G/SCM/N/253/KNA  
G/SCM/N/260/KNA  
 
27 September 2013  
(13-5188)  Page: 1/6  
Committee on Subsidies and Countervailing Measures  Original: English  
 
 SUBSIDIES 
NEW AND FULL NOTIFICATION PURSUANT TO ARTICLE XVI:I OF 
THE GATT 1994 AND ARTICLE 25 OF THE AGREEMENT ON 
SUBSIDIES AND COUNTERVAILING MEASURES 
TRANSPARENCY NOTIFICATION CONCERNING THE EXTENSIONS PROVIDED FOR IN ARTICLE 27.4 
OF THE AGREEMENT ON SUBSIDIES AND COUN TERVAILING MEASURES OF THE TRANSITION 
PERIOD FOR THE ELIMINATION OF EXPORT  SUBSIDIES, GRANTED PURSUANT TO 
THE PROCEDURES IN THE GENERA L COUNCIL DECISION WT/L/691 
ST. KITTS AND NEVIS 
The following communication, dated 25 September 2013, is being circulated at the request of the 
Delegation of St. Kitts and Nevis. 
 
_______________ 
 
 The attached is the new and full notification of St. Kitts and Nevis under Article XVI:1 of 
GATT 1994 and Article 25 of the Agreement on Subsidies and Countervailing Measures ("the 
Agreement").  We also submit this notification for purposes of transparency in the context of the extension 
granted to St. Kitts and Nevis under Article 27.4 of the Agreement, pursuant to the procedures 
in WT/L/691.   
1. Title of the programme 
 
The St. Christopher and Nevis Chapter 20.14 Fiscal Incentives Act and Subsidiary Legislation, 
Revised Edition – Showing the law as at 31 December 2002. Fiscal Incentive Act; Act 17 of 1974 in 
force 25 April 1974, amended by Act 9 of 1986. This is an Act to provide incentives to industry. 
 2. Period covered by the notification 
 The programme description is as of 30 June 2013 an d is identical to that as of 1 September 2001. 
 
3. Policy Objective and/or purpose of the subsidy 
 
The objective of this programme is to stimulate export performance, support investment, promote 
economic activity, and promote diversification in traditional and non-traditional products. 
 4. Background and authority for the subsidy 
 
Background 
 The Government of St. Kitts and Nevis considers that appropriate conditions for encouraging 
foreign direct investment are to be promoted in order to ensure the economy remains in a viable 
position.  G/SCM/N/253/KNA • G/SCM/N/260/KNA 
 
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  Authority 
 The St. Christopher and Nevis Chapter 20.14 Fiscal Incentives Act and Subsidiary Legislation, Revised Edition. Fiscal Incentive Act. Act 17 of 1974 in force 25
th April, 1974, amended by Act 9 
of 1986. 
 5. Form of the Subsidy 
 The subsidy takes the form of a tax exemption.  6. To whom and how the subsidy is provided (whether to producers, exporters or others), 
through what mechanisms, (whether it is a fixed sum or fluctuating amount per unit), and if 
the latter, how is it determined? 
 
The main beneficiaries of the fiscal incentives scheme are manufacturing and agro-processing 
enterprises. The incentive scheme is managed by the Ministry of International Trade, Industry, 
Commerce and Consumer Affairs. Applications for incentive benefits are submitted to the 
aforementioned Ministry, which recommends to Ca binet the level and type of concessions to be 
granted.  The Fiscal Incentives Act allows for the granting of a corporate tax holiday of up to fifteen 
(15) years, for the manufacture of approved products by approved enterprises. The duration of 
these concessions is in accordance with the local value added generated. In this respect, the Act classifies these approved enterprises as follows: 
 
i. Group I  enterprises, where the local value added is 50% or more of sales, may enjoy 
a tax holiday of up to 15 years; 
ii. Group II  enterprises, where the local value added is between 25% and 49% of sales, 
may enjoy a tax holiday of up to 12 years; 
iii. Group III enterprises, where the local value added is between 10% and 24% of 
sales, may enjoy a tax holiday of up to 10 years; 
iv. Enclave enterprises , where production is exclusively for export, may enjoy a tax 
holiday of up to 15 years. 
Where an approved enterprise is engaged in a hi ghly capital intensive industry it may receive 
some benefit for a period of up to 15 years. 
 The Act also grants import duty exemptions for machinery, equipment and spare parts, building 
materials, raw materials and others, as approp riate to be used in eligible enterprises. 
 The Fiscal Incentives Act No. 17 of 1974 further provides for corporate tax relief under certain circumstances once the tax holiday period has expired. The relief is contingent on export 
performance. It is granted on the export profits of  an enterprise accruing from the export of its 
approved product(s). Relief is provided for non-traditional exports to all countries; however, in the case of exports to Guyana, Jamaica and Trinidad and Tobago, the period of relief is of only five (5) 
years immediately following the expiration of the tax holiday period. 
 (Schedule II part two of the Act attached explains  the method of calculating export allowance) 
 
