G/SCM/N/253/JOR  
G/SCM/N/260/JOR  
 
13 August 2013  
(13-4330)  Page: 1/5  
Committee on Subsidies and Countervailing Measures 
 Original: English  
 
 SUBSIDIES 
NEW AND FULL NOTIFICATION PURSUANT TO ARTICLE XVI:1  
OF THE GATT 1994 AND ARTICLE 25 OF THE AGREEMENT  
ON SUBSIDIES AND COUNTERVAILING MEASURES 
NOTIFICATION CONCERNING THE EXTENSION UN DER ARTICLE 27.4 OF THE AGREEMENT ON 
 SUBSIDIES AND COUNTERVAILING MEASURES OF THE TRANSITION PERIOD UNDER  
ARTICLE 27.2(b) FOR THE ELIMIN ATION OF EXPORT SUBSIDIES 
JORDAN  
The following communication, dated 5 August 2013, is being circulated at the request of the 
Delegation of Jordan. 
 
_______________ 
 
 
In accordance with Article XVI:1 of the GATT 199 4 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 Article 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 World Bank, was at or below US$20 billion, 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 2012.  
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 G/SCM/N/253/JOR • G/SCM/N/260/JOR 
 
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  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 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 through the year 2010-2012.  
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, prov ided 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." 
"Regulation No. (70) For the year 2010 for the exemption of the profits of goods and 
services' exports from tax" has been issued. Ar ticle 7(a) of the Regulation excludes some 
exports from the exemption as follows: 
 
1. Phosphate, Potash, Cement and Fertilizers 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/253/JOR • G/SCM/N/260/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 2012, the value of exports entitled for exemption was US$5,747,104,205.67  while the 
approximate calculated value of exemption amounted for US$86,206,563.09. 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 $ 
2011 8 b 4,143,484,047.14 62,152,260.71  
2010 7 b 3,985,481,476.06 59,782,222.14  
2009 6.5 b 3,801,719,452.11 49,422,352.88  
 G/SCM/N/253/JOR • G/SCM/N/260/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$5,747,104,205.67  
Income Tax Relief:  US$86,206,563.09 
 
Income tax relief Export value $ Chapters 
1,252,305.81 83,487,053.90 17-19 
3,047,216.30 203,147,753.19 21-24 
16,005,440.81 1,067,029,387.23 26-30 
3,543,206.87 236,213,791.49 32-38 
4,662,204.02 310,813,601.42 39-40 
72,199.30 4,813,286.52 41-43 
11,834,566.96 788,971,130.50 44-46 
4,969,318.62 331,287,907.80 47-49 
17,025,514.38 1,135,034,292.20 50-63 
33,398.40 2,226,560.28 64-67 
591,583.87 39,438,924.82 68-70 
3,740,274.00 249,351,600.00 71 
6,737,714.47 449,180,964.54 72-83 
5,361,880.38 357,458,692.20 84-85 
442,882.30 29,525,486.52 86-89 
148,512.15 9,900,809.93 90-92 
35.00 2,333.33 93 
5,122,291.40 341,486,093.62 94-96 
1,616,018.04 107,734,536.17 97-98 
86,206,563.09 5,747,104,205.67  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: 
 
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: G/SCM/N/253/JOR • G/SCM/N/260/JOR 
 
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  (4)  Income from selling goods produced in the Kingdom whether sold in the 
Kingdom or exported. 
 
c. Future Actions 
 Public awareness campaigns will be conducted to ensure that all 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 systematic 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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