G/SCM/N/315/JOR  
G/SCM/N /299/JOR/ Rev.1 
23 June 2017 
(17-3346) 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 201 5) PURSUANT TO THE P ROCEDURES  
IN THE GENERAL COUNC IL 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 22 June 2 017, 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 notif ication, 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 referenc e 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 20 16. 
3. Policy objective and/or purpose of the subsidy  
The main ra tionale 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 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 crisis.  
The nonstop regional and international proceedings taking place almos t 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 G/SCM/N/315/JOR • G/SCM/N/299/JOR/ Rev.1 
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  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 nation al budget and infrastructure. With Syrian citizens residing in the country exceeding 1.4 
million, including refugees. This burden strained 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 Jo rdan as been shown in the decrease of Jordan exports in 
the year 2016 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 circum stances. 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 thei r 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 exemption and the rate and period of the exemption shall be determined 
according to a regulation issued for this purpos e."  
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 documents to the income tax department verifying export activities.  G/SCM/N/315/JOR • G/SCM/N/299/JOR/ Rev.1 
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  b. Amount  
The amount of exemption is determined according to the imputed percentage of net profits 
resulting from export activities. The normal income tax to be pa id 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 th at 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 t he 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 an d 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 2016, the value of exports entitled for exemption was US$ 4,737,484,249 while the 
approximate calculated value of exemption amounted for US$ 71,062,264. This vast decrease 
compared  to the year 2015 demonstrate  how exporters are extremely under enormous pressure to 
cope with the burden resulting from losing  largest export markets in the region .The programme is 
still barley supporting beneficiaries ' efforts to keep in consistency with their level of exports,  
although  the volume of Jordanian exports  is decreasing considerably.  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 wit h a share no t 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  repre sentative 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$ 
2015 7 b 6,316,243,360  93,409,232  
2014 8.3 b 4,855,876,052  87,405,768  
2013 8 b 6,822,142,342  98,238,849  
 G/SCM/N/315/JOR • G/SCM/N/299/JOR/ Rev.1 
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  Table 1 : Income Tax Relief Classified by HS Chapters in US$ for the year 2016  
Total exports val ue: US$ 6.2 b  
Total exports value benefiting from this programme : US$ 4,737,484,249  
Income tax relief: US$ 71, 062,264  
 
Income tax relief  EXPORT VALUE  Chapters  
 953,583   63,572,171  17-19 
 3,877,515   258,501,003  21-24 
 19,824,605   1,321,640,357  26-30 
 3,917,559   261,170,597  32-38 
 2,973,930   198,262,029  39-40 
 87,596   5,839,706  41-43 
 125,801   8,386,763  44-46 
 2,522,968   168,197,894  47-49 
 22,077,014   1,471,800,934  50-63 
 46,462   3,097,464  64-66 
 697,490   46,499,321  68-70 
 2,507,407   167,160,450  71 
 4,395,095   293,006,333  72-83 
 5,605,464   373,697,574  84-85 
 228,936   15,262,393  86-89 
 163,229   10,881,909  90-92 
 1,027,347   68,489,800  94-96 
 30,263   2,017,550  97-99 
 71,062,264   4,737,484,249  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 progres s 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 intensi ve 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 rel ative 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 alternative 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 ass igned  to support the implementation of the 
Project. The first visit for the expert was during the week 18 – 23 December 2015 
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.  G/SCM/N/315/JOR • G/SCM/N/299/JOR/ Rev.1 
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  5. The national committee had held two meetings on 17/1/2016 and 4/6/2017, on which 
analysis of alternative subsidy program were examined thoroughly and preliminary approved 
by the committee.  
6. The new replacement programme is currently on the process o f attaining approval of the 
"Prime Ministry Council " before reported to the WTO.  
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 exp licitly 
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.  
8. Also, in line with Jordan action plan ( G/C/W/705/Rev.2. ) a regulation  no (106)  for the 
year 2016 was issued dealing with the "Exemption of Profits of Goods and  Services' Exports 
from Income Tax", on which it had set an end da te for the export program. Article (3) of the 
Regulation 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, as a step to  bring 
Jordan legislations into confor mity with WTO commitments.  
 
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