G/SCM/N/343/TPKM  
 
17 May 2019  
(19-3464) Page: 1/23 
Committee on Subsidies and Countervailing Measures  Original: English  
 
 
SUBSIDIES  
NEW AND FULL NOTIFIC ATION PURSUANT TO AR TICLE XVI:1 OF THE  
GATT 1994 AND ARTICL E 25 OF THE AGREEMEN T ON 
SUBSIDIES AND COUNTE RVAILING MEASURES  
THE SEPARATE CUSTOMS TERRITORY OF TAIWAN ,  
PENGHU , KINMEN AND MATSU 
The following notification, dated 30 April 2019, is being circulated at the request of the Delegation 
of the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu.  
 
_______________  
 
 
I. AGRICULTURE  ................................ ................................ ................................ .........  2 
A. SUPPORT FOR RICE  ................................ ................................ ................................ . 2 
B. SUPPORT FOR DIVERSIFIED CROPS  ................................ ................................ ........  3 
C. SUPPORT FOR TOBACCO LEAVES  ................................ ................................ .............  4 
D. SUPPORT FOR SUGAR  ................................ ................................ ..............................  5 
E. INTEREST SUBSIDY  ................................ ................................ ................................ . 6 
II. FISHERIES  ................................ ................................ ................................ ..............  7 
A. FISHING VESSELS BUY -BACK PROGRAMME  ................................ .............................  7 
B. REWARD FOR CLOSING FISHERY SEASON  ................................ ...............................  8 
C. FISHING VESSELS MARINE INSURANCE REWARD  ................................ ...................  9 
D. PROTECTION AND INDEMNITY INSURANCE FOR FISHING VESSELS  OPERATING 
IN THE MARITIME AREA SUBJECT TO THE FISHERIES AGREEMENT  BETWEEN 
THE SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU 
AND JAPAN   ................................ ................................ ................................ .................... 10 
III. INDUSTRY  ................................ ................................ ................................ .......... 11 
A. LOANS - LOANS FOR SMALL AND MEDIUM -SIZED ENTERPRISES (SMES)  ............... 11 
1. Specific and urgent financing and loans intended for recovery plans from 
damage  caused by disasters  ................................ ................................ ........................... 11 
2. Medium - and long -term loans for product marketing and loans for overseas 
investment and construction projects  ................................ ................................ ............. 12 
B. LOANS FOR PRIVATE ENTERPRISES  ................................ ................................ .......13 
1. Loans for small and medium -sized enterprises and private enterprises  ................. 13 
C. DUTY AND TAX EXEMPTIONS GRANTED TO ENTERPRISES LOCATED WITHIN 
A  DESIGNATED ZONE  ................................ ................................ ................................ .....14 G/SCM/N/343/TPKM  
 
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  1. Duty and ta x exemptions for high -technology industries  ................................ .......14 
2. Duty and tax exemptions for in -zone enterprises  ................................ ................... 16 
D. SUBSIDIES FOR THE ESTABLISHMENT AND OPERATION COSTS OF  PETROLEUM 
FACILITIES, AND PRODUCTS CONSUMPTION COSTS IN THE  REMOTE AREAS, 
ABORIGINAL  AREAS AND ISOLATED ISLAND AREAS  ................................ ....................... 17 
IV. RESEARCH AND DEVELOP MENT  ................................ ................................ .............. 18 
A. FUNDS GRANTED FOR DEVELOPMENT OF NEW OUTSTANDING PRODUCTS  ............. 18 
B. FUNDS GRANTED FOR PROMOTING DEVELOPMENT OF INDUSTRIAL  
TECHNOLOGY   ................................ ................................ ................................ ................. 20 
C. FUND GRANTED FOR ENCOURAGING EXPLORATION AND DEVELOPMENT OF 
OIL AND NATURAL GAS RESERVES  ................................ ................................ .................. 22 
 
I. AGRICULTURE  
A. SUPPORT FOR RICE  
1. Title of the programme  
 
Support for rice.  
 
2. Period covered by the notification  
 
2016-2017. 
 
3. Policy objective and/or purpose  
 
The policy objectives are to ensure the security of the food supply by balancing supply and demand 
for rice, and to stabilize rice prices for the maintenance of farmers' income.  
 
4. Background and responsible authorities  
 
a. Laws and regulation s: Agriculture Development Act.  
 Food Administration Act.  
b. Responsible authorit ies: Council of Agriculture.  
5. Form of the subsidy/to whom and  how the subsidy is provided  
 
There are three types of rice purchase s - planned purchase, supplementary purchase and additional 
purchase. The planned purchase is made at guaranteed prices  which  are determined by taking into 
account production costs. The prices are set at NT$ 26 per kilogram for Japonica -type rice , and NT$25 
for Indica -type rice and glutinous rice. The quantity of the planned purchase is limited to  2,000 kg 
per hectare for the fir st crop and 1, 500 kg for the second crop. Supplementary rice purchase prices 
are set at NT$ 23 per kilogram for Japonica -type rice , and NT$ 22 for Indica -type rice and glutinous 
rice. The quantity of the supplementary purchase is limited to 1,200 kg per hect are for the first crop 
and 800 kg for the second crop. The prices for additional purchase s are set at NT$ 21.6 per kilogram 
for Japonica -type rice , and NT$ 20.6 for Indica -type rice and glutinous rice. The quantity of the 
additional purchase is limited to 3, 000 kg per hectare for the first crop and 2, 400 kg per hectare for 
the second crop.  
 
Planned, supplementary and additional rice purchases are made only for  the farmers who produce 
rice in paddy fields. Those who produce rice in the upland areas, are only eligible for supplementary 
and additional purchases. Farmers are free to decide whether they want to sell products to the 
government or not.  
 
