G/SCM/N/253/EU/Add.3  
 
29 July 2013  
(13-4040)  Page: 1/9  
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 
EUROPEAN UNION 
Addendum 
The following addendum to the notification of the European Union relates to subsidy programmes 
of Bulgaria . 
_______________ 
 G/SCM/N/253/EU/Add.3 
 
- 2 - 
 
  BULGARIA  
 
TABLE OF CONTENTS1 
 
1   INNOVATION FUNDING ............................................................................................... 3  
2   ASSISTANCE TO ECONOMIC DEVELO PMENT AND STRUCTURAL ADJUSTMENT ............. 4  
2.1   Support to regi onal development ................................................................................. 4  
2.2   SUPPORT TO REGI ONAL DEVELOPMENT ........................................................................ 5  
2.3   Support to enviro nmental protection ............................................................................ 6  
3   OPERATIONAL PROGRAMME "DEVELOPMENT OF THE COMPETITIVENESS OF 
THE BULGARIAN ECON OMY 2007- 2013" .......................................................................... 7  
4   FILM INDUSTRY SUPPORT ........................................................................................... 8  
 
 
                                               
1 The processing of the data on a couple of sche mes is still on-going and therefore the information 
provided therein is not finalised yet. G/SCM/N/253/EU/Add.3 
 
- 3 - 
 
  1  INNOVATION FUNDING 
1. Title of the subsidy programme 
 
Scheme for support of innovative undertaki ngs through the National Innovation Fund. 
 
2. Period covered by the notification 
 
2011; 2012. 
 3. Policy objective and/or purpose of the subsidy 
 
The above scheme provides support for research and development activities of the enterprises 
working in collaboration with research organizations.  
4. Background and authority for the subsidy (incl. identification of the legislation under which it 
is granted) 
 
- Council of Ministers' Decision No. 723 of 8 September 2004 for Adoption of Innovation 
Strategy of the Republic of Bulgaria and Me asures for its Implementation, as amended by 
Council of Ministers' Decision No. 385 of 22 May 2006; 
 
- Council of Ministers' Decree No. 15 of 31 January 2005 for Providing Funds from 2005 State 
Budget to the Ministry of Economy for the establishment of National Innovation Fund (NIF); 
 
- NIF Management Rules and Guidance on Application for Funding of Innovative Enterprises, 
approved by Order No. RD-16-82/2005, Or der No. RD-16-464/2005 and Order No. RD-16-
1402/2006, issued by the Minister of Economy (with amendments). 
 Authority responsible for the grant: Small and Medium Enterprises Promotion Agency at the Ministry of Economy, Energy and Tourism. 
 
5. Form of the subsidy 
 
Grant. 
 6. To whom and how the subsidy is provided 
 The grant is provided to innovative enterprises from all sectors and regions, research institutes, organizations and universities for support of research activities.  
7. Subsidy per unit or in case where it is not possible, the total amount or the annual budgeted 
for that subsidy 
 In 2011 - payments effectuated at the amount of BGN 2.95 mln. 
In 2012 - payments effectuated in 2012 at the amount of BGN 3.21 mln.  
8. Duration of a subsidy and/or any other time limits attached to it 
 
2009 - 2013.  
9. Statistical data permitting an assessment of the trade effects of the subsidy 
 
As the support is granted to a various enterprises and organizations, therefore it is not possible to 
present statistical data permitting an assessment of trade effects. 
 G/SCM/N/253/EU/Add.3 
 
- 4 - 
 
  2  ASSISTANCE TO ECONOMIC DEVELOPMENT AND STRUCTURAL ADJUSTMENT 
2.1  Support to regional development 1. Title of the subsidy programme 
 
Scheme for tax relief constituting regional aid, subject to fulfillment of the conditions under 
Art. 184 (linked to Art. 189) of the Corporate Income Taxation Act.  
2. Period covered by the notification 
 
2011; 2012.  
3. Policy objective and/or purpose of the subsidy 
 
Regional aid for initial investment and job creation linked to the investment. 
 
