G/SCM/N/275/JOR  
 
26 June 2014  
(14-3681)  Page: 1/5  
Committee on Subsidies and Countervailing Measures  Original: English  
 
 SUBSIDIES 
 
 TRANSPARENCY NOTIFICATION CONCERNI NG THE EXTENSIONS PROVIDED FOR  
IN ARTICLE 27.4 OF THE AGREEMENT ON SUBSIDIES AND COUNTERVAILING  
MEASURES OF THE TRANSITION PERIOD FOR THE ELIMINATION OF EXPORT  
SUBSIDIES, GRANTED PURSUANT TO THE PROCEDURES IN THE  
GENERAL COUNCIL DECISION WT/L/691 
JORDAN  
The following communication, dated 19 June 2014, is being circulated at the request of the 
Delegation of Jordan. 
 
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In accordance with Article XVI:1 of the GATT 1994 and Article 25 of the Agreement on Subsidies 
and Countervailing Measures, the Government of Jordan is pleased to provide the WTO Committee 
on Subsidies and Countervailing Measures with its notification, in compliance with the "procedures 
for continuation of extensions pursuant to Arti cle 27.4 of the SCM Agreement of the transition 
period under Article 27.2(b) of the SCM Agreement for certain developing countries "(document WT/L/691), and with reference also to document G/SCM/39, on which Jordan was granted an 
extension for the elimination of export subsidies programme which take the form of full or partial 
exemptions from import duties and internal taxes and which were in existence under the programme on 1 September 2001. 
 
The decision was made in recognition that Jordan is a developing country member, whose share of world merchandise export trade was not greater than 0.10% and whose total Gross National 
Income for the year 2000 as published by the Wo rld Bank, was at or be low US$20 billio n, and was 
otherwise eligible to request an extension pursua nt to Article 27.4 of the Agreement on Subsidies 
and Countervailing Measures ("SCM Agreement").  
1. Title of the subsidy programme 
 
Partial or Total Exemption from Income  Tax for Profits on Certain Export. 
 
2. Period covered by the notification 
 
The period covered is the year 2013. 
 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 performa nce, and to promote exports to non-traditional 
market. The remarkable increase in oil prices in the year 2008 and its persistent fluctuations 
afterward has affected depressingly Jordan's export s. A slower activity for small and medium size 
enterprises has been perceived as a result of trade liberalization and the incident of the financial 
crisis. The nonstop regional and international proceedings taking place almost in every 
neighbouring Arab state has imposed instability in those countries in terms of political, economic G/SCM/N/275/JOR 
 
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  and social transformations. The Jordanian economy, more than other economies in the region, was 
greatly influenced by these regional circumstan ces together with the displacement of many 
residents of those neighbouring in the Kingdom since the year 2010 up to now.  
4.  Background and authority for the subsidy: 
 
a. Background 
The programme was established in 1995, exemptin g profits gained from exporting activities 
in a trial to remedy the harmful effects of the economical and social factors that affected Jordan by opening up the economy in light of the mentioned political circumstances. 98% of 
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 Temporary Income Tax Law No. 28 for the year 2009 
amending the Income Tax Law No. 25 for the year 2001 amending the Income Tax Law 
No. 57 for the Year 1985.  
 
Article 4(e) of the law 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 serv ices included in this exemption and 
the rate and period of the exemption shall be determined according to a regulation issued for this purpose." 
"Regulation No. (70) For the year 2010 for the exemption of the profits of goods and 
services' exports from tax" has been issued . Article 7(a) of the Regulation excludes 
some exports from the exemption as follows: 
1. Phosphate, Potash, Cement and Fertilizer s exports, and any of their components 
or derivatives. 
2. Exports of goods and services subject to Protocol Trade, bilateral payments and 
repayment agreements, and any agreements concluded by the government that 
includes the exchange of any goods or services with any other country.  
3. Exports of any good approved by the Council of Ministers upon a joint 
recommendation of Minister of Finance and the competent Minister. 
 
