WORLD TRADE  
ORGANIZATION  S/WPGR/W/25/Add.5 
27 March 2007 
 
 (07-1266) 
Working Party on GATS Rules   
  
 
SUBSIDIES FOR SERVICES SECTORS 
 
INFORMATION CONTAINED IN WTO TRADE POLICY REVIEWS 
 
Background Note by the Secretariat
1 
 
Addendum  
 
 
I. INTRODUCTION 
1. This Note provides an  update of the information on subsidies in services contained in Trade 
Policy Reviews.  It complements the information provided in S/WPGR/W/25 as well as in Add. 1 to 
4, and covers 51 Reviews carried out since the last  update in February 2004 (WT/TPR/S/129 to 179).2  
Relevant new information has been added, in itali cs, in the overview table already contained in the 
previous documents (Table 1).   
2. As explained in the preceding Notes, the compilation of information from TPR reports 
necessarily suffers from certain limitations due to the particular focus of these reports.3  It also needs 
to be kept in mind that, while this Note comp iles potentially relevant information against the 
background of the definition of "subsidy" and related concepts (e.g., "benefit", "financial 
contribution") contained in the Agreement on S ubsidies and Countervailing Measures (ASCM), not 
all data recorded in TPR reports may be compatib le with this definition.  The following compilation 
focuses, in the light of Article 2 of the ASCM, on specific subsidies.  While most reports contain 
some information on subsidies, the limited level of  detail sometimes makes it difficult to identify, for 
example, the extent to which a benefit is actually bei ng conferred or the identity of the recipient of the 
subsidy.  As well, some of the subsidies mentione d in TPR reports may be financial contributions to 
services which are beyond the scope of the GATS,  i.e., services provided in the exercise of 
governmental authority (Article I:3(b)) or ser vices excluded through the Annex on Air Transport 
Services.  Accordingly, the information contai ned in this Note, while aiming at facilitating 
discussions, does not prejudge whether the measures list ed should be considered subsidies, nor does it 
imply any judgement on the objectives they pursue.   
                                                      
1 This document has been prepared under the Secret ariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO.  
2 As of 10 March 2007. 
3 See introductions to: S/WPGR/W/25, and Add.1 to Ad d. 4.  For instance, the selection of Members to 
be reviewed, or the content of reports, is not driven by subsidy-related issues and problems, but rather by a 
Member's main policy challenges and constraints.  As a result, the amount of information contained on subsidies in reports might vary from Member to Member.  Also, TPR reports do not normally attempt to assess the 
possible distortive effects of subsidies on trade.   S/WPGR/W/25/Add.5 
Page 2  
 
  II. POLICY PATTERNS 
3. The information contained in the TPR reports re viewed in this Note tends to confirm the 
general patterns identified in previous documents.  Subsidies are found in the whole range of services 
sectors, but mainly in tourism, financial services and transport, especially maritime transport.  Concerning the types of measures used, Members c ontinued to rely on tax incentives more than on 
direct grants.  Developing country Members also often use duty-free inputs as part of free zone 
incentives.   
Table 1: Forms of financial assistance to services sectors - information from TPR Reports 
 
¾   MEASURE   ¾ Direct grants Preferential 
credit & 
guarantees Equity 
injections Tax incentives Duty-free inputs 
&  
free zones Other &  
unspecified 
measures Number 
of  WTO 
Members2 
À    SECTOR     À         
Tourism Botswana 
Canada Israel 
Switzerland 
Liechtenstein Costa Rica Czech Rep. 
Slovak Rep. 
Australia Lesotho 
Morocco 
Turkey  Canada 
Nigeria
1 
Iceland 
India 
Jamaica South Africa Trinidad & 
     Tobago 
Turkey Grenada 
Mauritius 
Slovak Rep. Barbados 
Uganda 
Botswana Morocco 
Belize 
Switzerland  South 
Africa Burundi Nigeria 
Argentina Egypt 
India 
Israel Jamaica Nicaragua 
Philippines 
Solomon Is. Tanzania 
Trinidad & 
     Tobago Uruguay 
Madagascar 
Ghana Macau, China 
Costa Rica 
Dominica Grenada 
St. Kitt & Nevis 
Saint Lucia St. Vincent & G. 
Gabon 
Cameroon Mauritius Slovak Rep. 
Malawi 
Haiti Barbados 
Australia 
Dominican Rep. Zambia 
Venezuela 
Lesotho Morocco 
Niger 
Senegal Honduras 
Guyana 
Thailand Turkey 
Sri Lanka 
Singapore Benin Burkina Faso 
Mali 
Belize Suriname 
Korea RP 
Brazil Liechtenstein 
Sierra Leone 
Qatar Paraguay Argentina 
Egypt India 
Jamaica 
Kenya Nicaragua Peru 
Solomon Is. 
Tanzania Trinidad & 
     Tobago 
Turkey Uruguay 
Mozambique 
Ghana Macau, China 
Dominica 
Grenada S. Kitt & Nevis 
Saint Lucia 
St. Vincent & G. Malawi 
Haiti 
Barbados Burundi Morocco  
Niger 
Senegal Honduras 
Bulgaria 
Guyana   
Burkina Faso 
Belize 
Suriname  Sierra Leone 
Nigeria 
Ecuador Philippines 
Guinea 
Bolivia Malaysia 
Djibouti Guinea
1 
Lesotho Singapore 
Brunei D. 
Mauritius Guatemala Slovenia 
Barbados 
New Zealand Indonesia 
The Gambia 
Chinese     Taipei 
  
