G/SCM/N/284/GTM  
28 June 2017 
(17-3446) Page: 1/5 
Committee on Subsidies and Countervailing Measures  Original:  Spanish  
 
  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  
GUATEMALA  
The following communication, dated 27 June 2 017, is being circulated at the request of the 
delegation of Guatemala . 
 
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Pursuant to Article XVI:1 of the General Agreement on Tariffs and  Trade (GATT) 1994 and 
Articles  25 and 27.4 of the Agreement on Subsidies and Countervailing Measures (the "SCM 
Agreement"), and in accordance with th e procedures laid down in the General Council Decision in 
document WT/L/691 of 3 1 July 2 007 (the "Decision"), Guatemala hereby submits this notification 
for the period 1 July 2 014 to 3 0 June 2 015. 
Guatemala did not increase the favourability of the notifie d programmes in the above -mentioned 
period and maintained their status quo.  
Furthermore, with regard to the notified programmes, Guatemala hereby advises the Committee 
on Subsidies and Countervailing Measures (the "Committee") of the following:  
Pursuant to  paragraph 1(f) of the Decision, on 3 0 June 2 010 Guatemala notified its action plan for 
the elimination of the export subsidies contained in the three programmes which come under 
Article  27.4 of the SCM Agreement.  
In this action plan, under the heading "De scription of future action", Guatemala established a work 
programme which sets out the tasks (together with the related estimated time -frames) to be 
undertaken with a view to eliminating the export subsidies before the expiry of the transition 
period estab lished in the Decision, i.e. by 3 1 December 2 015. 
 
Guatemala continued to implement its work programme and introduced before the Congress of the 
Republic draft legislation aimed at eliminating export subsidies before the end of the transition 
period.  
This draft legislation obtained a favourable opinion from the Economi c Commission of the Congress 
of the Republic . When the new Economic Commission of the Congress came into office in 
March  2014, the draft underwent a number of  amendments . It is hoped that the Congress in 
plenary session may be able to examine and approve this draft legislation as soon as possible . G/SCM/N/284/GTM  
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  INDEX  
TABLE OF CONTENTS  
  Page 
 
I Exemption from company tax ; exemption from customs duties and other import 
taxes, including value added tax (VAT),  on imports of machinery, equipment, parts, 
components and accessories required for the production process of companies 
under special customs regimes   2 
 
II Exemption from company tax ; exemption from customs duties and other import 
taxes, including value a dded tax (VAT), on imports of machinery, equipment, parts, 
components and accessories required for the production process relating to 
activities of managers and users of free zones   3 
 
III Exemption from company tax ; exemption from customs duties and other  import 
taxes, including value added tax (VAT), on imports of machinery, equipment, parts, 
components and accessories required for the production process of commercial and 
industrial enterprises operating in the Industrial and Trade Free Zone (ZOLIC)   4 
 
 
PROGRAMME  
1. Description  
 
(a) Exemption from company tax on income from the export of goods produced or assembled in 
Guatemala and exported under special customs regimes to non -Central American countries . 
 
(b) Exemption from customs duties and other import  taxes, including value added tax (VAT), on 
imports of machinery, equipment, parts, components and accessories required for the 
production process . 
 
2. Period of notification  
 
1 July 2 014 to 3 0 June 2 015. 
 
3. Objective  
 
To promote, encourage and develop th e production in the national customs territory of goods for 
export outside the national territory . 
 
4. Background and authority  
 
Background : 
 
The Government of Guatemala considers that appropriate conditions for encouraging investment of 
national and forei gn capital need to be promoted in order to reduce the high poverty levels 
stemming, inter alia , from the internal armed conflict, as well as to raise employment levels and 
improve the distribution of income . 
 
Authority : 
 
Legislative Decree No. 29-89 of 2 3 May 1 989 and amendments thereto . 
 
5. Form of the subsidy  
 
The subsidy takes the form of a tax exemption, but its effect is greatly reduced given the other 
national taxes payable . G/SCM/N/284/GTM  
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6. To whom and how the subsidy is provided  
 
The subsidy is granted to compan ies by way of an exemption from company tax on income from 
the export of goods produced or assembled in Guatemala and exported under special customs 
regimes outside national customs territory . 
 
To be eligible for the programme, companies must be recognized  by the Ministry of the Economy . 
 
7. Subsidy per unit or, in cases where this is not possible, the total or annual amount 
budgeted for this subsidy  
 
Subsidies are granted in accordance with the exporters' income ; they cannot therefore be 
quantified given t hat they vary each fiscal year . 
 
