G/SCM/N/315/JOR/ Suppl .1 
G/SCM/N/299/JOR/Rev.2  
24 July 2018 
(18-4687) 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  
FINAL TRANSPARENCY N OTIFICATION (FOR 2015) PURSUANT TO THE PROCEDURES  
IN THE GENERAL COUNC IL DECISION IN DOCUM ENT WT/L/691 ON THE  
EXTENSIONS UNDER SCM  ARTICLE 27.4 OF THE TRANSITION PERIOD  
FOR THE ELIMINATION OF EXPORT SUBSIDIES  
JORDAN  
The following communication, dated 23 July 2018, 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, on 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 Agreemen t for certain developing countries 
(document/L/691), and 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 p eriod for the elimination of export subsidies of Jordan document 
G/C/W/705/Rev.2.  
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 20 17. 
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 int roduced then to stimulate export performance. The remarkable increase in oil prices in the 
year 2008 and its persistent fluctuations afterward has affected depressingly Jordan's exports. 
Together with the negative consequences of the global financial crisi s. 
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 those regional circumstances together with the displacement of many residents of G/SCM/N/315/JOR/ Suppl .1 • G/SCM/N/299/JOR/Rev.2  
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  those neighbouring  in the Kingdom since the year 2010 up to now. Jordan hosted severa l influxes 
of refugees from neighbouring  countries, mainly from Iraq and Syria, which had a negative impact 
on the national budget and infrastructure. With Syrian citizens residing in the country exceeding 
1.4 million, including refugees. This burden strai ned the infrastructure, education, health, water, 
food and other sectors. Syrian labor force is also pushing into the job market traditionally reserved 
to Jordanians and thus reduces job opportunities for locals.  
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 in 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 due to the loss of 
traditional markets for Jordanian exports mainly Syria and Iraq as well as of 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% 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 Income Tax Law No. 34 for the year 2014 amending Income 
Tax Law No. 28 for the year 2009  ,which included the following article relating to the subsidy 
programme.  
Article 4(e) of the law, which deals with the exemption from income tax an d 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 an d 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 additi on to domestic 
exporting companies specialized in exporting local goods and products. Exemptions are granted 
through submitting official documents to the income tax department verifying export activities.  G/SCM/N/315/JOR/ Suppl .1 • G/SCM/N/299/JOR/Rev.2  
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  b. Amount  
The amount of exemption is determined acc ording 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 t he 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  
Trade effects  
In the year 2017, the value of exports entitled for exemption was US$ 3,765,378,043 while the 
approximat e calculated value of exemption amounted for US$  67,776,805. These figures 
demonstrate how exporters are extremely under enormous pressure to cope with the burden 
resulting from losing largest export markets in the region. The total amount of exemption imp lies 
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 introd uced 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 the 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$ 
2016 6.2 4,737,484,249  71, 062,264  
2015 7 b 6,316,243,360  93,409,232  
2014 8.3 b 4,855,876,052  87,405,768  
 G/SCM/N/315/JOR/ Suppl .1 • G/SCM/N/299/JOR/Rev.2  
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  TABLE 1  
Income Tax Relief Classified by HS Chapters in US$ for the year 2016  
 
Total exports value: US$ 6.3b  
Total exports value benefiting from this programme : US$ 3,765,378,043  
Income tax relief: US$ 67,776,805  
 
Income tax relief $  EXPORT VALUE $  Chapters  
912,109  50,672,736  17-19 
3,934,413  218,578,483  21-24 
18,154,745  1,008,596,954  26-30 
4,102,801  227,933,386  32-38 
2,771,281  153,960,057  39-40 
56,871  3,159,489  41-43 
58,655  3,258,584  44-46 
2,558,752  142,152,870  47-49 
19,697,938  1,094,329,874  51-63 
22,226  1,234,789  64-65 
777,120  43,173,309  68-70 
3,310,464  183,914,686  71 
4,124,357  229,130,946  72-83 
5,085,925  282,551,410  84-85 
126,197  7,010,931  87-88 
206,282  11,460,087  90-92 
1,781,442  98,969,021  94-96 
95,228  5,290,431  97-99 
67,776,805  3,765,378,043  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 d ocument G/C/W/705/Rev.2 , 
and in light of Jordan 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. Based on  the action plan and time -frame for implementing a new subsidy program 
submitted in the last meeting of the Council for Trade in Goods held in November 10th, 
2015,  there has been an intensive work to replace the current export subsidy program 
with a new one in compliance with the WTO rules.  
2. 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 implementation of 
the action plan within the estimated time - frame, and to develop necessary technical and 
legal frameworks for the alternative subsidy program in cooperate with a broad group of 
stakeholders.  
3. A number of altern ative programs were provided with the technical assistance of the 
USAID 's, and are carefully considered to choose the best alternative one.  
4. A Legal and economic Experts have been assigned  to support the implementation of the 
Project. The first visit for th e expert was during the week 18 – 23 December 2015 G/SCM/N/315/JOR/ Suppl .1 • G/SCM/N/299/JOR/Rev.2  
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  represented the start of the USAID/JCP WTO Subsidies Project, the Second visit was 
on 23-27/4/2016 and the third was on  5-6/4/2017.  
5. The national committee had held two meetings on 17/1/2016 and 4/6/2017, o n which 
analysis of alternative subsidy program were examined thoroughly and approved by the 
committee.  
6. The new WTO Compliant program "A 70% Partial Exemption on Industrial Net Income ", 
has been agreed by the Council of Ministers and is currently in the le gislative process to 
incorporate it into the Income Tax law in line with the timetable for implementing a new 
program as contained in document number G/C/W/705/Rev.2 submitted by Jordan to the 
Council for Trade in Goods.  The new program doesn 't have any li nkage to export activity in 
compliance with the agreement on subsidies and countervailing measures and will be 
implemented as of 1 January  2019.  
7. Income Tax Law No.34 for the year 2014 had stated explicitly in Article  (3) (a) (4) that:  
(a) Any Income incur red in or from the Kingdom for any person regardless of  the place of 
fulfilment shall be subject to tax including the  following income:  
(4) Income from selling goods whether sold in the  Kingdom or exported from it.  
8. As for the legislative stage , Jordan is currently working on issuing a new income tax law in 
a view to attain whole compatibility with elements of the SCM Agreement  
9. Jordan  current export subsidy program will be terminated by 31/12/2018 in line with 
Jordan action plan (G/C/W/705/Rev.2.) . Article  (3) of Regulation no (106) for the year 
2016 dealing with the "Exemption of Profits of Goods and Services' Exports from Income 
Tax" has stated that income resulting from exporting goods of local origin outside the 
Kingdom is totally exempted from  income tax until only 31/12/2018.  
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