6. Amount of the subsidy  
 
NT$557 million and NT$ 651 million for 20 16 and 2017, respectively.  G/SCM/N/343/TPKM  
 
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7. Duration of the subsidy and/or any other time -limits attached to it  
 
The duration of the subsidy is not specified.  
 
8. Statistical data  
 
 Unit: 1,000 MT.  
Item  Year Production  Consumption  Import  Export  
Rice 2016 1,264.1  1,267.1  150.8  104.6  
2017 1,396.1  1,294.4  154.2  28.6 
Note: The data in above table have converted to brown rice, and are sourced from "Food Supply and Utilization 
Yearbook" published by the Council of Agriculture.  
 
B. SUPPORT FOR DIVERSIFIED CROPS  
1. Title of the programme  
 
Support for diversified crops.  
 
2. Period covered by the notification  
 
2016-2017. 
 
3. Policy objective and/or purpose  
 
The policy objectives are to facilitate the adjustment of farmland utilization and to strengthen the 
farmland environmental conservation plan for sustainable use  of farmland as the structure of 
agricultural production undergoes adjustment.  
 
4. Background and responsible authorities  
 
a. Laws and regulation s: Agriculture Development Act.  
b. Responsible authorit ies: Council of Agriculture.  
5. Form of the subsidy/to whom an d how the subsidy is provided  
 
 (1) Diversion payment:  
 
The diversion payment is granted to those farmers  who follow the diversion programme from rice 
production to the production of diversion crops and adhere to any of the following cases : 
 
a. Growing rice in the base year (1994 -2003); or,  
b. Growing guaranteed price purchase crops of feed corn, sorghum or sugarcane in the base 
year; or,  
c. Registering as set -aside or diversion under "Rice Production and Rice Field Diversion 
Projects" in the base year.  
Diversi fied crops are selected according to policy objective and domestic conditions  for such crops 
as feed corn, soybean, forage crops, wheat, sugarcane and other specialty local crops.  Diversion 
payments are made at NT$ 15,000-55,000  per hectare . 
 
6. Amount of the subsidy  
 
NT$3,833 million and NT$ 4,350  million for 2016 and 20 17, respectively.  
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  7. Duration of the subsidy and/or any other time -limits attached to it  
 
The duration of the subsidy is not specified.  
 
8. Trade effect s or related statistical data  
 
a. Trade effects:  
After the three stages of the rice diversion programme and the set -aside programme  had been 
implemented, the acreage planted in rice dropped  from 645,855 hectares to 274,705  hectares  for a 
decrease of 57.5%,  from 1983 (the year prior to the implem entation of the projects) to 2017 . The 
production of rice also fell from 2.48 million tons to 1. 4 million tons  for a decline of 43.5% . The 
quantity of rice purchased by the government was dropped  from 1.1 million tons to 0.47 million tons  
for a decrease of  57.3% . Measures relating to sweet potatoes, peanuts, vegetable, forage and other 
miscellaneous crops contributed to reductions in the production of rice.  
 
b. Related statistical data:  
Subsidy  for diversified crops in 201 6 and 201 7 
 Unit: NT$ 1,000 
Products  2016 2017 
Feed Corn 438,487  467,788  
Vegetables  122,978  141,326  
Forage Crops  585,473  551,808  
Other Crops  2,685,910  3,188,667  
Total 3,832,848  4,349,589  
 
C. SUPPORT FOR TOBACCO LEAVES  
1. Title of the subsidy programme  
 
Support for tobacco leaves.  
 
2. Period covered by the notification  
 
Crop years 2015/2016-2016/2017 . 
 
3. Policy objective and/or purpose  
 
The purposes of the programme are to maintain the tobacco farmers' income level  and improve the 
quality of tobacco leaves produced.  
 
4. Background and responsible authorities  
 
a. Laws and regulation s: The Tobacco and Alcohol Administration Act.  
b. Authorities: Ministry of Finance . 
 
5. Form of the subsidy/to whom and how the subsidy is provided  
 
A purchase under restricted price tendering is made according to the Government Procurement Act. 
The amount of subsidy is the purchase quantity multiplied by the price difference  between the  
purchase  price and  the external reference price  which is based on the average of price s from 1990 
to 1992. 
 
6. Amount  of the subsidy  
 
NT$180.7 million  and NT$177.2  million for the crop years 2015/2016 and 2016/2017 , respectively.  
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  7. Duration of the subsidy and/or any other time -limits attached to it  
 
The duration of the subsidy is not specified.  
 
8. Statistical data  
 Unit: MT. 
Item  Year Production  
(Crop year)  Consumption  Import  Export  
Tobacco 
leaves  2016 1,371  15,686.2  14,642.6  151.4  
2017 1,335  16,630.6  15,683.7  388.1  
Note: "Production" is sourced from "Agricultural Statistics Yearbook"  published by the Council of Agriculture. 
"Import" and "Export" are sourced from the import and export statistics compiled by the Directorate -General of 
Customs of the Ministry of Finance. "Consumption" is estimated by deducting the export from the sum of the 
production and the import . 
 
D. SUPPORT FOR SUGAR  
1. Title of the subsidy programme  
 
Support for sugar.  
 
2. Period covered by the notification  
 
Crop years 2017-2018. 
 
3. Policy objective and/or purpose  
 
The purpose of the programme is to develop the sugar industry in cooperation with the farmers.  
 
4. Background and responsible authorities  
 
a. Laws and regulation s: Regulation for the Sugarcane Planting Contract.  
b. Authorities:  TSC 
   Ministry of Economic Affairs.  
5. Form of the subsidy/to whom and how the subsidy is provided  
 
(1) Guaranteed purchase:  
 
TSC made contracts with farmers for the purchase of sugarcane and sugar sharing. The sugarcane 
farmers obtain 55% of the sugar made from sugarcane. If the domestic selling price of sugar is 
higher than the prepaid contract price, the sugarcane farmers are paid the domestic selling price. If 
the domestic selling price is lower than the prepaid contract price, the farmers are paid the prepaid 
contract price. The contract price is set after taking the domestic selling price and the market ing 
costs into account. It has been frozen since 1990.  
 
