WORLD TRADE  
ORGANIZATION   
G/SCM/N/243/GTM 
11 July 2012 
 (12-3744) 
Committee on Subsidies and 
Countervailing Measures Original: Spanish 
 
 
 
SUBSIDIES 
 
Continuation of Extension under SCM Article 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 
 
Updating Notification 
 
GUATEMALA 
 
  The following communication, dated 6 July 2012, is being circulated at the request of the delegation of Guatemala. 
 
_______________ 
 
  Pursuant to Article 27.4 of the Agreem ent 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 31 July 2007 ("the Decision"), Guatemala hereby submits this 
notification for the period 1 July 2011 to 30 June 2012. 
  Guatemala did not increase the favourabilit y of the notified programmes in the 
above-mentioned period.   Furthermore, with regard to the notified programmes, Guatemala hereby advises the 
Committee on Subsidies and Countervailing M easures ("the Committee") of the following: 
  Pursuant to paragraph 1(f) of the Decision,  on 30 June 2010 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 "Descrip tion 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 subs idies before the expiry of the transition period 
established in the Decision;  i.e. by 31 December 2015. 
 
 During the period covered by this notification,  Guatemala continued to implement its work 
programme and carried out the following tasks:  
(a) The Working Group within the Ministry of the Economy in charge of analysing 
domestic legislation and propos ing options for bringing the programmes which come 
under Article 27.4 of the SCM Agreement in to conformity with the Agreement has 
continued to meet on a regular basis since August 2011.  With support from the G/SCM/N/243/GTM 
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  Permanent Mission of Guatemala to the WTO, a wide-ranging discussion took place 
that same month with various public-sector in stitutions and civil society.  The official 
from the Permanent Mission of Guatemala to  the WTO who travelled to Guatemala 
for this discussion also had bilateral meetings with, inter alia , the Ministry of 
Public Finance;  the Tax Administration Supervisory Authority (SAT);  the Bank of 
Guatemala and the Economic Cabinet;  the private sector;  academia;  the National 
Competitiveness Programme;  some non-gove rnmental organizations and political 
parties;  and the consultant who was in the process of being hired.  Following the 
discussion and meetings, a report containing specific recommendations was drawn up. 
(b) In September 2011, the Ministry of the Economy appointed the consultant 
responsible for conducting a more in-d epth analysis and putting forward 
recommendations with a view to bringing the programmes which come under Article 27.4 of the SCM Agreement into conformity with the Agreement.  The 
consultant held consultations with at least  29 institutions, including the Ministry of 
the Economy;  the Ministry of Public Finance;   the SAT;  the Office of the President's 
Planning and Programming Secretariat (SEGEPLAN);  the Bank of Guatemala;  the Banking Supervisory Authority;  the ch ambers of commerce, trade associations 
and users of the programmes, such as the National Free Zone Association;  and the Expanded Committee of the National Comp etitiveness Programme (composed of 
public-sector authorities, the private sector, deputies and various civil society 
stakeholders) - to mention but a few.  Th e consultant also prepared a comparative 
study of different incentive schemes in effect in various WTO Members and held six working meetings with the Inter-Instituti onal Group set up to examine this matter.  
The Group provided comments and inputs which the consultant then took into consideration in drawing up a proposal for a draft law. 
(c) The consultant presented the outcomes of the consultation process and his draft law 
proposal to the Ministry of the Economy on 12 January 2012.  Since then, the draft has been shared with public-sector in stitutions, the Economy and Foreign Trade 
Commission of the Congress of the Republic and civil society for analysis, comments 
and suggestions.  As a result, the draft la w proposal has been amended and improved.  
The final proposal is expected to be transmitted as of July 2012 to Foro Guatemala  
(Guatemala Forum, which bri ngs together public-sector ins titutions and civil society) 
and to Guatemala's Foundation for Development (FUNDESA) for information and discussion.  A final version of the draft law is  due to be sent to the General Secretariat 
of the President's Office in August or Se ptember 2012 for approval and referral back 
to the Congress. 
 As can be seen, Guatemala is actively implem enting the tasks in its work programme, which 
reflects its strong commitment to eliminating the ex port subsidies before the expiry of the transition 
period.  Guatemala remains at the disposal of WT O Members to clarify or expand on the information 
contained in this notification.  G/SCM/N/243/GTM 
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TABLE OF CONTENTS 
 
 
 Page 
 
I. Exemption from company tax;  exemption from customs duties and other import taxes, 
including value-added tax (VAT), on impor ts of machinery, equipment, parts, 
components and accessories required for the production process of companies under special customs regimes ……………………………............................................................ 3 
 
II. Exemption from company tax;  exemption from customs duties and other import taxes, 
including value-added tax (VAT), on impor ts of machinery, equipment, parts, 
components and accessories required for the production process relating to activities of managers and users of Free Zones ………………………………………………………… 4 
 
III. Exemption from company tax;  exemption from customs duties and other import taxes, 
including value-added tax (VAT), on impor ts of machinery, equipment, parts, 
components and accessories required for the production process of commercial and industrial enterprises operating in the Indus trial and Trade Free Zone (ZOLIC) …………. 6 
 I. 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 2011 to 30 June 2012. 
 
3. Objective 
 
 To promote, encourage and develop the produc tion in the 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 well as to raise employment levels 
and improve the distribution of income.  G/SCM/N/243/GTM 
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   Authority: 
 
 Legislative Decree No. 29-89 of 23 May 1989 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.  
6. To whom and how the subsidy is provided 
 
 The subsidy is granted to companies 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 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-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. 
 
II. PROGRAMME 
1. Description 
 
(a) Exemption from company tax on income ex clusively 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 2011 to 30 June 2012. 
  G/SCM/N/243/GTM 
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  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 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 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 
 
 The beneficiaries of this incentive are the managers and users of Free Zones. 
 
 To be eligible for these fiscal benefits, compan ies 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 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-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. G/SCM/N/243/GTM 
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  III. PROGRAMME 
1. Description 
 
(a) The Industrial and Trade Free Zone (ZOLIC ) operates in a non-customs area located 
within the perimeter established in the regul atory plan of the Santo Tomás de Castilla 
Port in the Department of Izabal, and in non-customs areas which 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 per cent 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 entering the ZOLIC;  (iii) value-added tax on taxable actions a nd procedures carried out in the ZOLIC;  
and (iv) stamp tax on documen ts 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 th e entry into and stay in the ZOLIC of all 
goods and other articles or negotiable instrume nts, raw materials, inputs, materials, 
semi-processed goods, intermediate goods , packaging 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 2011 to 30 June 2012.  
3. Objective 
 
 To promote industrial and commercial developm ent 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. 
 
Authority: 
  Decree No. 22-73 of the Congress of the Republic  of Guatemala of 21 March 1973 and the 
amendment thereto introduced by Decree No. 30-20 08 of the Congress of the Republic of Guatemala, 
in effect as of 1 July 2008.  
5. Form of the subsidy 
 
 The subsidy takes the form of a tax exemption.   G/SCM/N/243/GTM 
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  6. To whom and how the subsidy is provided 
 
 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 
 
 Subsidies are granted in accordance with the bene ficiaries' 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 
 
 Exemption from company tax is applicable fo r up to ten years.  ZOLIC operations, however, 
are unlimited in duration. 
 
9. Statistical data 
 
 No such statistical information is available. 
 
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