WORLD TRADE  
ORGANIZATION  G/SCM/N/177/GTM 
7 July 2008 
 (08-3253) 
Committee on Subsidies and 
Countervailing Measures Original:   Spanish 
 
 
 
SUBSIDIES 
 
Continuation of Extension under SCM Artic le 27.4 of the Transition Period for  
the Elimination of Export Subsidies Pursuant to the Procedures Contained  
in the General Council Decision in Document WT/L/691  
 
GUATEMALA 
  
 The following communication, dated 2 July 2008,  is being circulated at the request of the 
delegation of Guatemala.  
_______________ 
 
 
 Please find attached the Updating Notification pursuant to paragraph 2(a) of General Council 
Decision WT/L/691, approved on 31 July 2007.  I shoul d be grateful if it could be circulated to 
Members in the WTO Committee on Subsidies and Countervailing Measures.   I likewise take this opportunity to inform you that the programmes have not undergone any 
modification since the last notification. 
 G/SCM/N/177/GTM 
Page 2  
 
   
 
CONTENTS 
 
 
PROGRAMME
 
   Page
 
 
PROGRAMME I:  Exemption from Company Ta x;  exemption from customs duties and 
other import taxes, including Value-Added T ax (VAT), on machinery, equipment, parts, 
components and accessories required for th e production process of companies under 
special custom s regimes........................................................................................................ .................3  
PROGRAMME II:  Exemption from Company Tax;  exemption from customs duties 
and other import taxes, including Value-A dded Tax (VAT), on machinery, equipment, 
parts, components and accessories required  for the production process relating to 
activities of managers a nd users of Free Zones................................................................................. ..5 
PROGRAMME III:  Exemption from Company Tax;  exemption from customs duties 
and other import taxes, including Value-A dded Tax (VAT), on 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)..................7   G/SCM/N/177/GTM 
 Page 3 
 
 
  PROGRAMME I  
 
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. 
  (b) Exemption from customs duties and other import taxes, including Value-Added 
Tax (VAT), on machinery, equipment, parts, components and accessories required for the production process. 
 
2. Period of notification
 
  June 2008.  
3. Objective
 
  To promote, encourage and develop the producti on in national customs territory of goods for 
export outside the national territory.  4. Background and authority
 
 
Background  
  The Government of Guatemala considers th at appropriate conditions for encouraging 
investment of national and foreign capital need to  be promoted in order to reduce the high poverty 
levels stemming, inter alia , from the internal armed conflict as we ll as to raise employment levels and 
improve the distribution of income.  Authority
 
  Legislative Decree No. 29-89 of 23 May 1989. 
 
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. 
 
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 the amount is determined ) 
  The subsidy is granted to companies by wa y of an exemption from Company Tax on income 
from the export of goods produced or assembled in Guatemala and exporte d outside the national 
territory under special customs regimes.   To be eligible for the programme, companies must be recognized by the Ministry of the 
Economy. G/SCM/N/177/GTM 
Page 4  
 
  7. Subsidy per unit, or, in cases where this is not possible, the total or annual amount budgeted 
for this subsidy (indicating, if possible, the average subsidy per unit for the year covered by 
the notification, the previous year or bo th).  A full explanation will be provided . 
  Subsidies are granted in accordance with the ex porters' income;  they cannot therefore be 
quantified given that they vary each fiscal year. 
 8. Duration of the subsidy and/or any other time-l imit which could affect it, including the date of 
inception/commencement  
 
 This subsidy programme is applicable for up to ten years. 
 9. Statistical data permitting an assessment of th e effects of the subsidy on trade.  The specific 
nature and scope of such statistics is left to the judgement of the notifying Member.  It is, 
however, desirable – to the extent possible, relevant and/or determ inable – that such 
information include statistics relating to the pr oduction, consumption, im ports and exports of 
the subsidized product(s ). 
  No such statistical information is available.   G/SCM/N/177/GTM 
 Page 5 
 
 
  PROGRAMME II  
 
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 machinery, equipment, parts, components and accessories required for the production process. 
 
2. Period of notification
 
  June 2008.  
3. Objective
 
  To promote and regulate the establishment in  Guatemala of Free Zones, the activities of 
which, in particular measures to boost foreign tr ade, create employment and stimulate technology 
transfer, serve to encourage national development.  
4. Background and authority
 
 Background
 
  In an endeavour to encourage the development of regions which have been marginalized as a 
result of the internal armed conflict and to re duce poverty levels, a Free Zone system has been 
established as an instrument to create employme nt, attract investment and encourage technology 
transfer.  Authority
 
 
 Legislative Decree No. 65-89 of 14 November 1989. 
 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 
that mechanisms, whether it is a fixed sum or fluctuating amount per unit and, if the latter, 
how the amount is determined ) 
  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 (indicating, if possible, the average subsidy per unit for the year covered by 
the notification, the previous year or bo th).  A full explanation will be provided . 
  Subsidies are granted in accordance with the exporters' income; they cannot therefore be 
quantified given that they vary each fiscal year. G/SCM/N/177/GTM 
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8. Duration of the subsidy and/or any other time-l imit which could affect it, including the date of 
inception/commencement  
  This subsidy programme is applicable for up to ten years. 
 
9. Statistical data permitting an assessment of th e effects of the subsidy on trade.  The specific 
nature and scope of such statistics is left to the judgement of the notifying Member.  It is, 
however, desirable – to the extent possible, relevant and/or determ inable – that such 
information include statistics relating to the pr oduction, consumption, im ports and exports of 
the subsidized product(s ). 
  No such statistical information is available.   G/SCM/N/177/GTM 
 Page 7 
 
 
  PROGRAMME III  
 
1. Description  
  (a) Exemption from Company Tax on income from the activities of managers and users 
of the Industrial and Trade Free Zone (ZOLIC). 
  (b) Exemption from customs duties and other import taxes, including Value-Added 
Tax (VAT), on machinery, equipment, parts, components and accessories required for the production process. 
 
2. Period of notification
 
  June 2008.  
3. Objective
 
  To promote the economic development of the province of Izabal, where the population – mostly Garífuna – is the most backward in the c ountry in terms of social and economic development, 
and capitalize on its geographical location as the sole  access point to Guatemala from the Atlantic 
Ocean. 
 
4. Background and authority
 
 Background
 
 
 Measure to encourage investment as a m echanism for promoting the development of 
Guatemala's Garífuna population.  Authority
 
  Decree No. 22-73 of 21 March 1973. 
 
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 the amount is determined ) 
  The beneficiaries of these incentives are comme rcial 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 (indicating, if possible, the average subsidy per unit for the year covered by 
the notifications, the previous year or both).  A full explanation will be provided . 
 
 Subsidies are granted in accordance with the bene ficiaries' income;  they cannot therefore be 
quantified given that they vary each fiscal year.  G/SCM/N/177/GTM 
Page 8  
 
  8. Duration of the subsidy and/or any other time-l imit which could affect it, including the date of 
inception/commencement  
  This subsidy programme is applicable for up to ten years.  
9. Statistical data permitting an assessment of th e effects of the subsidy on trade.  The specific 
nature and scope of such statistics is left to the judgement of the notifying Member.  It is, 
however, desirable – to the extent possible, relevant and/or determ inable – that such 
information include statistics relating to the pr oduction, consumption, im ports and exports of 
the subsidized product(s ). 
 
 No such statistical information is available.  
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