(2) Other grants:  
 
The TSC provides grants to sugarcane farmers such as interest subsidy for loans for the purchase of 
inputs, insurance premium s for sugarcane farms, fees for pest and disease control , inspection fees 
for sugar brix, and others.  
 
6. Amount of the subsidy  
 
NT$40.2 million and NT$ 67.7 million for the fiscal years 20 17 and 2 018, respectively . 
 
7. Duration of the subsidy and/or any other time -limits attached to it  
 
The duration of the subsidy is not specified.  G/SCM/N/343/TPKM  
 
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8. Statistical data  
 Unit: 1,000 MT.  
Item  Year Production  Consumption  Import  Export  
Raw Sugar  2017 42.3 588.6  661.2  0 
2018 40.9 581.7  673.1  0 
 
E. INTEREST SUBSIDY  
1. Title of the subsidy programme  
 
The policy -oriented special  agricultural loan.  
 
2. Period covered by the notification  
 
2016-2017. 
 
3. Policy objective and/or purpose  
 
The overall objective is to assist farmers and businesses in agricultural industries to raise the funds 
needed for them to be able to operate smooth ly. This plan was devised to help them update their 
equipment, improve developmental skills and innovation, increase the added -value of their products, 
strengthen product sales , and enhance their competitiveness. In addition, the plan help s farmers 
who are affected by natural disasters to rebuild their homes and their livelihoods, thus allowing them 
to maintain their standard of living . 
 
4. Background and responsible authorities  
 
a. Laws and regulations:  Agriculture Development Act, Agriculture Finance Act,  
     Regulations of the Agricultural Development Fund  
b. Authorities:    Council of Agriculture.  
5. Form of the subsidy/to whom and how the subsidy is provided  
 
Preferential  interest rate loans: the loan capital is provided by credit departments of farmers' 
associations and fishermen's associations or the Agricultural Bank. The source of finance for the 
interest subsid y is the Agricultural Development Fund.  
 
6. To whom and how assistance is provided  
 
a. These preferential interest  rate loans are available to all farmers and fishermen, and are 
not limited to a specific industry or enterprise of agriculture.  
b. Different ceilings are set for different types of loans. Each loan application is subject to 
the given loan ceiling. The amount  of loan granted is decided by the bank, based on the 
financial situation of the applicant.  
7. Amount  of the subsidy  
 
The amount of interest subsidy was NT$1,287 million and NT$1,201  million for the fiscal years  2016 
and 20 17, respectively . 
 
8. Duration  
 
The duration of the subsidy is not clearly specified . 
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  9. Trade effects or related statistical data  
 
a. Trade effects:  
The programme is mainly used to promote the upgrading of the industry. Given the scope and nature 
of the programme, it is not possible to determine what, if any, trade effects may result directly from 
this programme.  
 
b. Related statistical data:  
Interest subsidy for loans granted in 201 6 and 201 7 
 Unit: NT$ 1,000 
Name of Project  2016 2017 
Loans to expand the family farm; to support land purchases by 
farmers  130,595  130,481  
Loans for farm machinery  82,952  89,386  
Loans for natural agricultural disasters  132,314  184,780  
Loans for accelerating rural construction  940,911  796,171  
Total 1,286,772  1,200,818  
Note:  Loans for accelerating rural construction include such items as:  
 
1. Loans in the agricultural food industry to provide guidance and assistance to management.  
2. Loans in the livestock and poultry industry to improve management efficiency.  
3. Loans to farmers management improv ement and agriculture production and marketing groups.  
4. Preferential loans extended to those businesses that move into the agricultural technology park.  
 
II. FISHERIES  
A. FISHING VESSELS BUY -BACK PROGRAMME  
1. Title of the programme  
 
Fishing Vessels Buy -back Program.  
 
2. Period covered by the notification  
 
2016-2018. 
 
3. Policy objective and/or purpose   
 
Due to severe overfishing worldwide, the U nited Nations (UN)  has been urgently calling on nations 
to reduce their fishing capacities. This programme seeks to alleviate pressures on the fishery 
resources and ensure their sustainability.   
 
4. Background and responsible authorities  
 
a. Laws and regulation s: 
(1) Directions on Buying Back and Processing Fishing vessels and Rafts in 2016.  
(2) Operation Directions on the 2nd Buying Back and Processing Fishing Vessels and Rafts in  2016 
(3) Operation Directions on Buying Back and  Processing Fishing Vessels and Rafts in 2018  
 
b. Authorities: Fisheries Agency, Council of Agriculture.  
5. Form 
 
Grant.  
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  6. To whom and how assistance is provided   
 
a. Beneficiaries: Owners of all varieties of fishing vessels with valid fishing licences, including 
recreational fishing vessels.  
b. Content:  
1. The following is the buy -back amount for fishing vessels, calculated and accumulated 
in 2016-2018: 
 
- NT$50,000 for each gross ton of the 1st to 5th ton;  
- NT$40,000 for each gross ton of the 6th to 10th ton;  
- NT$30,000 for each gross ton of the 11th to 20th ton;  
- NT$25,000 for each gross ton of the 21st to 50th ton;  
- NT$20,000 for each gross ton of the 51st to 100th ton;  
- NT$18,000 for each gross ton over 100 tons; with the maximum  amount for each 
eligible vessel being NT$7.9 million.  
 
2. Since 2008, the buy -back of fishing rafts have been  calculated according to the length 
of raft, the pipe diameter and the power of main engine.  
 
7. Amount  
 
Funds spent on buying back fishing vessels and rafts in 2016 totalled NT$46.67 million; funds spe nt 
in 2018 totalled NT$71.41 million.  
 
8. Duration  
 
The d uration of the subsidy is not clearly specified.  
 
