G/SCM/N/343/JOR  
 
20 January 2020 
(20-0528) Page: 1/4 
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 COUNTERVAILING M EASURES  
JORDAN  
The following communication, dated 13 January 2020, is being circulated at the request of the 
delegation of Jordan . 
 
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The Government of Jordan, pursuant to Article XVI:1 of GATT and Article 25 of the Agreement on 
Subsidies and Countervailing Measures, submits its "New and Full Notificatio n" for the year 2018.  
This notification is also being submitted for the purposes of final transparency in the context of the 
extensions granted to Jordan under Article 27.4 of the Agreement on Subsidies and Countervailing 
Measures, pursuant to  WT/L/691  and G/C/W/705/Rev.2 . It also serves to provide an update on the 
progress made towards compliance with the same obligation.  
1. Title of the subsidy programme  
Partial or Total Exemption from Income Tax for Profits on Certain Export.  
2. Period covered by the notificat ion 
The period covered is the year 2018 . 
3. Policy objective and/or purpose of the subsidy  
The main rationale for introducing this export subsidy programme  was to offset the negative effects 
of the 1991 Gulf War and the loss of Jordan's main trading partner , Iraq. The programme was 
introduced then to stimulate export performance. The remarkable increase in oil prices in the year 
2008 and its persistent fluct uations afterward has affected depressingly Jordan's exports , together 
with the negative consequences of the global financial crisis.  
The nonstop regional and international proceedings taking place almost in every neighboring Arab 
state has imposed instabi lity in those countries in terms of political, economic and social 
transformations.  The Jordanian economy, more than other economies in the region, was greatly 
influenced by those regional circumstances , together with the displacement of many residents of 
those neighboring in the Kingdom since the year 2010 up to now. Jordan hosted several influxes of 
refugees from neighboring countries, mainly from Iraq and Syria, which had a negative impact on 
the national budget and infrastructure. With Syrian citizens r esiding in the country exceeding 
1.4 million, including refugees , this burden strained the infrastructure, education, health, water, 
food and other sectors. Syrian labor force is also pushing into the job market traditionally reserved 
to Jordanians and th is reduces job opportunities for locals.  G/SCM/N/343/JOR  
 
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  The disruption of the Egyptian gas supplies that has been used by industries and energy generation 
has very negative impacts on Jordan economy as a whole. Jordan's trade deficit rose 
unprecedentedly due to the rise i n the bill of energy imported from global markets. To this effect, 
the instability in the region because of the political situation in many Arab countries had severe 
impacts on the trade performance of Jordan and a decrease in Jordan exports, along with th e closure 
and loss of traditional markets for Jordanian exports , mainly Syria and Iraq , as well as losing other 
significant markets.  
4. Background and authority for the subsidy  
a. Background  
The programme  was established in 1995, exempting profits gained from exporting activities in a trial 
to remedy the harmful effects of the economic and social factors that affected Jordan by opening up 
the economy in light of the mentioned political circumstances. 98% o f the domestic exporting 
industrial companies which were of small sized nature, suffered from the lack of market accessibility, 
obstructing them from reaching economies of scale, which led to higher costs of production and 
hence limiting their competition capabilities in global  markets.  
b. The Authority Responsible  
The Income Tax Department/ Ministry of Finance.  
c. Legislation  
The implemented legislation is the Income Tax Law No. 34 for the year 2014 , amending Income Tax 
Law No. 28 for the year 2009, which includ ed the following article relating to the subsidy programme . 
Article 4(e) of the law, which deals with the exemption from income tax and states the following:  
"Certain types of local origin goods and services ' exports outside the Kingdom may be totally or 
partially exempted from tax, provided that the basis of the exemption and the types of goods and 
services included in this exemption and the rate and period of the exemption shall be determined 
according to a regulation issued for this purpose."  
5. Form of the  subsidy (i.e. grant, loan, tax concession, etc.)  
Tax concession.  
6. To whom and how the subsidy is provided (whether to producers, to exporters, or others , 
through what mechanism; whether a fixed or fluctuating amount per unit; if the latter, how 
determined)  
a. To whom and how the subsidy is provided  
Domestic industrial companies are entitled to benefit from this programme in addition to domestic 
exporting companies specialized in exporting local goods and products. Exemptions are granted 
through subm itting official documents to the income tax department verifying export activities.  
b. Amount  
The amount of exemption is determined according to the imputed percentage of net profits resulting 
from export activities. The normal income tax to be paid in absenc e of the programme is an average 
of 15% or less on the profits generated from all operations irrespective of the nature of sales.  G/SCM/N/343/JOR  
 
