G/SCM/N/299/JOR  
 
5 July 2016  
(16-3619)  Page: 1/5  
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES 
FINAL TRANSPARENCY NOTIFICATION (FOR  2015) PURSUANT TO THE PROCEDURES 
IN THE GENERAL COUNCIL DECISION IN DOCUMENT 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 30 June 2016, 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 Agreement 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 period 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 2015. 
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 performanc e. The remarkable increase in oil prices in the 
year 2008 and its persistent fluctuations afterw ard 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 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 
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 residing in the country exceeding 
1.4 million, including refugees. This burden strained the infrastructure, education, health, water, G/SCM/N/299/JOR 
 
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  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 th at 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 ener gy 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 as ha s been shown in the decrease of Jordan exports 
in the year 2015 due to the loss of traditional mark ets 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, exemptin g 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 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 exemptio n 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 submitting official docume nts to the income tax department verifying 
export activities. G/SCM/N/299/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, import s and exports of the subsidized product(s) 
or Sector 
Trade effects 
In the year 2015, the value of exports entitl ed for exemption was US$6,316,243,360 while the 
approximate calculated value of exemption amounted for US$93,409,232. This slightly meager difference than the year 2014 indicates that the programme is still barely supporting beneficiaries' 
efforts to keep in consistency with their level of exports. As a matter of fact the total amount of 
exemption implies that the income tax relief still has a very slight effect on Jordan's international trade, realizing that Jordan is a developing count ry with a share not greater than 0.10% of world's 
export trade, it is clear that no harmful effects have been introduced on the international trade as 
a result of the subsidy programme. 
a. For the three most recent years for which statistics are available; 
b. For a previous representative year, which, where possible and meaningful, should be the 
latest year preceding the introduction of th e subsidy or preceding the last major change 
in the subsidy. 
Income Tax 
Relief in US$ Total Exports 
Value in US$  Total Exports Value benefiting 
from this programme in US$  Income Tax 
Relief in US$ 
2014 8.3 b 4,855,876,052 87,405,768 
2013 8 b 6,822,142,342 98,238,849 
2012 8 b 5,747,104,205 86,206,563 
 
 G/SCM/N/299/JOR 
 
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  TABLE 1 
INCOME TAX RELIEF CLASSIFIED BY HS CHAPTERS IN US$ FOR THE YEAR 2015 
Total exports value : US$ 7 b 
Total exports value benefiting from this programme : US$ 6,316,243,360 
Income tax relief : US$ 93,409,232 
 
Income tax relief $ Export Value $ Chapters 
 800,692.65   54,142,074   17-19  
 4,094,492.77   276,865,701   21-24  
 13,868,242.25   937,757,333   26-30  
 4,373,675.94   295,743,801   32-38  
 3,466,569.32   234,406,116   39-40  
 354,346.75   23,960,590   41-43  
 201,266.79   13,609,469   44-46  
 3,686,988.78   249,310,670   47-49  
 21,829,738.44   1,476,106,123   50-63  
 35,489.35   2,399,756   64-66  
 400,237.92   27,063,707   68-70  
 2,259,740.47   152,801,499   71  
 6,572,265.80   444,410,354   72-83  
 28,541,569.69   1,929,953,760   84-85  
 610,639.65   41,290,871   86-89  
 486,946.25   32,926,841   90-92  
 1,784,570.09   120,670,930   94-96  
 41,759.89   2,823,764   97-99  
 93,409,232.79   6,316,243,360   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 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 on 10 November 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. The national committee started its tasks on 1 January 2016. 
4. A number of alternative programs were provided with the technical assistance of 
the USAID's, and are carefully considered to choose the best alternative one. G/SCM/N/299/JOR 
 
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  5. A legal and economic experts have been assi gned to support the implementation of the 
Project. The first visit for the experts was held on 18-23/12/2015, the second visit was on 23-27/4/2016. 
6. To this end, the rigorous analysis of different replacement schemes will be started 
immediately upon completing data collection process, which was started in January 
this year. 
7. A new Income Tax law was issued, which is, Income Tax Law No. 34 for the year 2014 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 
fulfilment shall be subject to tax including the  following income: 
(4) Income from selling goods whether sold in the  Kingdom or exported from it. 
 
 
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