4. Background and authority for the subsidy (incl. identification of the legislation under which it 
is granted) 
 Corporate Income Taxation Act, promulgated, State Gazette (SG) No. 105 of 22 December 2006, as last amended and supplemented, SG No. 23 of 8 March 2013.  
In accordance with Article 189 of the Corporate Income Taxation Act (CITA) the taxable persons 
must fulfill specified conditions in order to receive a regional aid related to the initial investment in municipalities with rate of unemployment for the year of retention 35% or higher than the national 
average for the same period. 
 Authority responsible for the subsidy: National Revenue Agency at the Ministry of Finance. 
 
5. Form of the subsidy 
 Tax relief. 
 
6. To whom and how the subsidy is provided 
 
Any taxable person fulfilling the conditions specified under Article 184 (linked to Art. 189) of CITA 
can retain corporate tax and must invest it in material and immaterial assets as a part of his initial investment. The initial investment must be made in municipalities where the rate of 
unemployment for the year of retention is by 35 % or higher than the national average for the 
same period. The activity related to the initial investment must continue to be implemented in the respective municipality for at least 5 years after the year of completion of the initial investment and this circumstance is to be declared annually by the annual tax returns until the lapse of the 
five-year period. At least 25% of the value of the material and immaterial assets forming part of 
the initial investment must be self-financed or debt-financed by the taxable person; etc.  
7. Subsidy per unit or in case where it is not possible, the total amount or the annual budgeted 
for that subsidy 
 In 2011 - BGN 15.17 mln. 
 In 2012 - information is not available by the time of notification submission due to the unfinished 
processing of tax declarations for 2012. 
 
8. Duration of a subsidy and/or any other time limits attached to it 
 
1 July 2007 – 31 December 2013. 
 9.  Statistical data permitting an assessment of the trade effects of the subsidy 
 Trade effects are assessed as minimal.  G/SCM/N/253/EU/Add.3 
 
- 5 - 
 
  2.2  SUPPORT TO REGIONAL DEVELOPMENT 
1. Title of the subsidy programme 
 
Investment promotion with regional aid for investment and job creation under the Investment 
Promotion Act. 
 2.  Period covered by the notification 
 2011; 2012.  3.  Policy objective and/or purpose of the subsidy 
 The measure consists of Regional aid for initial investment and jobs creation linked to the investment. Investment promotion under the scheme aims to  increase the investment for 
technological development of high-value-added manuf acturing and services, and creation of highly 
productive jobs; decrease of regional disparities in the social and economic development.  
4.  Background and authority for the subsidy (incl. identification of the legislation under which it 
is granted) 
 
- Investment Promotion Act – promulgated, State Gazette (SG) No. 97 of 24 October 1997, as 
last amended and supplemented, SG No. 82 of 26 October 2012; 
- Rules for Implementation of the Investment Promotion Act – promulgated, SG No. 76 of 
21 September 2007; 
- Council of Ministers' Decision 1048/2012. 
 Authority responsible for the subsidy: Minist ry of Economy, Energy and Tourism.   
 
5. Form of the subsidy 
 Subsidy, other. 
 
6.  To whom and how the subsidy is provided 
 
The beneficiaries are SMEs and big companies. The subsidy covers the implementation and 
maintaining of investment projects of national  importance. Projects must meet the minimum 
r e q u i r e m e n t s  a s  t o  t h e  a m o u n t  o f  i n v e s t m e n t  a n d  e m p l o y m e n t  t o  b e  c r e a t e d ,  a s  s t a t e d  i n  t h e  
Rules for Implementation of the Investment Promotion Act.  
 Priority Investment Projects under the measure can be promoted with the  provision of grants:  
 
- up to 50% of the cost for investments in education and scientific research; 
- up to 10% of the cost for investments in the processing industry. 
 
