G/SCM/N/253/TPKM  
 
17 July 2013  
(13-3828)  Page: 1/23  
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 
THE SEPARATE CUSTOMS TERRITORY OF TAIWAN ,  
PENGHU , KINMEN AND MATSU 
The following notification, dated 12 July 2013, is be ing circulated at the request of the Delegation 
of The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu.   
_______________ G/SCM/N/253/TPKM 
 
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  TABLE OF CONTENTS 
 
I. AGRICULT URE ......................................................................................................... 3  
A. SUPPORT FOR RICE .................................................................................................. 3  
B. SUPPORT FOR SORGHUM AND FEED CORN .................................................................. 4  
C. SUPPORT FOR DIVERS IFIED CROPS ............................................................................ 5  
D. SUPPORT FOR TOBACCO LEAVES ................................................................................ 6  
E. SUPPORT FOR SUGAR ............................................................................................... 6  
F. INTEREST SUBSIDY .................................................................................................. 7  
II. FISHERIES .............................................................................................................. 9  
A. FISHING VESSELS BUY-BACK PROGRAMME .................................................................. 9  
B. REWARD FOR CLOSING FISHERY SE ASON .................................................................. 10 
C. FISHING VESSELS MARINE  INSURANCE REWARD ........................................................ 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 .................................................................................. 13 
B. LOANS FOR PRIVAT E ENTERP RISES ........................................................................... 14 
1. Loans for small and medium-sized en terprises and priv ate enterp rises ............................ 14 
C. DUTY AND TAX EXEMPTIONS GRANTED TO ENTERPRISES LOCATED WITHIN A 
DESIGNATED ZONE .......................................................................................................... 15 
1. Duty and tax exemptions for high-technology industries ............................................... 15 
2. Duty and tax exemptions for in-zone en terprises ......................................................... 17 
D. SUBSIDIES FOR THE ESTABLISHMENT AND OPERATION COSTS OF PETROLEUM 
FACILITIES, AND PRODUCTS CONSUMPTIO N COSTS IN THE MOUNTAIN AREAS AND 
OFFSHORE ISLA ND AREAS ................................................................................................ 18 
IV. RESEARCH AND DE VELOPMENT ............................................................................. 19  
A. FUNDS GRANTED FOR DEVELOPMENT OF NEW LEADING INDUSTRIES ............................ 19 
B. FUNDS GRANTED FOR PROMOTING DEVELOPM ENT OF INDUSTRIAL TECHNOLOGY ........... 21 
C. FUND GRANTED FOR ENCOURAGING EXPLORATION AND DEVELOPMENT OF OIL 
AND NATURAL GAS RESERVES ........................................................................................... 22 
 G/SCM/N/253/TPKM 
 
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  I. AGRICULTURE 
A. SUPPORT FOR RICE 
1. Title of the programme 
 
Support for rice. 
 2. Period covered by the notification 
 2009-2011.  3. Policy objective and/or purpose 
 The policy objectives are to ensure the securi ty of the food supply by balancing supply and 
demand for rice, and to stabilize rice pric es for the maintenance of farmers' income. 
 
4. Background and responsible authorities 
 
(a) Laws and regulations: Agriculture Development Act. 
 
Food Administration Act. 
 
(b) Responsible authorities: Council of Agriculture. 
 5. Form of the subsidy/to whom and how the subsidy is provided 
 There are three types of rice purchases - pl anned 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$25 for Indica-type rice and glutinous rice. The quantity of the planned purchase is 
limited to 2,000kg per hectare for the first crop  and 1,500kg for the second crop. Supplementary 
purchases are made to supplement shortages of the planned purchase quantity. Supplementary 
rice purchase prices are set at NT$ 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 1,200kg per 
hectare for the first crop and 800kg for the second crop. An additional purchase was made from 
the second crop in 2003. The prices for additional purchases 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 3,000kg per hectare for the first crop and 2,400kg per hectare for 
the second crop. 
 Planned, supplementary and additional rice purc hases are made only for the farmers who produce 
rice in paddy fields and follow the irrigational rotation scheme for planting and not planting. Those 
who produce rice in the upland areas or produce in the paddy fields but do not follow the 
government schedule for planting, 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$ 382 million, NT$ 501 million and NT$ 1,130 million for 2009, 2010 and 2011, respectively. 
 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 2009 1,276.5 1,317.9 103.3 8.4 
2010 1,168.0 1,270.7 181.5 9.8 
2011 1,347.8 1,246.1 131.7 19.2 G/SCM/N/253/TPKM 
 
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  B. SUPPORT FOR SORGHUM AND FEED CORN 
1. Title of the programme 
 
Support for sorghum and feed corn. 
 