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  7. Subsidy per unit or in cases where this is not possible, the total amount or the annual amount 
budgeted for that subsidy (indi cating, if possible, the average subsidy per unit for the 
preceding year). Where provision of per unit subsidy information (for the year covered by the 
notification, the previous year, or both) is not possible, a full explanation  
The normal income tax to b e paid in absence of the programme, is an average of 15% or less on 
the profits generated from all operations irrespective of the nature of sales and hence subsidy per 
unit amounts to 1.5% or less for each Jordanian Dinar.  
8. Duration of the subsidy and/or an y other time limits attached to it, including date of 
Inception/commencement  
This programme has been in effect since the year 1995.  
9. Statistical data permitting an assessment of the trade effects of the subsidy. The specific 
Nature and scope of such data is  left to the judgment of the notifying Member. To the extent 
Possible, relevant and/or determinable, however, it is desirable that such information include 
Statistics of production, consumption, imports and exports of the subsidized product(s) or 
Sector  
Trade effects  
In the year 2018, the value of exports entitled for exemption was US$ 6,167,162,041 while the 
approximate calculated value of exemption amounted to US$ 92,507,431. The total amount of 
exemption implies that the income tax relief still has a ver y slight effect on Jordan's international 
trade, realizing that Jordan is a developing country with a share not greater than 0.10% of world's 
export trade, it is clear that no harmful effects have been introduced on the international trade as a 
result of t he subsidy programme.  
a. For the three most recent years for which statistics are available;  
b. For a previous representative year, which, where possible and meaningful, should be the 
latest year preceding the introduction of the subsidy or preceding the last major change 
in the subsidy.  
Table 1  Income Tax Relief Classified by HS Chapters in US$ for the year 2018  
Income Tax 
Relief in  US$ Total Exports  Value  
in US$  Total Exports Value benefiting  
from this programme in US$  Income Tax Relief  
in US$ 
2017 6.3b 3,765,378,043  67,776,805  
2016 6.2b 4,737,484,249  71,062,264  
2015 7 b 6,316,243,360  93,409,232  
Total exports value: 6.6 b. 
Total exports value benefiting from this programme : 6,167,162,041 . 
Income tax relief: 92,507,431 . 
Income tax relief  EXPORT VALUE $  Chapters  
1,402,992  93,532,775  17-19 
15,098,914  1,006,594,238  21-24 
17,855,620  1,190,374,662  26-30 
4,873,419  324,894,577  32-38 
3,920,780  261,385,301  39-40 
80,361  5,357,428  41-43 
141,108  9,407,190  44-46 
2,429,898  161,993,224  47-49 
14,526  968,377  50-52 
26,938,164  1,795,877,610  54-63 
44,715  2,980,968  64-67 
2,586,123  172,408,189  68-70 
2,013,958  134,263,856  71 
8,005,882  533,725,496  72-83 G/SCM/N/343/JOR  
 
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  Income tax relief  EXPORT VALUE $  Chapters  
5,231,129  348,741,920  84-85 
170,423  11,361,558  86-89 
784,785  52,319,024  90-91 
914,635  60,975,648  94-96 
92,507,431  6,167,162,041  Total  
 
Actions that have been taken or in the process of being undertaken:  
With reference to the draft decision on waiver concerning the extensions provided for in Article 27.4 
and Article 27.2(b) of the Agreement of Subsidies and Countervailing Measures of the transition 
period for the elimination of export subsidies of Jordan , document G/C/W/705/Rev.2, and in light of 
Jordan 's commitments to provide full transparency to the Council, the Government of Jordan wishes 
to notify the Council with the activities and progress in developing the WTO -consistent replacement 
program:  
1. A national committee was established , chaired by the Secretary General of Ministry of 
Industry, Trade and Supply , and includes senior officials from relative entities from both public 
and private sectors. The role of the committee is to monitor the implem entation of the action 
plan within the estimated  time frame and to develop necessary technical and legal frameworks 
for the alternative subsidy program in cooperat ion with a broad group of stakeholders.  
2. A number of  alternative subsidy programs were provided with the technical assistance of the 
USAID 's and were carefully considered to choose the best alternative one.  
3. A legal and economic expert  has been assigned  to support the implementation of the Project. 
The first  visit for the expert was during the week 18 –23 December 2015 , represent ing the 
start of the USAID/JCP WTO Subsidies Project . The second visit was on 23 -27 April 2016 and 
the third was on 5 -6 April 2017.  
4. As for the legislative stage , a new income tax law w as issued , Income Tax Law No(38) for the 
year 2018 , in a view to attain compatibility with elements of the SCM Agreement.  The new law 
had stated explicitly in Article (3) (a) (4)  that: 
Any income incurred in or from the Kingdom for any person regardless of  the place of fulfilment shall 
be subject to tax including the  following income: Income from selling goods.  
1. The new  subsidy program introduced in the Income Tax Law No(38) for the year 2018 doesn 't 
have any linkage to export activity and to be implemented  starting from 1  January  2019 as 
soon as the regulation governing it be issued, and will be notified on an annual basis pursuant 
to Article 25 of the SCM Agreement as soon as being implemented.  
2. Jordan 's current export subsidy program has been te rminated at 31  December 2018, pursuant 
to the transition period for the elimination of export subsidies of Jordan in document 
G/C/W/705/Rev.2 and pursuant to Article (3) of Income Tax Regulation No (106) for the year 
2016 dealing with the "Exemption of Pro fits of Goods and Services' Exports from Income Tax" 
which had stated that income resulting from exporting goods of local origin outside the 
Kingdom is totally exempted from income tax until only 31  December 2018. 
 
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