9. Trade effects or related statistical data  
 
N/A. 
 
B. REWARD FOR CLOSING FISHERY SEASON  
1. Title of the programme  
 
Reward for Closing Fishery Season.  
 
2. Period covered by the notification  
 
2016-2018. 
 
3. Policy objective and/or purpose  
 
Due to the problem of overfishing globally , the UN is calling on nations to reduce their catches. This 
programme seeks to alleviate pressures on fishery resources and ensure their sustainability.  
 
4. Background and responsible authorities  
 
a. Laws and regulation s: Directions for Voluntary Fishing Suspense . 
b. Authorit ies:   Fisheries Agency, Council of Agriculture.  
 
5. Form 
 
Grant.  
 G/SCM/N/343/TPKM  
 
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  6. To whom and how assistance is provided  
 
Any fishing vessels with valid fishing licences that comply  with the related regulations of closing 
fishery except recreational fishing charter boats.  
 
7. Amount  
 
The budget for the programme totalled NT$180.96 million in 2016 and NT$183 million in 2017, and 
NT$183 million in 2018.  
 
8. Duration  
 
The d uration of the subsidy is not clearly specified.  
 
9. Trade effects or related statistical data  
 
N/A. 
 
C. FISHING VESSELS MARINE INSURANCE REWARD  
1. Title of the programme  
 
Fishing Vessels Marine Insurance Reward.  
 
2. Period covered by the notification  
 
2016-2018. 
 
3. Policy objective and/or purpose  
 
Insure fishing vessels against marine disasters.  
 
4. Background and responsible authorities  
 
a. Laws and regulation s: Regulation s for the Insurance Reward for Owners of Fishing Vessels.  
b. Authorit ies: Fisheries Agency, Council of Agriculture.  
5. Form 
 
Grant.  
 
6. To whom and how assistance is provided  
 
a. Beneficiaries: Owners of fishing vessels  
b. Content: The programme provides grants to cover a portion of the insurance costs for 
fishing vessels if damaged at sea.  
7. Amount  
 
The budget for the programme totalled NT$ 53.840  million for 2016, NT$50.045 million for 2017 and 
NT$50.069  million in  2018.  
 
8. Duration  
 
On-going since 1987.  
 
9. Trade effects or related statistical data  
 
N/A. 
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  D. PROTECTION AND INDEMNITY INSURANCE FOR FISHING VESSELS OPERATING IN 
THE MARITIME AREA SUBJECT TO THE FISHERIES AGREEMENT BETWEEN THE 
SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU AND 
JAPAN  
1. Title of the programme  
 
The Subsidy Programme for Protection and Indemnity Insurance for Fishing Vessels operating in the 
Maritime Area Subject to the Fisheries Agreement between the Separate Customs Territory of 
Taiwan, Penghu, Kinmen and Matsu and Jap an 
 
2. Period covered by the notification  
 
2016-2018. 
 
3. Policy objective and/or purpose  
 
To establish the insurance system of providing subsidies for Protection and Indemnity Insurance for 
Fishing Vessels operating in the Maritime Area Subject to the Fisheries Agreement between the 
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu  and Japan.  
 
4. Background and responsible authorities  
 
a. Laws and regulation s: Guidelines of Subsidizing Protection and Indemnity Insurance for 
Powered Fishing Boats Operating in the Maritime Area Subject to the Fisheries Agreement 
between the Separate Cust oms Territory of Taiwan, Penghu, Kinmen and Matsu  and Japan.  
b. Authorit ies: Fisheries Agency, Council of Agriculture.  
5. Form 
 
Grant.  
 
6. To whom and how assistance is provided  
 
Subsidies are mainly provided for longline fishing vessels operating in the Maritime Area Subject to 
the Fisheries Agreement between the Separate Customs Territory of Taiwan, Penghu, Kinmen and 
Matsu  and Japan. If other fishing vessels operating with diffe rent fishing methods intend to be 
insured, those fishing vessels are permitted to be subsidized.  
 
7. Amount  
 
N/A 
 
8. Duration  
 
On-going since 2 May 2017.  
 
9. Trade effects or related statistical data  
 
N/A. 
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  III. INDUSTRY  
A. LOANS - LOANS FOR SMALL AND MEDIUM -SIZED ENTERPRISES (SMES)  
1. Specific and urgent financing and loans intended for recovery plans from damage 
caused by disasters  
1. Title of the programme  
 
Specific and urgent financing and loans intended for recovery plans from damage caused by  
disasters.  
 
2. Period covered by the notification  
 
2017-2018. 
 
3. Policy objective and/or purpose  
 
Qualified SMEs are entitled to apply for financing and loans that are provided to help enterprises 
restructure during replacement of machinery and purchas e of new automated equipment.  
 
4. Background and responsible authorities  
 
a. Laws and regulation s:  
Statute for Development of Small and Medium -Sized Enterprises (Articles 9, 15, 17 and 18).  
Procedure s for Income -Expenditure Safeguarding and Utilization of the SME  Development Fund.  
 
The SME Development Fund was established according to Article 9 of the Statute for Development 
of Small and Medium -Sized Enterprises.  
 
b. Authorit ies: Ministry of Economic Affairs.  
Note: The cumulative amount reached by the end of fiscal year 20 18 for the SME Development Fund 
was NT $3.7 billion. 
 
5. Form 
 
Financing and loan.  
 
6. To whom and how assistance is provided  
 
All enterprises which meet the "Standards for Identifying a Small and Medium -Sized Enterprise" are 
eligible to apply .  
 