2. Period covered by the notification 
 
2009-2011. 
 3. Policy objective and/or purpose 
 
The policy objectives are to maintain sorghum and feed corn production and to facilitate the 
adjustment of paddy field utilization.  
4. Background and responsible authorities 
 
(a) Laws and regulations:  
 
Regulation for the Purchase and the Sale of Dry-land Food Crops.  
 
(b) Responsible authorities: Council of Agriculture. 
 
5. Form of the subsidy/to whom and how the subsidy is provided 
 
Purchase prices are determined by adding the ne t profits to the production costs of each. The 
purchase prices are set at NT$15 per kilogram for feed corn and NT$14 for sorghum. The purchase quantities are limited to 5,000 kilograms per hect are for feed corn and sorghum. When the actual 
yield per hectare exceeds the purchase quantity ceiling, farmers may sell their products to the 
Government at the import prices.  Purchases at the set prices are made for those farmers whose production of sorghum or feed corn 
had been purchased by the Government in the base year (1994-96) or the year preceding the 
current year. The purchase of sorghum is limited to the first crop grown in the western plain area. The first and second crops of feed corn are pu rchased for the western mountainous area and the 
eastern region, while only the second crop is purchased for the western plain area. Farmers are 
free to decide whether or not they want to sell products to the Government. The purchase of sorghum has been cancelled since 2011. 
 
6. Amount of the subsidy 
 NT$ 107 million NT$ 33 million and NT$ 21 million for 2009, 2010 and 2011, respectively. 
 
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 
Feed corn 2009 46.0 4,629.3 4,583.3 0.0 
2010 34.6 4,995.3 4,960.7 0.0 
2011 35.1 4,125.1 4,090.0 0.0 
Sorghum 2009 0.7 69.6 68.9 0.0 
2010 4.4 74.2 69.8 0.0 
2011 3.4 101.0 97.6 0.0 
 G/SCM/N/253/TPKM 
 
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  C. SUPPORT FOR DIVERSIFIED CROPS 
1. Title of the programme 
 
Support for diversified crops. 
 
2. Period covered by the notification 
 
2009-2011. 
 3. Policy objective and/or purpose 
 
The policy objectives are to facilitate the adjustment of paddy field 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 regulations: Agriculture Development Act. 
 (b) Responsible authorities: Council of Agriculture.  
5. Form of the subsidy/to whom and 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. 
 
Diversion crops are selected according to supply and demand conditions for such crops as sweet 
potatoes, peanuts, vegetables, forage crops, feed corn and other miscellaneous crops. Diversion 
payments are made at NT$24,000-45,000 per hectare; bonus payments have been cancelled since 2009.  
6. Amount of the subsidy 
 
NT$ 1,214  million, NT$ 1,407 million and NT$ 1,950 million for 2009, 2010 and 2011, respectively. 
 
7. Duration of the subsidy and/or any other time-limits attached to it 
 
The duration of the subsidy is not specified. 
 8. 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 254,292 hectares for a decrease of 60.6% between 1983 (the year prior to the implementation of the projects) 
and 2011. The production of rice also fell from 2. 48 million tons to 1.35 million tons for a decline 
of 45.6%. The quantity of rice purchased by the Government was dropped from 1.1 million tons to 
0.38 million tons for a decrease of 65.5%. Measures relating to sweet potatoes, peanuts, 
vegetable, forage and other miscellaneous crops contributed to reductions in the production of 
rice.  G/SCM/N/253/TPKM 
 
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  D. SUPPORT FOR TOBACCO LEAVES 
1. Title of the subsidy programme 
 
Support for tobacco leaves. 
 
