WORLD TRADE  
ORGANIZATION   
G/SCM/Q2/MKD/2 
30 May 2011 
 (11-2713) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
Replies to Questions posed by the UNITED STATES1 regarding the New and Full  
Notification of the FORMER YUGOSLAV REPUBLIC OF MACEDONIA2 
   The following communication, dated 26 May 2011, is being circulated at the request of the Delegation of the Former Yugos lav Republic of Macedonia.   
 
_______________ 
 
 
I. TEXTILE INDUSTRY 
 
 Programme for Revitalization of Textile  Industry in the Republic of Macedonia 
 
Question 1 
  Please clarify whether the programme as a whole has a termination date or is open-
ended . 
 
Reply 
  In accordance with the Strategy for Developm ent of the Textile Industry, adopted by the 
Government of the Republic of Macedonia in July  2007, and the Action Plan for the Implementation 
of the Strategy, by now two annual programmes fo r revitalization of textile industry have been 
prepared and implemented for 2009 and 2010. 
 
V. REGIONAL STATE AID 
 
 "Law on Technological Industrial Development Zones", published in the Official Gazette of 
the Republic of Macedonia No. 14/07, 103/08, 130/08 and 139/09 . 
 
Question 1 
  The notification identifies "relieves" as one form by which the subsidy can be provided 
under this programme.  Please explain what "relieves" means in this context. 
 
                                                      
1 G/SCM/Q2/MKD/1. 
2  G/SCM/N/186/MKD. G/SCM/Q2/MKD/2 
Page 2  
 
  Reply 
 
 In the context of the Law on Technological Industrial Development Zones ("Law on TIDZs") 
"relieves" means partial exemption of the obligation to pay certain taxes and fees. 
 
Question 2 
  Could Macedonia clarify under what circums tances an eligible company will receive the 
subsidy in one form rather than another, e.g., when will a company receive a grant rather than a tax exemption? 
 Reply 
 
 The Law on TIDZs prescribes the general framework  of the subsidy forms that can be offered 
to the investors in TIDZs.  The subsidy forms whic h will be offered to the particular investor depend 
on the size of the investment, number of the new workplaces opened by the investor, the type of the 
industry etc.  Although, the Macedonian Government negotiates the subsidy forms with each investor 
separately, the value of whole package must be with in the limits and forms prescribed in the Law on 
TIDZs. 
 
Question 3 
  
 What particular "investment expendit ures" are eligible under this programme? 
 
Reply 
  The term "investment expenditures" is explai ned in detail in the "R egulation on Establishing 
Conditions and Procedure for Granting Regional Ai d" published in the "Official Gazette of the 
Republic of Macedonia" no. 81/03.  It includes:  
(a) In cases where the aid is calculated on the basis of the investment expenditure, the 
eligible expenditures shall be the expend itures relating to investment in land, 
buildings, machinery and equipment.  The e ligible expenditures of acquisition of the 
technology. 
(b) In cases where the aid is calculated on the basi s of jobs created, the amount of the aid 
shall be expressed as a percentage of th e wage expenditures over a period of two 
years under the following conditions: 
- The job creation shall be linked to the carrying-out of a project and the jobs 
shall be created within three years of the investment's completion; 
- The investment project shall lead to a net increase in the number of 
employees in the establishment concerne d, compared with the average over 
the previous 12 months.  G/SCM/Q2/MKD/2 
 Page 3 
 
 
  Question 4 
  How many Technological Industrial Deve lopment Zones are currently in operation 
under this programme? 
 Reply 
 
 "Skopje 1" is the only fully operational Tec hnological Industrial Development Zone at the 
moment.  Three others ("Skopje 2", "Shtip" and "Tetovo") are currently under construction.  "Skopje 
1" and "Skopje 2" are/will be operated by th e Directorate of the Technological Industrial 
Development Zones which is state organization,  whilst "Shtip" and "Tetovo" will be built and 
managed by private operators through the public-private partnership model. 
  
__________