According to the "Standards for Identifying a Small and Medium -Sized Enterprise" published by the 
Ministry of Economic Affairs, an SME is a company or commercial enterprise registered in accordance 
with the law with capital or operating revenue below the f ollowing thresholds:  
 
a. For enterprises engaged in manufacturing, construction, mining or excavating, paid -in 
capital of less than NT$80 million.  
b. For enterprises engaged in other economic activities such as agriculture, logging, fishing, 
the raising of liv estock, utilities, commerce, transport, warehousing, communications, 
finance, insurance, real estate, commercial, social or individual services, an annual 
operating revenue of less than NT$100  million.  
The loan granted is provided  by the SME Development F und. The ceiling interest rate is 1% plus a 
flat rate of the 2 -year postal fixed savings rate.  
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  7. Amount  
 
Statistics for Specific Programmes:  
 
Loaned by the SME Development Fund  
Unit: NT$ million . 
Title of Programme  2017 -2018  
Urgent financing for major natural disasters  114 
 
8. Duration  
 
The above -mentioned programme loaned by the SME Development Fund was scheduled to be 
terminated after 2009 . However, in order to assist SMEs with accessing funding for recovery from 
disastrous damage, we decided to continue this programme.  
 
9. Trade effects or related statistical data  
 
Given the fact that 98% of enterprises are SMEs, it is difficult to estimate the trade effects of these 
programmes.  
 
2. Medium - and long -term loans for product marketing and loans for  overseas 
investment and construction projects  
1. Title of the programme  
 
Medium - and long -term loans for product marketing, and loans for overseas investment and 
construction projects.  
 
2. Period covered by the notification  
 
2017-2018. 
 
3. Policy objective and or/purpose  
 
These programmes are implemented for the purpose of providing SMEs with financial assistance in 
exploring new markets for their machinery and equipment, in investing and establishing plants in 
foreign countries, and in undertaking  overseas contracts for construction projects.  
 
4. Background and responsible authorities  
 
a. Laws and regulation s:  
Statute for Development of Small and Medium -Sized Enterprises (Articles 9, 15, and  16).  
Procedure s for Income -Expenditure, Safeguarding and Utilization of the SME Development Fund.  
 
b. Authorities: Ministry of Economic Affairs.  
5. Form 
 
Loan.  
 
6. To whom and how assistance is provided  
 
a. All enterprises which meet the "Standards for Identifying a Small and Medium -Sized 
Enterprise" are eligible for application.  
b. The approval of loan applications is performed by commercial banks. However, the capital 
needed is provided entirely by the SME De velopment Fund.  G/SCM/N/343/TPKM  
 
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  7. Amount  
 
Loaned by the SME Development Fund.  
FY 20 17-2018: NT$ 1 billion.  
 
8. Duration of subsidy  
 
The programmes are not subject to any fixed completion date.  
 
9. Trade effects or related statistical data  
 
Given the fact that 98% of enterprises are SMEs, it is difficult to estimate the trade effects of these 
programmes.  
 
B. LOANS FOR PRIVATE ENTERPRISES  
1. Loans for small and medium -sized enterprises and private enterprises  
1. Title of the programme  
 
Loans for small and medium -sized enterprises and private enterprises.  
 
2. Period covered by the notification  
 
2017-2018. 
 
3. Policy objective and/or purpose  
 
This programme is implemented for the purpose of improving production technology and product 
quality, promoting industrial upgrading and assist ing in the upgrading of small and medium -sized 
enterprises and private enterprises.  
 
4. Background and responsible authorities  
 
a. Law and regulation :  
 1. Prior to 12 May 2010 – Sub-paragraphs (2) and (3), and Paragraph 1 of Article 21 of 
the Statute for Upgrading Industries.  
 
 2. Sub-paragraphs (2) and (3), and Paragraph 1 of Article 21 of the Statute for Upgrading 
Industries were superseded by Artic le 30 of the Industrial Innovation Act, which was 
promulgated on 12 May 2010.  
 
b. Authorities: The guidelines for the loan programme are given in the Development Fund.  
5. Form 
 
Loans: 25% of each loan is provided by the Development Fund and 75% by domestic banks. 
 
6. To whom and how assistance is provided  
 
The loans are available to all enterprises and are not limited to a specific industry or enterprise.  
 
7. Amount  
 
There are no official statistics with respect to the programme.  
 
8. Duration  
 
The projects will be implemented until the expiration of the I ndustrial Innovation Act .  
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  9. Trade effects or related statistical data  
 
a. Trade effects:  
This programme is mainly implemented  to promote industry upgrading. In light of the scope and 
nature of the programme,  it is not possible to determine what, if any, trade effects may result.  
 
b. Related statistical data:  
Total amount of loans granted in 2017 
Name of Project  Number of Granted Cases Total Amount of  
Granted Loans  
(NT$  hundred million ) 
Loans to assist in the upgrading 
of small and medium -sized 
enterprises  1 0.04 
 
Total amount of loans granted in 2018  
Name of Project  Number of Granted Cases Total Amount of Granted 
Loans  
(NT$  hundred million ) 
Loans to assist in the upgrading 
of small and medium -sized 
enterprises  0 0 
 
C. DUTY AND TAX EXEMPTIONS GRANTED TO ENTERPRISES LOCATED WITHIN A 
DESIGNATED ZONE  
1. Duty and tax exemptions for high -technology industries  
1. Title of the programme  
 
Duty and tax exemptions for high -technology industries.  
 
2. Period covered by the notification  
 
Fiscal year 2017-2018. 
 
3. Policy objective and/or purpose  
 
This programme is implemented with a view to stimulating the research and innovation of industrial 
technology and to promote the development of advanced technology. The "Science -Based Industrial 
Park"(the Park) has been established by introducing sophistic ated industries and personnel with 
advanced technological backgrounds into a designated zone.  
 