2. Period covered by the notification 
 
Crop years 2008/2009-2010/2011. 
 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 regulations:  
 
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 quan tity multiplied by the price difference between the 
purchase price and the external reference price wh ich is based on the average of prices from 1990 
to 1992. 
 6. Amount of the subsidy 
 
NT$ 234.7 million, NT$ 223.3 million and NT$ 218.0 million for the crop years 2008/2009, 
2009/2010 and 2010/ 2011, respectively.  
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 2009 1,928 16,152 14,224 0.1 
2010 1,753 13,749 12,100 104 
2011 1,737 13,625 11,888 0.0 
 
E. SUPPORT FOR SUGAR 
1. Title of the subsidy programme 
 
Support for sugar. 
 
2. Period covered by the notification 
 
Crop years 2011-2012. 
 G/SCM/N/253/TPKM 
 
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  3. Policy objective and/or purpose 
 
The purpose of the programme is to develop the su gar industry in cooperation with the farmers. 
 
4. Background and responsible authorities 
 
(a) Laws and regulations: 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 sugarc ane 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 se t after taking the domestic selling price and the 
marketing 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 premiums for sugarcane farms,  fees for pest and disease control, inspection 
fees for sugar brix, and others. 
 6. Amount of the subsidy 
 
NT$ 32.4 million and NT$ 31.7 million for the fiscal years 2011 and 2012, respectively. 
 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 
Raw Sugar 2011 48.4 562.0 527.1 0 
2012 45.3 578.6 549.9 0 
 
F. INTEREST SUBSIDY 
1. Title of the subsidy programme 
 
The policy-oriented special agricultural loan.  
2. Period covered by the notification 
 
2009-2011. 
 
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 smoothly. This plan was devised to help them update their equipment, improve developmental skills and i nnovation, increase the added-value of their 
products, strengthen product sales, and enhance their competitiveness. In addition, the plan helps 
farmers who are affected by natural disasters to rebuild their homes and their livelihoods, thus 
allowing them to maintain their standard of living. G/SCM/N/253/TPKM 
 
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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 capita l is provided by credit departments of farmers' 
associations and fishermen's associations or the Agricultural Bank. The source of finance for the interest subsidy is the Agricultural Development Fund. 
 
6. To whom and how assistance is provided 
 
(a) These preferential interest rate loans ar e 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$ 2,803.1 million, NT$ 3,048 million and 
NT$ 3,229.1 million for the fiscal years 2009, 2010 and 2011, respectively. 
 8. Duration 
 
The duration of the subsidy is not clearly specified. 
 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 2009, 2010 and 2011 
 
 Unit: NT$ 1,000 
Name of Project 2009 2010 2011 
Loans to expand the family farm; to support land 
purchases by farmers 122,073 142,441 158,204 
Loans for farm machinery 145,777 141,043 125,147 
Loans for natural agricultural disasters 63,666 153,075 152,581 
Loans for accelerating rural construction 2,471,602 2,611,412 2,793,131 
Total 2,803,118 3,047,971 3,229,063 
 
Note: Loans for accelerating rural construction include such items as:  
 
1. Loans in the agricultural food industry  to provide guidance and assistance 
to management.  G/SCM/N/253/TPKM 
 
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  2. Loans in the livestock and poultry industry to improve management 
efficiency.  
3. Loans to farmers to provide guidance, assistance and management 
improvement.  
4. Preferential loans extended to those businesses that move into the 
agricultural technology park.  
5. Loans for agriculture production and marketing groups.  
II. FISHERIES 
A. FISHING VESSELS BUY-BACK PROGRAMME 
1. Title of the programme 
 
Fishing Vessels Buy-back Program. 
 2. Period covered by the notification 
 2011-2012.  
3. Policy objective and/or purpose  
 
Due to severe overfishing worldwide, the United 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 regulations:  
 
Regulations for the Fishing Vessels Buy-back Procedures (2011-2012)  
 (b) Authorities: Fisheries Agency, Council of Agriculture.  
 
5. Form 
 
Grant. 
 
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 of deep-sea and inshore  
fisheries, calculated and accumulated in 2011-2012: 
 
- 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.  G/SCM/N/253/TPKM 
 
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  7. Amount 
 
Funds spent on buying back fishing vessels and rafts in 2011 totalled NT $66.546million; funds 
spent in 2012 totalled NT $ 86.750 million.  
 
8. Duration 
 
The duration 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 
 2011-2012. 
 
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 regulations: Regulations for the Voluntary Closing Fishery in 2011.   
(b) Authorities: Fisheries Agency, Council of Agriculture.  
 