8. Duration of the subsidy and/or any other time -limit which could affect it, including 
the date of inception/commencement  
 
This subsidy programme is applicable for up to ten years . 
 
9. Statistical data  
 
No such statistical  information is available . 
 
PROGRAMME  
1. Description  
 
(a) Exemption from company tax on income exclusively from the activities of managers and 
users of the free zone . 
 
(b) Exemption from customs duties and other import taxes, including value added tax (VAT ), on 
imports of machinery, equipment, parts, components and accessories required for the 
production process . 
 
2. Period of notification  
 
1 July 2 014 to 3 0 June 2015. 
 
3. Objective  
 
To promote and regulate the establishment in Guatemala of free zones, the activities of which, in 
particular measures to boost foreign trade, create employment and stimulate technology transfer, 
serve to encourage national development . 
 
4. Background and authority  
 
Background : 
 
In an endeavour to encourage the development of reg ions which have been marginalized as a 
result of the internal armed conflict and to reduce poverty levels, a free -zone system has been 
established as an instrument to create employment, attract investment and encourage technology 
transfer . 
 
Authority : 
 
Legislative Decree No. 65-89 of 1 4 November 1 989. 
5. Form of the subsidy  
 
The subsidy takes the form of a tax exemption . 
 G/SCM/N/284/GTM  
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  6. To whom and how the subsidy is provided  
 
The beneficiaries of this incentive are the managers and users of free zones . 
 
To enjoy these  fiscal benefits, companies must be fully authorized by the Ministry of the Economy . 
 
7. Subsidy per unit or, in cases where this is not possible, the total or annual amount 
budgeted for this subsidy  
 
Subsidies are granted in accordance with the exporters'  income ; they cannot therefore be 
quantified given that they vary each fiscal year . 
 
8. Duration of the subsidy and/or any other time -limit which could affect it, including 
the date of inception/commencement  
 
This subsidy programme is applicable for up to ten years . 
 
9. Statistical data  
 
No such statistical information is available . 
 
PROGRAM ME 
1. Description  
 
(a) The Industrial and Trade Free Zone (ZOLIC) operates in a non -customs area located within 
the perimeter established in the regulatory plan of the S anto Tomás de Castilla Port in the 
Department of Izabal, and in non -customs areas that can be fitted out for its public special 
economic development areas, which may be located in any part of national territory . 
 
(b) Users which are established and operate  in the ZOLIC enjoy exemption from the following : 
(i) 100 % of company tax for ten years, calculated as of the date on which the enterprise 
starts up operations in the ZOLIC ; (ii) value added tax, customs duties and other charges 
applicable to imports enter ing the ZOLIC ; (iii) value added tax on taxable actions and 
procedures carried out in the ZOLIC ; and (iv) stamp tax on documents containing deeds or 
contracts relating to goods or business in the ZOLIC . 
 
(c) Users are also exempt from the payment of import  duties, value added tax, taxes and other 
fiscal charges levied in relation to the entry into and stay in the ZOLIC of all goods and other 
articles or negotiable instruments, raw materials, inputs, materials, semi -processed goods, 
intermediate goods, packa ging and containers, as well as machinery, equipment, spare 
parts, accessories and other goods intended for industrial or commercial production activities 
or the provision of services . 
 
2. Period of notification  
 
1 July 2 014 to 3 0 June 2 015. 
 
3. Objective  
 
To promote industrial and commercial development in Guatemala in order to create further 
sources  of employment . 
 
4. Background and authority  
 
Background : 
 
Measure to encourage investment as a mechanism for promoting development . 
 G/SCM/N/284/GTM  
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  Authority : 
 
Decree No.  22-73 of the Congress of the Republic of Guatemala of 2 1 March 1 973 and the 
amendment thereto introduced by Decree No. 30-2008 of the Congress of the Republic of 
Guatemala, in effect as of 1 July 2 008. 
 
5. Form of the subsidy  
 
The subsidy takes the form of a  tax exemption . 
 
6. To whom and how the subsidy is provided  
 
The beneficiaries of these incentives are commercial and/or industrial enterprises operating under 
this special regime . 
 
7. Subsidy per unit or, in cases where this is not possible, the total or annual amount 
budgeted for this subsidy  
 
Subsidies are granted in accordance with the beneficiaries' income ; they cannot therefore be 
quantified given that they vary each fiscal year . 
 
8. Duration of the subsidy and/or any other time -limit which could affe ct it, including 
the date of inception/commencement  
 
Exemption from company tax is applicable for up to ten years . ZOLIC operations, however, are 
unlimited in duration . 
 
9. Statistical data  
 
No such statistical information is available . 
 
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