4. Background and responsible authorities  
 
a. Law and regulation:  
 Act for Establishment and Administration of Science Parks  (Article  20); 
 Enforcement Rules of A ct for Establishment and Administration of Science Parks  (Article  17).  
 
b. Authorities:  The Park is managed by the Science Park Bureau;  
   The policy -making body is the Ministry of Science and Technology . 
5. Form 
 
The subsidy programme will be implemented in the form of dut ies and tax exemptions.  
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  6. To whom and how assistance is provided  
 
a. Effective from 1  January 2000, the merged Park entities in accordance with the domestic 
Company Law, or surviving or new Park entities after mergers, shall succeed to ta x 
benefits, which are not yet terminated nor fully offset, originally enjoyed by the dissolving 
science -based industry before mergers. As for succeeding to the exemption of profit -
seeking income tax as investment incentives from the dissolving Park entitie s, the 
surviving Park entities, within the scope of science -based industries under the 
merger/consolidation projects, shall continue to produce products or to provide services 
identical to those produced or provided by the dissolving Park entities and such  tax 
benefits shall apply only to the portion of income derived from products or services 
independently produced or provided by the original dissolving Park entities. If the tax 
benefits are provided in the manner of investment offset or deduction, such ta x benefits 
shall apply only to the payable tax portion of the surviving or new Park entities after 
mergers of the dissolving science -based industries (Article  18). 
b. All Park enterprises are entitled to the following exemptions:  
Customs duties, commodity ta x, and business tax on imported machinery and equipment, raw 
materials, commodities, fuel, and semi -finished products .  
 
Note: "Park enterprise" refers to a science -based industry and to an enterprise approved and 
established in the Park that is able to pr ovide services in respect of operational, management or 
technical support to science -based industries.  
 
A research and development institution or a venture capital investment incubatory centre may also 
apply for establishment and operation in the Park.  
 
A venture capital investment incubatory centre eligible for establishment in the Park shall be limited 
to one that engages in research and development activities, does not engage in mass production 
and has been approved by the Park Administration. It will stay in the Park for a period of not more 
than three years.  
 
7. Amount  
 
2017-2018 Business Tax Exemption for all Imports  
 Unit: NT$ million  
Year Total Import Value  Total Amount of Business  
Tax Exemption  
2017 795,883  39,794  
2018 738,397  36,920  
 
8. Duration  
 
There is no time limit attached to the programme.  
 
9. Trade effects or related statistical data  
 
 Unit: NT$ million  
Year 2017 2018 
Number of approved park enterprises  
(accumulated numbers ) 832 853 
Total import value  795,883  738,397  
Total export value  1,725,053  1,781,939  
 
In light of the scope and nature of the se programmes, it is not yet possible to determine what, if 
any, trade effects may result.  G/SCM/N/343/TPKM  
 
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2. Duty and tax exemptions for in -zone enterprises  
1. Title of the programme  
 
Duty and tax  exemptions for in -zone enterprises.  
 
2. Period covered by the notification  
 
Fiscal  years 2017 -2018.  
 
3. Policy objective and/or purpose  
 
Export Processing Zones have been established for the purpose of promoting investment and 
international trade.  
 
4. Background and responsible authorities  
 
a. Laws and regulation s: 
 Statute for Establishment and Administration of Export Processing Zones (the EPZ  Law), 
(Articles 1, 5 and 13).  
 Measures for the Screening of Application for Establishment of Enterprises in Ex port Processing 
Zones.  
 Categories of Industr ies eligible to be established in Export Processing Zones.  
 
b. Authorities:  
 Export Processing Zones are managed by the Export Processing Zone Administration.  
 The policy -making body is the Ministry of Economic Affairs.  
The task for reviewing the eligibility of enterprises established in Export Processing Zones shall 
be undertaken by the Export Processing Zone Administration together with the other 
government agencies involved.  
 
Note: In -zone enterprises includ e industries authorized to be engaged in manufacturing, processing, 
assembly, research and development, trade, consulting, technical services, warehousing, 
transportation, loading and unloading, packing, repairs and other related businesses approved by 
the Ministry of Economic Affairs for Export Processing Zones.  
 
5. Form 
 
Duties and tax exemptions.  
 
6. To whom and how assistance is provided  
 
All in-zone enterprise industries are entitled to the following exemptions:  
 
a. Import duty, commodity tax and business tax on imported machinery and equipment.  
b. Import duty, commodity tax, and business tax on imported raw and consumption 
materials, fuels, semi -finished products, samples, and finished products for transhipment 
by traders and warehousing operators.  
c. Deed tax when acquiring a new standard plant building in the Export Processing Zone or 
acquiring a building from the Export Processing Zone Administration.  
d. It should be noted that within five years of import ation, all machinery and equipment are 
not entit led to duty and tax exemptions when shipped to leviable areas from Export 
Processing Zones. Moreover, products manufactured by in -zone enterprises shall be 
subject to customs duties, commodity taxes and business taxes when they are shipped to 
leviable area s. While customs duties would be applied on the basis of ex -factory prices G/SCM/N/343/TPKM  
 
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  minus value -added resulting from manufacturing or processing activities in the EPZs, other 
taxes would be based on the ex -factory price.  
7. Amount  
2017 -2018  Business Tax Exemption for all Imports  
Unit: NT$ million  
Year Total Import Value  Total Amount of Business  
Tax Exemption  
2017  270,617  13,531  
2018  281,313  14,066  
8. Duration  
 
There is no time limit attached to the programme.  
 
9. Trade effects or related statistical data  
 
 Unit: NT$ million  
Year 2017  2018  
Number of approved park enterprises  
(accumulated numbers ) 603 629 
Total import value  270,617  281,313  
Total export value  465,890  450,881  
 
In light of the scope and nature of these programmes, it is not yet possible to determine what, if 
any, trade effects may result.  
 
D. SUBSIDIES FOR THE ESTABLISHMENT AND OPERATION COSTS OF PETROLEUM 
FACILITIES, AND PRODUCTS CONSUMPTION COSTS IN THE REMOTE AREAS, 
ABORIGINAL AREAS AND ISOLATED ISLAND AREAS  
1. Title of the programme  
 
To subsidize the set up of petroleum facilities in remote, aboriginal and isolated island  areas as well 
as transportation outlays, and offer price subsidies.  
 