5. Form 
 Grant.  
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$17 1.842 million in 2011 and NT$173.459 million 
in 2012.  
8. Duration 
 
The duration 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.  G/SCM/N/253/TPKM 
 
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  2. Period covered by the notification 
 
2011-2012.  
3. Policy objective and/or purpose 
 
Insure fishing vessels against marine disasters. 
 
4. Background and responsible authorities 
 
(a) Laws and regulations:  
 
Regulations for the Insurance Reward for Owners of Fishing Vessels.   
(b) Authorities: 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$82.806 million for 2011 and NT$45.419 million in 2012.  
 
8. Duration 
 
On-going since 1987. 
 9. Trade effects or related statistical data  
 N/A.  III. INDUSTRY 
A. LOANS - LOANS FOR SMALL AND MEDIUM-SIZED ENTERPRISES (SMES) 
1. Specific and urgent financing and loans in tended 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 
 
2010-2011. 
 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 purchase of new automated equipment. 
 G/SCM/N/253/TPKM 
 
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  4. Background and responsible authorities 
 
(a) Laws and regulations:  
 
Statute for Development of Small and Medium-Sized Enterprises (Articles 9, 15, 17 
and 18).  
Procedures 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) Authorities: Ministry of Economic Affairs.  
 
Note: The cumulative amount reached by the end of fiscal year 2012 for the SME Development 
Fund was NT$ 6.29 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 Smal l and Medium-Sized Enterprise" published by the 
Ministry of Economic Affairs, an SME is a co mpany or commercial enterprise registered in 
accordance with the law with capital or operating revenue below the following 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 livestock, 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 Fund. The ceiling interest rate is 1% plus a flat rate of the 2-year postal fixed savings rate.  
 
7. Amount 
 
Statistics for Specific Programmes: 
 
Loaned by the SME Development Fund 
   Unit: NT$ million.  
Title of Programme
 2010-2011  
Urgent financing for major natural disasters  39.7 
 
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. 
 G/SCM/N/253/TPKM 
 
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  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 
 2010-2011.  
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 regulations:  
Statute for Development of Small and Medium-Sized Enterprises (Articles 9, 15, 
and 16).  
Procedures 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 Development Fund.  
 
7. Amount 
 
Loaned by the SME Development Fund.  
FY 2010-2011: NT$ 0.55 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.  
 G/SCM/N/253/TPKM 
 
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  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 
 2011-2012.  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 Pa ragraph 1 of Article 21 of the Statute 
for Upgrading Industries were superseded by Article 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 no t 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 expi ration of the Industrial Innovation Act.  
 
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.  
 G/SCM/N/253/TPKM 
 
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  (b) Related statistical data:  
 
Total amount of loans granted in 2011 
 
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 592 67.99 
 
Total amount of loans granted in 2012 
 
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 421 50.81 
 
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 2011-2012. 
 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 deve lopment of advanced technology. The "Science-
Based Industrial Park"(the Park) has been establis hed by introducing sophisticated industries and 
personnel with advanced technological backgrounds into a designated zone.   4. Background and responsible authorities 
  (a) Law and regulation:   
 Statute for the Establishment and Administration of a Science-Based Industrial 
Park (Article 20); 
 Implementing Regulations of Statute for the Establishment and Administration of a 
Science-Based Industrial Park (Article 17).  
  (b) Authorities:  The Park is managed by the Science Park Administration;       The policy-making body is the National Science Council.  
 
5. Form 
 
The subsidy programme will be implemented in  the form of duties and tax exemptions.  
 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 tax benefits, which are not yet terminated nor fully offset, originally enjoyed by the 
dissolving science-based industry before me rgers. As for succeeding to the exemption G/SCM/N/253/TPKM 
 
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  of profit-seeking income tax as investment incentives from the dissolving Park 
entities, 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 pr ovided 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 
tax 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:  
 
(i) Customs duties, commodity tax, and business tax on imported machinery and 
equipment, raw materials, commodities, fuel, and semi-finished products, and 
 
(ii) Commodity tax and business tax on exported goods or labour services.  
 