7. Subsidy per unit or in case where it is not possible, the total amount or the annual budgeted 
for that subsidy 
 In 2011 - no payment. 
In 2012 - BGN 1 mln.   8. Duration of a subsidy and/or any other time limits attached to it 
 1 May 2009 – 31 December 2013.  
9. Statistical data permitting an assessment of the trade effects of the subsidy 
 
Trade effects are assessed as minimal. 
 
 G/SCM/N/253/EU/Add.3 
 
- 6 - 
 
  2.3  Support to environmental protection 
1.  Title of the subsidy 
 
Scheme for tax reduction for biofuels . 
 
2. Period covered by the notification 
 
2011; in 2012 the measure has expired. 
 3. Policy objective and/or purpose of the subsidy 
 
A reduced excise duty for biofuel blends containing 4-5% biofuel is an effective way to preserve 
the environment, to stimulate the use of biofuel in  order to diversify the energy resources, and to 
achieve a sustainable development of rural regi ons, supplementary income and new employment 
in the agricultural sector. 
 4. Background and authority for the subsidy (incl. identification of the legislation under which it 
is granted) 
 
- Excises and Tax Warehouses Act - promulgated, State Gazette (SG) No. 91 of 
15 November 2005, as last amended and supplemented, SG No. 94 of 30 November 2012; 
- Renewable and Alternative Energy Sources an d Biofuel Act – promulgated, SG No. 49 of 
19 June 2007, as amended and supplemented; repealed, SG No. 35 of 3 May 2011; 
- Ambient Air Quality Act – promulgated, SG No. 45 of 28 May 1996, as last amended and 
supplemented, SG No. 102 of 21 December 2012; 
- Ordinance for the Requirements of Liquid Oils' Quality, Conditions, Order and Manner of 
Control, promulgated, SG No. 69/2005, adopted with the Council of Ministers' Decree No. 
156 of 15 July 2003, as amended and supplemented; 
- National long-term Programme for 2008-2020 for Encouraging the Consumption of Biofuel in 
the Transport Sector, adopted with the Council of Ministers' Decision of 15 November 2007. 
 
Authorities responsible for the subsidy: Customs Agency and Ministry of Finance.  
5. Form of the subsidy 
 
Tax relief – reductions of excise rates for biofuel. 
 
6. To whom and how the subsidy is provided 
 The subsidy is provided to all producers and impo rters, traders and consumers of biofuel, supplied 
to the market for transport purposes. 
 7. Subsidy per unit, or in case where it is not possible, the total amount or the annual 
budgeted for that subsidy 
 In 2011 – tax relief was at the amount of BGN 4.37 mln. 
In 2012 - no aid granted. 
 8. Duration of a subsidy and/or any other time limits attached to it 
 
23 November 2009 – 23 November 2011. 
 9.  Statistical data permitting an assessment of the trade effects of the subsidy 
 Trade effects are assessed as minimal.  G/SCM/N/253/EU/Add.3 
 
- 7 - 
 
  3  OPERATIONAL PROGRAMME "DEVELOPMENT OF THE COMPETITIVENESS OF THE 
BULGARIAN ECONOMY 2007-2013" 
1. Title of the subsidy programme 
 
Priority axis 2 Increasing Efficiency of Enterprises and Promoting Supportive Business 
Environment, and the following schemes: "Tec hnological modernization of enterprises" (case 
XS299/2007, case X359/2010, case X262/2010) , "Upgrade of technologies in small and medium-
sized enterprises" (case X74/2008) ; "Upgrade of technologies in large enterprises" (case X 
73/2008) , "Support for implementation in the production of innovative products and services" 
(case X 75/2008) , Technical modernization of SMEs (case X216/2010) (SA 32204) . 
 
2. Period covered by the notification 
 
2011; 2012. 
 