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 submitting official docume nts to the income tax department verifying 
export activities. 
 G/SCM/N/275/JOR 
 
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  b. Amount 
The amount of exemption is determined accord ing to the imputed percentage of net profits 
resulting from export activities. The normal income tax to be 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.  
 7. Subsidy per unit or in cases where this is not possible, the total amount or the annual 
amount budgeted for that subsidy (indicating, 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 be 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 any 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(s): 
 
Trade effects 
 
In the year 2013, the value of exports entitl ed for exemption was US$6,822,142,342.25 while the 
approximate calculated value of exemption amounted for US$98,238,849.73. This figure indicates that the programme had supported beneficiaries' e fforts to explore further export opportunities. As 
a matter of fact the total amount of exemption implies that the income tax relief still has a very 
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 the 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 th e subsidy or preceding the last major change 
in the subsidy. 
 
Income Tax Relief in 
US $ Total Exports 
Value in US $ Total Exports Value benefiting 
from this programme in US $ Income Tax Relief 
in US $ 
2012 8 b 5,747,104,205.67 86,206,563.09 
2011 8 b 4,143,484,047.14 62,152,260.71 
2010 7 b 3,985,481,476.06 59,782,222.14 
 G/SCM/N/275/JOR 
 
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Table 1 
Income Tax Relief Classified by HS Chapters in US$ for the year 2012 
 
Total Exports Value:  US$8 b. 
Total Exports Value benefiting from this programme : US$6,822,142,342.25.  
Income Tax Relief:  US$98,238,849.73. 
 
 
 
Income tax relief  
Export value $ 
  
Chapters 
1,631,486.49 113,297,673.24 17-19 
3,296,154.48 228,899,616.90 21-24 
21,324,756.51 1,480,885,869.01 26-30 
4,390,306.62 304,882,404.23 32-38 
3,817,444.93 265,100,342.25 39-40 
101,604.13 7,055,842.25 41-43 
9,620,471.74 668,088,315.49 44-46 
3,482,192.53 241,818,925.35 47-49 
21,265,970.74 1,476,803,523.94 50-63 
34,627.40 2,404,680.28 64-67 
489,585.34 33,998,981.69 68-70 
1,839,156.36 127,719,191.55 71 
7,310,297.73 507,659,564.79 72-83 
5,409,470.09 375,657,645.07 84-85 
1,230,728.19 85,467,235.21 86-89 
153,410.87 10,653,532.39 90-92 
70.99 4,929.58 93 
1,579,831.87 109,710,546.48 94-96 
11,261,282.72 782,033,522.54 97-98 
98,238,849.73 6,822,142,342.25 Total 
 
 
10. Information referred to in Paragraph 1(f) of the General Council Decision of 2007 concerning 
the Action Plan for eliminating the export subsidy programme: 
 
a. The domestic procedures necessary to eliminate the export subsidy programme: 
In 2009, the government of Jordan undertook  consultations with relevant government 
bodies and organizations; among which is the Income Tax Department as the authority responsible for the exemption, as well as with the chambers of commerce and chambers of 
industry and other related bodies in Jordan as of the necessity of eliminating the programme 
at the end of the year specified by the General Council decision of 27 July 2007. Beneficiaries were notified through various industrial associations that the extension is given 
on a yearly basis and that Jordan will phase out this programme at the end of the extension 
period as set out in the general council decision of the WTO. 
 
b. Actions that have been or in the process of being undertaken: 
Income tax legislation was reviewed, a Temporary Income Tax law was issued (Temporary 
Income Tax Law No. 28 for the year 2009), in a view to attain compatibility with elements of the SCM Agreement, and which stated explicitly in Article (3)(a)(4) that: 
 G/SCM/N/275/JOR 
 
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  Article 3: 
 
a. Any Income incurred in or from the Kingdom for any person regardless of 
the place of payment even if it was from illegal sources, shall be subject 
to tax including the following: 
 (4)  Income from selling goods produced in the Kingdom whether sold in the 
Kingdom or exported. 
 
c. Future Actions 
Beneficiaries are informed of the date of termination of the programme. A decision from the 
Council of Ministers in Jordan will be issued to end all benefits of exports under the income 
tax law. The decision will be notified to the WTO committee in accordance with Jordan's 
rights and obligations under the Agreement on Subsidies and Countervailing Measures, and the programme will be phased out in a syst ematic way at the end of the year 2015 as 
specified by the General Council decision of 27 July 2007 (WT/L/691). 
 
 
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