Note 1: "Park enterprise" refers to a science-bas ed industry and to an enterprise approved and 
established in the Park that is able to provide 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 de velopment activities, does not engage in mass 
production and has been approved by the Park Admini stration. It will stay in the Park for a period 
of not more than three years.  
 Note 2: According to paragraph 1, Section 2, Ar ticle 3 of the Commodity Tax Statute and Article 7 
of the Value-added and Non Value-added Law, expo rts can be exempted from commodity tax, and 
exported goods can be granted a business tax rate of zero. These tax treatments are not specific 
to enterprises located in the Park, as they are ge nerally available for exported goods, regardless of 
whether or not the manufacturers are located in the Park.  
 
7. Amount 
 
2011-2012 Business Tax Exemption for all Imports 
 Unit: NT$ million 
Year Total Import Value Total Amount of Business 
Tax Exemption 
2011 767,505 38,375 
2012 726,988 36,349 
 
8. Duration 
 
There is no time limit attached to the programme.  
 9. Trade effects or related statistical data 
 
 Unit: NT$ million 
Year 2011 2012 
Number of approved park enterprises 
(accumulated numbers) 724 750 
Total import value 767,505 726,988 
Total export value 1,146,735 1,248,020 
 
In light of the scope and nature of these programmes, it is not yet possible to determine what, if 
any, trade effects may result. G/SCM/N/253/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 2011-2012.  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 regulations: 
  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 Export 
Processing Zones.  
  Categories of Industries 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 en terprises 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 include 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.  
 
It should be noted that within five years of importation, all machinery and equipment are not entitled to duty and tax exemptions when shipped to leviable areas from Export Processing Zones. 
Moreover, products manufactured by in-zone en terprises shall be subject to customs duties, 
commodity taxes and business taxes when they ar e shipped to leviable areas. While customs 
duties would be applied on the basis of ex-fac tory prices minus value-added resulting from G/SCM/N/253/TPKM 
 
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  manufacturing or processing activities in the EPZs, other taxes would be based on the ex-factory 
price.   7. Amount 
 
2011-2012 Business Tax Exemption for all Imports 
 
 Unit: US$ thousand 
Year Total Import Value Total Amount of Business 
Tax Exemption 
2011 9,141,369 457,068 
2012 9,062,602 453,130 
 
8. Duration 
 
There is no time limit attached to the programme.   
9. Trade effects or related statistical data 
 
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 MOUNTAIN AREAS AND OFFSHORE ISLAND AREAS 
1. Title of the programme 
 
Subsidies for the establishment and operation costs of petroleum facilities, and products 
consumption costs in the mountain areas and offshore island areas.  
 2. Period covered by notification 
  (1) 2011-2012 for facility costs.  
 (2) 2011-2012 for household liquefied petroleum gas (LPG) costs. 
 3. Policy objective 
 
 (1) To encourage facility operators to maintain product supplies in such areas. 
 
(2) To reduce the pricing level differences between cities and such areas. 
 
4. Background and responsible authorities 
 
 (1) Laws and regulations: Petroleum Administration Act and its related regulations.  
  (2) Responsible authorities: Bureau of Energy, Ministry of Economic Affairs.   
5. Form 
 
Grant. 
 
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 mountain and offshore 
island areas. 
 (b) Subsidy for maintenance costs of petroleum facilities in mountain and offshore 
island areas. G/SCM/N/253/TPKM 
 
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(c) Subsidy to offset the cost of shipping petroleum or LPG to mountain and 
offshore island areas. 
 
(d) Subsidy for extra personnel costs in the operation of petroleum facilities in 
mountain or offshore island areas. 
 
(2) Subsidy to diminish the price difference of household LPG between mountain areas 
and urban or/and suburban areas. 
 7. Amount for the past two years 
 Statistics for specific subsidies: 
  Unit: NT$ thousand 
Title of Subsidy 2011 2012 
Subsidy for the establishment of petroleum 
facilities in mountain an d offshore island areas 5,684 13,321 
Subsidy for maintenanc e costs of petroleum 
facilities in mountain an d offshore island areas 6,243 7,190 
Subsidy to offset the cost of shipping 
petroleum or LPG to mo untain and offshore 
island areas 173,396 159,128 
Subsidy for extra personnel costs in the 
operation of petroleum facilities in mountain or offshore island areas 33,789 25,970 
Subsidy to diminish th e price difference of 
household LPG between the mountain areas and urban or/and suburban areas 12,884 27,998 
Total 231,996 233,607 
 
8. Duration 
 
(1) The Programme was initiated in 2002, but the household LPG subsidy in mountain 
areas started on 19 August 2010. 
 