2. Period covered by notification  
 
Fiscal  years  2017-2018.  
 
3. Policy objective  
 
The goals of the subsidy are:  
 
(1) to ensure a steady and reliable supply of transport fuels  and LPG  in these areas, and  
(2) to maintain fuel prices at levels consistent with the main island.  
 
4. Background and responsible authorities  
 
(1) Laws and regul ations:  
 
Petroleum Administration Act was amended on 4 June 2014. The subsidy regulation was 
promulgated on 31 October and effective on 2 November 2014 . 
 
(2) Authorit ies: Bureau of Energy, Ministry of Economic Affairs.  
 
5. Form 
 
Grant.  
 G/SCM/N/343/TPKM  
 
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  6. To whom and how the subsidy is provided  
 
(1) Owners  and/or operators of petroleum facilities in these areas are entitled to apply for the 
following items :  
 
a. Subsidy for the establishment of petroleum facilities in such areas . 
b. Subsidy for maintenance cost s of petroleum facilities in such areas . 
c. Subsidy to offset the cost of shipping petroleum or LPG to such areas . 
d. Subsidy for extra personnel costs in the operation of petroleum facilities in such areas . 
(2) Subsidy to offset the cost of shipping  household LP G between remote areas, aboriginal areas 
and urban or/and suburban areas.  
 
7. Amount for the past two years  
 
Statistics for specific subsidies  
Unit: NT$  thousand  
Title of Subsidy  2017 2018 
Subsidy for the establishment of petroleum 
facilities in such areas  0 0 
Subsidy for maintenance cost s of petroleum 
facilities in such areas  33,172  34,373  
Subsidy to offset the cost of shipping petroleum or 
LPG to such areas  159,049  158,124  
Subsidy for extra personnel costs in the operation 
of petroleum facilities in such areas  33,080  32,530  
Subsidy to offset the cost of shipping household 
LPG between remote areas, aboriginal areas and 
urban or/and suburban areas  48,900  50,170  
Total 274,201  275,197  
 
8. Duration  
 
(1) The Program me was initia lized in 2002 , but the household LPG subsidy in aboriginal  areas was 
started on 19 August 2010.  
 
(2) The subsidies for the remote areas, aboriginal plan areas were started on 2  November  2014.  
 
(3) Not subject to deadline.  
 
9. Trade effects or related statistical data  
 
The Program me is based on the annual budget of the Petroleum Fund. In light of the scope and 
nature of activities that may be financially supported by these subsidies, it is not yet possib le to 
determine what, if any, trade effects may eventually result from this programme.  
 
IV. RESEARCH AND DEVELOP MENT  
A. FUNDS GRANTED FOR DEVELOPMENT OF NEW OUTSTANDING PRODUCTS  
1. Title of the programme  
 
a. Grants for development of new leading industries.  
b. Project for subsidizing development of major market -comprehensive products . 
c. Grants for development of innovative applications and services  G/SCM/N/343/TPKM  
 
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2. Period covered by the notification  
 
2017 to 2018 . 
 
3. Policy objective and/or purpose  
 
In order to encourage resea rch and development of new leading products and upgrade the technical 
capability of the leading industries, the programme grants funds to private enterprises.  
 
In response to promoting "critical leading edge of product development plan"  and taking into 
consideration the "market applicability" and "technological competitiveness", the Industrial 
Development Bureau of the Ministry of Economic Affairs launched the new special "project for 
subsidizing development of major market -comprehensive products"  in June 2010 and thereafter.  
 
To encourage the development of innovative market -oriented trading service model, and guide the 
planning of market assessment, developing the market -oriented innovative business or service 
model through the integration of cross -cutting technology applications or services business 
processes and business model of innovation.  
 
4. Background and responsible authorities  
 
a. Laws and regulation s:  
Measures for Assistance in the Development of New Leading Products were promulgated on 
26 April 1991 and were superseded by the Subsidy, Reward, and Assistance Regulations for 
Promoting Industry Innovation by the Ministry of Economic Affairs on 24 May 2018.  
 
b. Authorities: The Industrial Development Bureau, Ministry of Economic Affairs.  
5. Form 
 
Grant.  
 
6. To whom and how assistance is provided  
 
a. Any company incorporated under the Company Law with sound financial standing and 
without ever having a record of refusal or bounced cheque through a domestic bank, may 
apply for the assistance fund rel ating to the development of a new leading product. The 
product should possess great market potential and its core technology should surpass the 
current level of domestic industrial technology.  
b. The assistance funds granted are a total of no more than fifty  per cent (50%) of the 
amount  of the following expenses incurred exclusively for the development of new leading 
products:  
Costs incurred for full -time research personnel;  
1. Costs of consumable instruments and raw materials;  
2. Costs for use and maintenance o f R&D equipment;  
3. Costs for technology transfer.  
4. Travel fees related to the project.  
 
7. Amount  
 
a. Since the programme's inception, the cumulative amount of grants stands at 
NT$20,861,897,898 at the end of fiscal year 2016 (fiscal years 1992 -2018).  G/SCM/N/343/TPKM  
 