3.  Policy objective and/or purpose of the subsidy 
 
Primary objective – technological upgrade of enterprises. 
Secondary objective – support of enterprises.  4.  Background and authority for the subsidy (incl. identification of the legislation under which it 
is granted) 
 EC legislation: 
 
- Council Regulations (EC) No. 1080/2006, No. 1081/2006, No. 1082/2006; No. 1083/2006 
(with amendments); No. 1084/2006;  
- Commission Regulations (EC) No. 1828/2006; No. 800/2008; No. 846/2009; 
 Bulgarian legislation:  
- 2011 or 2012 State Budget of the Republic of Bulgaria Act; 
- Council of Ministers' Decree No 334 of 29 December 2010 on the Implementation of the 
2011 State Budget of the Republic of Bulgaria, promulgated, State Gazette (SG) No. 2 of 
7 January 2011;  
- Council of Ministers' Decree No 367 of 29 December 2011 on the Implementation of the 
2012 State Budget of the Republic of Bulgaria , promulgated, SG No. 106 of 30 December 
2011;  
- Council of Ministers' Decree No. 121/2007 on Determining the Procedure on Grant Awarding 
under the Operational Programmes, co-financed from the Structural Funds and the Cohesion Fund, and under the PHARE Programme of the European Union; promulgated, SG 
No. 45 of 2007, as amended;  
- Council of Ministers' Ordinance No. 18 of 4 Fe bruary 2003 on Establishing a Council for the 
Co-ordination of Combating Against Irregularities Concerning the Financial Interests of the 
EU; promulgated, SG No. 13 of 11 February 2003, as amended;  
- Council of Ministers' Ordinance on Determination of Procedures for Administering of 
Irregularities Concerning Funds and Programme s, Co-financed from the EU; promulgated, 
SG No. 97 of 8 December 2009, as amended;  
- Council of Ministers' Decree No. 202 of 13 August 2009 on Establishing a Co-ordination 
Mechanism for Management of EU Funds, promulgated, SG No. 67 of 21 August 2009;  
- Small and Medium-Size Enterprises Act, promulgated, SG No 84 of 24 September1999, as 
last amended and supplemented, SG No. 82 of 16 October 2009;  
- Public Procurement Act, promulgated, SG No . 28 of 6 April 2004, as last amended and 
supplemented, SG No 82 of 26 October 2012. 
 
5.  Form of the subsidy 
 
Grant. 
 G/SCM/N/253/EU/Add.3 
 
- 8 - 
 
  6.  To whom and how the subsidy is provided 
 
Granting authority is the Ministry of Economy, En ergy and Tourism. Aid is granted to beneficiaries 
(selected after fulfillment of rules and procedure previewed under the Operational Program) from 
the manufacturing industry and activities relate d to the nanotechnology; 85% co-financing from 
the European Regional Development Fund (ERDF)  and 15 percent co-financing from the state 
budget of the Republic of Bulgaria. 
 
7.  Subsidy per unit, or in case where it is not possible, the total amount or the annual 
budgeted for that subsidy 
 
In 2011:  
 
- under case XS 299/2007 – payments effectuated at the amount of BGN 0.16 mln. co-
financing from Bulgaria; 
- under case X 73/2008 - payments effectuated at the amount of BGN 4.21 mln. co-financing 
from Bulgaria; 
- under case X 74/2008 - payments effectuated at the amount of BGN 6.91 mln. co-financing 
from Bulgaria; 
- under case X 75/2008 – - payments effectuated at the amount of BGN 0.49 mln. co-
financing from Bulgaria; 
- under the case X359/2010, case X262/2010-  no payment; 
- under case X 216/2010 – - payments effectua ted at the amount of BGN 0.16 mln. co-
financing from Bulgaria; 
- under case SA 32204- no payment. 
 In 2012: 
 