  
76  S/WPGR/W/25/Add.5 
 Page 3 
 
 
  ¾   MEASURE   ¾ Direct grants Preferential 
credit & 
guarantees Equity 
injections Tax incentives Duty-free inputs 
&  
free zones Other &  
unspecified 
measures Number 
of  WTO 
Members2 
À    SECTOR     À         
Ecuador 
Guinea 
Bolivia 
Malaysia Djibouti China 
 
Transportation general or 
unspecified Canada 
Switzerland 
Liechtenstein Czech Rep. 
Australia 
Namibia  South Africa 
New Zealand 
Korea RP  
 Poland 
Grenada  Philippines 
Poland 
Korea RP Madagascar 
Slovak Rep. 
Malawi Australia 
Morocco 
Sri Lanka Burkina Faso 
Suriname 
Brazil Japan 
Qatar 
Paraguay Egypt Djibouti 
China 
Tanzania  Mozambique 
Malawi 
Venezuela Morocco 
The Gambia  
Burkina Faso Suriname 
Philippines 
Egypt Djibouti 
Tanzania Brunei D. 
Czech Rep. 
Slovak Rep.  Indonesia 
Bulgaria 
The Gambia Sri Lanka 
EC 
Bangladesh   
 
37 
Maritime transport  Australia 
Solomon Islands
1 
Czech Rep. 
Pakistan India 
Turkey 
Singapore Israel  
U.S. Thailand 
U.S. 
India  Egypt 
India 
Jamaica 
Peru Singapore 
Turkey 
U.S. Brazil 
Japan 
Mauritius Mexico 
Barbados 
Australia Venezuela 
HK, China 
Indonesia Honduras 
Turkey 
Sri Lanka EC Philippines 
Malaysia 
Djibouti Tanzania 
 Egypt 
Jamaica 
Papua N.G. 
Peru Turkey 
Pakistan 
Barbados Indonesia 
Honduras 
Philippines Djibouti 
Chinese Taipei 
Tanzania EC 
Korea RP 
U.S.  
Mauritius India 
Australia 
UAE   
 
 
32 
Air transport  Canada 
U.S.  Iceland  Papua N. G. Hungary
1 Egypt 
Macau, China  Mexico Venezuela 
HK, China 
Niger Honduras 
Singapore 
Mongolia Paraguay 
Philippines 
Djibouti Canada 
 Hungary 
Papua N.G. Niger Honduras 
Philippines 
Egypt Djibouti EC  
India EC  
New Zealand 
U.S.  
UAE Colombia   
22 
 
Rail transport India 
Kenya Bolivia  Australia 
Hong Kong, Tanzania Slovak Rep.1 
Malawi  
 S/WPGR/W/25/Add.5 
Page 4  
 