7. Subsidy per unit, or in cases where this is not possible, the total amount or the annual 
budgeted amount for this subsidy (indicating, if possible, the average subsidy per unit in the 
previous year). Where provision per unit subsidy information (for the year covered by the 
notification, for the previous year or both) is not possible a full explanation should be 
provided 
 
Given the nature and coverage of the programme there are no statistics available which reflect the 
amount of the subsidy per unit. Further, there is  no provision in our annual budget to determine 
the amount of funds allocated to this form of be nefit provided for approved enterprises because of 
approved assistance is revenue foregone. G/SCM/N/253/KNA • G/SCM/N/260/KNA 
 
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8. Duration of the subsidy 
 The duration of the subsidy as currently applied is subject to St. Kitts and Nevis' rights and 
obligations under the WTO Agreements and in particular, the SCM Agreement. 
 9. Statistics on the impact of the programme 
 The following table illustrates the total value of St. Kitts and Nevis' foreign trade with world partners on all commodities during the period 2002-2012.  
Value (EC$ millions) of St. Kitts-Nevis' Fo reign Trade with World Partners for the 
period 2002-2012  
Year Imports Exports Re-Exports 
2002 544.6 94.8 10.6 
2003 538.9 101.8 9.5 
2004 493.4 101.1 8.2 
2005 568.3 81.0 12.5 
2006 673.7 95.7 11.7 
2007 737.3 85.5 7.3 
2008 877.0 116.1 23.6 
2009 739.7 83.2 31.3 
2010 731.7 71.9 16.6 
2011 669.7 91.8 31.8 
2012 609.2 166.2 22.5 
 10. Transparency Provisions 
 
In line with the provisions outlined in the OECS draft model legislation for revising the OECS 
Member States' subsidies regimes, St. Kitts and Nevis continues to devise a strategic approach to amending its fiscal incentives program for its manufacturing industry in order to make it 
compatible with the WTO Agreement on Subsidies and Countervailing Measures.  
 A draft Investment Code for St. Kitts & Nevis has been created by the St. Kitts Investment 
Promotion Agency (SKIPA) in collaboration with the Ministry of Finance, Ministry of Legal Affairs, 
Ministry of International Trade, Industry & Comm erce and the beneficiaries of the subsidy. The 
Code seeks to overall reform the Fiscal Incentives  Act and makes provisions for the amendment of 
the legislation to be compliant with the provisions  of Article 27.4 of the Agreement on Subsidies 
and Countervailing Measures. 
 G/SCM/N/253/KNA • G/SCM/N/260/KNA 
 
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  ATTACHMENT I 
SCHEDULE 1 
MEMBER STATES 
(a) Antigua Jamaica 
Barbados Montserrat 
Belize St. Kitts/Nevis/Anguilla 
 Dominica St. Lucia 
Grenada St. Vincent  
Guyana Trinidad & Tobago 
 (b) any other State of the Caribbean region th at becomes a member of the Common Market. 
 
SCHEDULE II 
PART I 
EXPORTS TO THE FOLLOWING TERRITORIES ARE  
NOT ELIGIBLE FOR EXPORT ALLOWANCE 
 
(c) Antigua Jamaica 
 Barbados Montserrat  Belize St. Lucia  Dominica St. Vincent 
 G/SCM/N/253/KNA • G/SCM/N/260/KNA 
 
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  PART 2 
METHOD OF CALCULATING EXPORT ALLOWANCE 
1. An export allowance set off for the purposes of section 16 shall be calculated as follows: 
 
Export profits as a percentage  Rebate of income tax as a 
of total profits percentage of income tax on 
 export profits 
 
 10 but under 21 25% 21 but under 41 35% 
41 but under 61 45% 
61 and over 50%  
2. for the purposes of calculation – 
 
(a) export profits as a percentage of total prof its"shall be deemed to be export sales as a 
percentage of total sales". 
 
(b) profits attributable to exports shall be taken to be the amount resulting from the 
formula p x e  where – 
  s 
 
(i) "p"  represents the chargeable profit of a company for its year of income 
 
(ii) "e"  represents the proceeds of sales (ex-fact ory) of the output of a company exported 
during its year of income; 
 
(iii) "s"  represents the proceeds of sales (ex-factory) of the total output of the company 
during its year of income. 
 
3. In computing the proceeds of all sales for the year of income there shall be deducted any 
excise duty paid on the goods sold during that year. G/SCM/N/253/KNA • G/SCM/N/260/KNA 
 
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  SCHEDULE III 
TAX HOLIDAY PERIODS 
Classification of 
Approved Enterprise Tax Holiday Period 
Group  Years 
 
 
Group I Enterprise  15 
Group II Enterprise  12 Group I Enterprise  10 Enclave Enterprise  15 
 
  
 
 W.F. Glasford   Speaker 
 
Passed in the House of Assembly this 17
th day of April, 1974. 
  
E. JAMES FLEMING 
Ag. Clerk of the House of Assembly. 
 
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