the programme's objective, the trade effects will be negligible.
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 September 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) 1998 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 444,200,000,
BF 874,600,000 and BF 69,200,000, 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.G/SCM/N/48/EEC/Add.2
Page 19
(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.
(e) Trade effects of the subsidy
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 isextremely difficult to apply statistical tools to them .  Because the subsidy is not specific, the effects in
the context of the SCM Agreement will clearly be negligible.G/SCM/N/48/EEC/Add.2
Page 20
4. FLEMISH REGION
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.
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 1998
- Interest subsidy and capital premium:  BF 4,060,110,000 of commitments;- tax concessions:  see the figures from the Ministry of Finance;- loan guarantee:  BF 352,500,000 of guarantees (amount of investment);
- interest-free repayable credit:  BF 0.
(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) 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.G/SCM/N/48/EEC/Add.2
Page 21
It concerns investment in development zones in the Flemish region that leads 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.
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 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 developmentzones 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 enterprise 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.
(f) Trade effects
No statistical data permitting an assessment of the aid's trade effects are available.
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.G/SCM/N/48/EEC/Add.2
Page 22
(b) Total amount of aid in 1998
- Interest subsidy and capital premium:  BF 1,611,610,000 of commitments;
- exemption from tax on income from immovable assets:  see the figures from the
Ministry of Finance;
- loan guarantee:  BF 60,630,000 of guarantees (amount of net losses).
(c) Purpose of the 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) 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 in vestment for the region or the favourable 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 term 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.
(f) Trade effects
No statistical data permitting an assessment of the aid's trade effects are available.
4.1.3 Decree of 15 December 1993 to promote economic growth in the Flemish region
(a) Form of the aid
- Investment premium;G/SCM/N/48/EEC/Add.2
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- exemption from tax on income from immovable assets;
- loan guarantee by the Flemish region;
- interest-free repayable credit.
(b) Total amount of aid in 1998
- Investment premium:  BF 2,720,530,000 of commitments;- exemption from tax on income from immovable assets:  see the figures from the
Ministry of Finance;
- loan guarantee:  BF 9,000,000 of guarantees (amount of investment);- interest-free repayable credit:  BF 0.
(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) 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 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.G/SCM/N/48/EEC/Add.2
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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.
(f) Trade effects
No statistical data permitting an assessment of the aid's effects on WTO trade are available.
4.2 Aid to integration of enterprises (= social economy)
Decision by the Flemish Government of 16 November 1994 and Ministerial Decree of
22 December 1994 on integration of enterprises "doorvoering van experimenten in verband met
invoegbedrijven en leereilandprojecten"  (period 1 July 1993-31 December 1994).
Decision of the Flemish Government of 26 March 1996 and Ministerial Decree of
22 April 1996 (as of 1 January 1995).
(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 1998
- Total premiums granted in 1998:  BF 53,100,000.
(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 apremium given to the employer.
(d) Duration of the programme
Indefinite.
(e) Trade effects
No statistical data permitting an assessment of the aid's trade effects are available.
4.3 Aid to enterprises for consultancy
Decree of 31 March 1993 on aid by the Flemish region to small enterprises which utilize
approved outside consultants.G/SCM/N/48/EEC/Add.2
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Decision of the Flemish Government of 9 December 1997 on the granting of financial aid to
small enterprises which utilize approved outside consultants and the approval of consultants.
The relevant directives.
(a) Form of the aid
Consultancy bonus for independent firms and new SMEs.
(b) Total amount of aid in 1998
Amount:  BF 4,079,834 (20 dossiers).
(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 during their
start-up period.
(d) Duration of the programme
Indefinite.
4.4 Research and development aid
Decision of the Flemish Research and Technological Development Fund of 23 October 1991.
(a) Form of the aid
- Grants for basic research;- loans with conditional repayment for prototyping and development.
(b) Total amount of aid in 1998
BF 2,163 million for 187 projects
(c) Purpose of the aid
The primary objective is aid for R&D.
(d) Duration of the programme
The data are related to continuous programmes and specific action programmes.
(e) Statistical data
Division by type of research:- Strategic basic research :  30 per cent
- industrial basic research :  30 per cent
- prototyping and development :  40 per centG/SCM/N/48/EEC/Add.2
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Division by applicant:
- Large companies :  57 per cent
- SMEs :  15 per cent- universities, research institutes :    5 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 ma nufacturing 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) Trade effects
There are no statistical data available permitting an assessment of the aid's trade effects.
4.5 Aid to the fisheries and aquaculture sector
- Decree of 13 May 1997 establishing a financing instrument for the Flemish fisheries
and aquaculture sector;
- Flemish Government Decree of 7 July 1998 on aid to investment and setting up in the
fisheries and aquaculture sector;
- Ministerial Decree of 14 July 1998 on aid to investment and setting up in the fisheries
and aquaculture sector.
(a) Form of the aid
- Interest rate subsidy:  subsidized interest rates on loans granted to shipowners and
fish farmers and their cooperatives;
- capital subsidy when investment is financed through own funds;
- loan guarantees for shipowners and fish farmers.G/SCM/N/48/EEC/Add.2
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(b) Total amount of aid in 1998 (in terms of commitments)
- Interest rate subsidies BF 135,419,194
- capital premiums BF 15,992,012- loan guarantees BF 206,236,106
(c) Purpose of the aid
The aid is granted to shipowners and fish farmers and to their organizations and cooperatives
in order to promote operations to increase the productivity of shipping and fish farming companies, toensure their profitability and reduce costs.
(d) Duration of the programme
Indefinite.
(e) Rules and conditions
The beneficiaries of this aid are family sea-fishing enterprises and fish farms. The aid is
granted to beneficiaries after examination of the dossiers individually.  The subsidization limits set outin Regulation (EC) 2468/98 (formerly 3699/93) apply.
(f) Trade effects
The purpose of the aid is structural and intended to promote fishing and aquaculture by
improving the efficiency of the structures, therefore, there are no statistical data available permitting
an assessment of the effects on global trade.
As the capacity of the fishing fleet and the aquaculture sector is very limited, the effect on
global trade is negligible.
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