(2) Not subject to any fixed deadline date.  
 
9 Trade effects or related statistical data 
 
The Programme 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 possible to 
determine what, if any, trade effects may eventually result from this programme.  
 IV. RESEARCH AND DEVELOPMENT 
A. FUNDS GRANTED FOR DEVELOPMENT OF NEW LEADING INDUSTRIES 
1. Title of the programme 
 
 (a) Grants for development of new leading industries.  
(b) Project for subsidizing development of major market-comprehensive products. 
 2. Period covered by the notification 
 2011 and 2012.  
3. Policy objective and/or purpose 
 
In order to encourage research 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 G/SCM/N/253/TPKM 
 
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  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.  4. Background and responsible authorities 
  (a) Laws and regulations:   
 Measures for Assistance in the Development of New Leading Products were 
promulgated on 26 April 1991 and were superseded by the Subsidy and Assistance Regulations for Promoting Industry Innovation by the Ministry of Economic Affairs on 15 November 2010. 
 
 (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 relating 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 in curred exclusively for the development of 
new leading products:  
 
1. Costs incurred for full-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.  
5. Travel fees related to the project. 
7. Amount 
 
(a) Since the programme's inception, the cumulative amount of grants stands at NT$ 
16,147,396,854 at the end of fiscal year 2012 (fiscal years 1992-2012). 
 
(b) For the fiscal year 2011: the amount of grants was NT$1,215,856,000. A breakdown 
of the products involved is shown below:  
 Unit: NT$ thousand 
Name of Project (or Sector) Grant Amount 
Grants for development of new leading industries 627,930 
Project for subsidizing development of major 
market-comprehensive products 587,926 
Total 1,215,856 
 G/SCM/N/253/TPKM 
 
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  (c) For the fiscal year 2012: the amount of grants was NT$ 373,111,000. 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 286,611 
Project for subsidizing development of major 
market-comprehensive products 86,500 
Total 373,111 
 
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 INDUSTRIAL TECHNOLOGY  
1. Title of the programme 
 
Technology Development Programme for Enterprises. 
 
2. Period covered by the notification 
 
2011-2012. 
 
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 regulations:  
 
Regulations of Subsidization for Encouraging Enterprises R & D Activities were promulgated on 27 November 2002 and were superseded by the Subsidy and 
Assistance Regulations for Promoting Industry  Innovation by the Ministry of Economic 
Affairs on 15 November 2010.  
 
 (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. The planning or development of industrial technologies that may be aptly 
characterized as vital, innovative or integrative.  G/SCM/N/253/TPKM 
 
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  2. Development of innovative or integrative manufacturing technology by small 
and medium-sized businesses.  
3. Development of innovative IT application systems.  4. Development of innovative business models by strategic services-oriented 
research.  
5. Cooperate with major national technolo gy-related policies and creation of an 
environment conducive to the developmen t of technology and industry within 
civilian business enterprises. 
 
(b) The assistance funds to be granted shall not exceed 50% of the total amount of the 
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 and overseas travel expenses. 
 
7. Amount 
 The total amount of grants in the fiscal year 2011-2012 was NT$ 6,084,196,000.  
 
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.   
C. FUND GRANTED FOR ENCOURAGING EXPLOR ATION AND DEVELOPMENT OF OIL AND 
NATURAL GAS RESERVES 
1. Title of the programme 
 
Fund Granted for Encouraging Exploration and Development of Oil and Natural Gas Reserves.  
2. Period covered by notification 
 
2011-2012.  
3. Policy objective and/or purpose 
 
The policy objectives of the programme are to secure oil supply and stabilize the domestic oil 
market. 
 4. Background and responsible authorities 
  (a) Laws and regulations: Petroleum Administration Act.    (b) Responsible authorities: 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.  G/SCM/N/253/TPKM 
 
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  The grant is used only in support of the following activities: 
 
(1) The implementation of geological, geop hysical, and/or geochemical 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.   
7. Amount 
 
  Unit: NT$ thousand 
Year 2007 2008 2009 2010 2011 2012 
Total 150,510 212,250 294,125 308,751 398,648 251,542 
 
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 this subsidy, it is not yet possible to determine what, if any, trade effects may eventually result from this programme. 
 
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