- under case XS 299/2007 – payments effectuated at the amount of BGN 0.1 mln. co-
financing from Bulgaria; 
- under case X 73/2008 - payments effectuated at the amount of BGN 5.1 mln. co-financing 
from Bulgaria; 
- under case X 74/2008 - payments effectuated at the amount of BGN 2.3 mln. co-financing 
from Bulgaria; 
- under case X 75/2008 – - payments effectuated at the amount of BGN 0.40 mln. co-
financing from Bulgaria; 
- under the case X359/2010, case X262/2010 - payments effectuated at the amount of 
BGN 2.27 mln. co-financing from Bulgaria); 
- under case X 216/2010 – - payments effectuated at the amount of BGN 7.2 mln. co-
financing from Bulgaria; 
- under case SA32204 – - payments effectuated at the amount of BGN 0.7 mln. co-financing 
from Bulgaria; 
 8. Duration of a subsidy and/or any other time limits attached to it 
 The terms are specified in the Guidance for application for granting financial aid under the Operational Program and defers for each measure.   
 
9. Statistical data permitting an assessment of the trade effects of the subsidy 
 In view of the purpose of the subsidy trade effects are assessed as minimal. 
 
4  FILM INDUSTRY SUPPORT 
1. Title of the subsidy 
 
Bulgarian film industry support.  
2.  Period covered by the notification 
 
2011; 2012.  G/SCM/N/253/EU/Add.3 
 
- 9 - 
 
  3. Policy objective and/or purpose of the subsidy 
 
The aid is aimed at supporting the development and preservation of the Bulgarian film culture. The 
main priorities are the following: assistance in the production and distribution of films of high 
artistic merit and debut film projects; ensuring th e right of public access to various forms of film-
related creative work; protection of the rights an d interests of audience; support to the new talent 
and young writers; domestic and international promotion of Bulgarian films. 
 
4.  Background and authority for the subsidy (incl. identification of the legislation under which it 
is granted) 
 
- Law on Film Industry – promulgated, State Gazette (SG) No. 105 of 2 December 2003, as 
last amended and supplemented, SG No. 82 of 26 October 2012;  
- Rules of Procedure of the National Film Centre Executive Agency ; 
- Protection and Development of Culture Act – promulgated, SG No. 50 of 1 June 1999, as last 
amended and supplemented, SG No. 102 of 21 December 2012; 
- 2011 or 2012 State Budget of the Republic of Bulgaria Act;  
- Council of Ministers' Decree No 334 of 29 December 2010 on the Implementation of the 
2011 State Budget of the Republic of Bulgaria, promulgated, State Gazette (SG) No. 2 of 
7 January 2011;  
- Council of Ministers' Decree No 367 of 29 December 2011 on the Implementation of the 
2012 State Budget of the Republic of Bulgaria, promulgated, SG No. 106 of 
30 December 2011. 
 
Granting authority is the National Film Centre Ex ecutive Agency (NFCEA). In line with the Law on 
the Film Industry, the Agency is a second-level budg etary spending unit of the Ministry of Culture. 
The transfer of funds from the budget of the Mi nistry of Culture to the NFCEA is determined 
annually under the state budget act for the respective year. 
 5. Form of the subsidy 
 
Grant. 
 6.  To whom and how the subsidy is provided 
 The beneficiaries are film production, distribution and promotion companies. Support may be provided to Bulgarian films associated with national displays and commemorations of events and 
notable historical figures, as well as debut f ilms. The aid provided under the scheme is not 
reserved exclusively for nationals and no discrimination is made with regard to nationality or the place of residence of the beneficiary.  
7.  Subsidy per unit, or in case where it is not possible, the total amount or the annual 
budgeted for that subsidy 
 In 2011 - contracts concluded at the amount of BGN 10.1 mln. 
In 2012 - contracts concluded at the amount of BGN 12.1 mln.  
8.  Duration of a subsidy and/or any other time limits attached to it 
 
1 January 2010 – 31 December 2017.  
9. Statistical data permitting an assessment of the trade effects of the subsidy 
 
It is considered that the trade effects are minimal. 
 
 
__________