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  b. For the fiscal year 2013: the amount of grants was NT$ 468,428,332 . A breakdown of the 
products involved is shown below:  
 Unit: NT$  thousand  
Name of Project (or Sector)  Grant  Amount  
Grants for development of new leading industries  371,492  
Project for subsidizing development of major market -
comprehensive products  96,936  
Total 468,428  
 
c. For the fiscal year 2014: the amount of grants was NT$1,198,650,137. A breakdown of 
the products involved is shown below:  
 Unit: NT$  thousand  
Name of Project (or Sector)  Grant  Amount  
Grants for development of new leading industries  920,096  
Project f or subsidizing development of major market -
comprehensive products  188,874  
Grants for development of innovative applications 
and services  89,680  
Total 1,198,650  
 
d. For the fiscal year 2015 -2016: the amount of grants was NT$3,295,910,000. A breakdown 
of the products involved is shown below:  
 Unit: NT$  thousand  
Name of Project (or Sector)  Grant  Amount  
Grants for development of new leading industries  492,665  
Grants for development of innovative applications and 
services  142,170  
Grants for Industrial upgrading and transformation  2,661,075 
Total 3,295,910  
 
e. For the fiscal year 2017 -2018: the amount of grants for Industrial upgrading and 
transformation was NT$3,044,126,665. The yearly breakdown of the project is shown in 
below:  
Unit: NT$ thousand  
Name of Project  Year Grant Amount  
Grants for Industrial upgrading 
and transformation  2017 1,887,213  
2018 1,156,913  
Total 3,044,126  
 
8. Duration  
 
There is no time -limit attached to the programme.  
 
9. Trade effects or related statistical data  
 
It is not yet possible to determine what, if any, trade effects may result from this subsidy 
programme.  
 
B. FUNDS GRANTED FOR PROMOTING DEVELOPMENT OF INDUST RIAL TECHNOLOGY  
1. Title of the programme  
 
Technology Development Programme for Enterprise s. 
 G/SCM/N/343/TPKM  
 
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  2. Period covered by the notification  
 
2017-2018. 
 
3. Policy objective and/or purpose  
 
The programme's objective is to encourage businesses to engage in the development of 
technological innovations and applications for the purpose of reinforcing domestic enterprises' 
capabilities, especially in the field of research and development.  
 
4. Background and responsible authorities  
 
a. Laws and regulation s:  
Regulations of Subsidization for Encouraging Enterprises R & D Activities were promulgated on 27 
November 2002 and were superseded by the Subsidy, Assistance and Reward Regulations for 
Promoting I ndustry Innovation by the Ministry of Economic Affairs on 24 May 2018.   
 
b. Authorities: Department of Industrial Technology, Ministry of Economic Affairs.  
5. Form 
 
Fund assistance for advanced research and development.  
 
6. How assistance is provided and to  whom  
 
a. Any company established according to the Company Law with sound financial standing 
and research and development department that has made significant achievements in the 
past, and which is currently staffed by competent specialists, in the Separate Customs 
Territory of Taiwan, Penghu, Kinmen and Matsu, may apply for this fund to offset the costs 
of the following activities:  
1. Research and development of advanced technologies  that may be aptly characterized 
 as vital and innovative in the long term.   
2. Technologies research and development that enhance vertical or horizontal integration 
 and drive the forming of industry chain ecosystems or clusters.  
3. Establishment of research and development centers in the Separate Customs Territory 
of Taiwan, Penghu, K inmen and Matsu that create innovative technologies and services.  
4. Development of innovative or integrative manufacturing technology by small and 
 medium -sized businesses.  
b. The assistance funds to be granted shall not exceed 50% of the total amount of t he 
following expenses:  
1. Costs incurred for full -time and/or part -time research personnel;  
2. Costs of consumable instruments and raw materials;  
3. Costs for use and maintenance of R&D equipment;  
4. Costs for technology transfer; and  
5. Domestic travel  expenses.  
6. Rewards for patent application.  
 
7. Amount  
 
The total amount of grants in the fiscal year 2017-2018 was NT$ 3,942,135,000 .  
 
8. Duration  
 
There is no time -limit attached to the programme.  
 G/SCM/N/343/TPKM  
 
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  9. Trade effects or related statistical data  
 
It is not yet possible to determine what, if any, trade effects may result from this subsidy 
programme.  
 
C. FUND GRANTED FOR ENCOURAGING EXPLORATION AND DEVELOPMENT OF OIL AND 
NATURAL GAS RESERVES  
1. Title of the programme  
 
Fund Granted for Encouraging Ex ploration and Development of Oil and Natural Gas Reserves.  
 
2. Period covered by notification  
 
2017-2018. 
 
3. Policy objective and/or purpose  
 
The policy objectives of the programme are to secure oil supply and stabilize the domestic oil market.  
 
4. Backgr ound and responsible authorities  
 
a. Laws and regulation s: Petroleum Administration Act.  
b. Responsible authorit ies: Bureau of Energy, Ministry of Economic Affairs.  
5. Form 
 
Grant.  
 
6. How assistance is provided and to whom  
 
Companies limited by shares incorporated under the Company Law that engage in the exploration 
and development of oil and natural gas reserves are eligible for the grant.  
 
The grant is used only in support of the following activities:  
 
(1) The implementation of geological, geophysical , and/or geochemi cal surveys and research 
necessary for the exploration of oil and natural gas.  
 
(2) Drilling for the exploration and/or development of oil and/or natural gas reserves.  
 
(3) Any other necessary pertinent activities that have been reviewed  and approved by the 
authorities.  
 
The total subsidy allocated for an applicant's exploration proposal is not to exceed 50% of the budget 
in the applicant's proposal. The total subsidy allocated for an applicant's development proposal is 
not to exceed 12%  of the budget in the applicant's proposal.  
 
While the proposal is successful, the whole grant plus additional feedback, computed by 10% 
compound interest, must be returned in 5 -15 years.  
 
7. Amount  
 
 Unit: NT$  thousand  
Year 2009  2010  2011  2012  2013  2014  2015  2016  
Total  294,125  308,751  398,648  251,542  350,000  430,000  400,000  68,342  
 
Year 2017  2018  
Total  155,592  3,949  
 G/SCM/N/343/TPKM  
 
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  8. Duration  
 
The programme was initiated in 2002. It is not subject to any fixed completion date.  
 
9. Trade effects or related statistical data  
 
Given the scope and nature of the activities that may be financially supported by th is subsidy, it is 
not yet possible to determine what, if any, trade effects may eventually result from this programme.  
 
__________