  ¾   MEASURE   ¾ Direct grants Preferential 
credit & 
guarantees Equity 
injections Tax incentives Duty-free inputs 
&  
free zones Other &  
unspecified 
measures Number 
of  WTO 
Members2 
À    SECTOR     À         
Switzerland 
Czech Rep. 
South Africa 
Turkey China 
Senegal 
Mongolia 
Tanzania India 
EC 
Indonesia 
Senegal  16 
Financial services Poland 
Brazil Australia 
South Africa 
Korea RP Argentina 
 Indonesia 
Thailand Poland 
EC  
U.S Costa Rica 
Slovak Rep. 
 HK, China 
Thailand Norway 
Slovak 
Rep. Mexico 
India
1 
Indonesia 
Thailand 
Turkey 
Korea RP 
Switzerland 
China 
 Singapore 
Tanzania U.S. 
Poland 
Korea RP Switzerland 
Ghana  
Macau, China Mauritius 
Brazil 
Dominica St. Kitt & Nevis 
Malaysia 
India Barbados 
Australia 
Rwanda Paraguay Egypt 
Trinidad & 
     Tobago Guinea 
Bolivia 
Djibouti Kyrgyz Rep. 
Uganda 
Canada  Trinidad & 
     Tobago Jamaica 
Singapore 
Tanzania Thailand  
Trinidad & 
     Tobago
1 
Mozambique 
St. Vicent & G. 
Barbados Morocco 
The Gambia 
Mozambique Saint Lucia 
Egypt 
Guinea Djibouti Chinese Taipei 
Tanzania Korea RP 
Brunei D. Czech Rep. 
Slovak Rep. 
India  Barbados 
Japan  
 
49 
Software, info technology, 
communications, 
info processing Canada 
Australia 
Turkey Jamaica  Canada 
Egypt 
India 
Korea RP Grenada  
Slovak Rep. 
Pakistan Australia 
Sri Lanka 
Belize Brazil Philippines 
Malaysia 
Djibouti U.S. 
 Jamaica 
Trinidad &  
    Tobago
1 
Uruguay Madagascar 
Grenada 
Pakistan India 
The Gambia 
Belize Philippines Malaysia 
Djibouti 
 Korea RP 
Pakistan  
 
 
21 
Construction U.S. 
Australia 
Chile Argentina  
Poland 
Chinese Taipei  Argentina  
Bolivia 
Trinidad &      Tobago 
Turkey 
Korea RP Poland 
India  
Australia Venezuela 
Niger 
Sri Lanka Burkina Faso 
Suriname 
Brazil Mongolia Djibouti 
U.S. 
 Mozambique 
Brunei D. 
India Niger 
Burkina Faso 
Suriname Djibouti   
 
21  S/WPGR/W/25/Add.5 
 Page 5 
 
 
  ¾   MEASURE   ¾ Direct grants Preferential 
credit & 
guarantees Equity 
injections Tax incentives Duty-free inputs 
&  
free zones Other &  
unspecified 
measures Number 
of  WTO 
Members2 
À    SECTOR     À         
Recreation, culture 
& sports Canada 
Korea RP 
Norway 
Australia Jamaica  Bolivia 
Costa Rica 
Australia 
Niger Senegal Honduras 
Sri Lanka 
 Bolivia 
Israel 
Niger 
Senegal Honduras Chinese Taipei   
13 
Telecom Peru 
Singapore Australia 
Venezuela 
El Salvador Canada 
Botswana 
Namibia Chile 
U.S.  
 India  India 
St. Kitt & Nevis
1 
Venezuela 
Singapore 
Burkina Faso Korea RP 
Mongolia 
Paraguay Nigeria 
Philippines 
Egypt Tanzania 
 Trinidad & 
     Tobago
1 
Mozambique 
Saint Lucia 
India The Gambia 
Burkina Faso 
Philippines Egypt 
Tanzania Mauritius 
India Niger 
The Gambia 
Iceland Chinese  
   Taipei 
  
 
28 
Audiovisual 
services 
 Argentina 
Canada 
EC Australia 
New Zealand 
The Gambia    Canada 
Jamaica 
Tanzania Korea RP 
Mexico 
Singapore Benin Burkina Faso 
Paraguay 
U.S.  Jamaica 
Tanzania 
Burundi Burkina Faso EC 
Chinese  
   Taipei  
17 
 
Wholesale & retail trade, distribution Australia Turkey  Trinidad &  
    Tobago 
Korea RP 
Australia Venezuela 
Honduras 
Sri Lanka Japan 
 Tanzania 
El Salvador 
Honduras 
Bulgaria The Gambia 
Sri Lanka 
Chinese Taipei   
13 
Real estate Australia India 
  Canada 
Japan 
Australia  Trinidad &  
    Tobago   
5 
Energy Australia 
Turkey   Madagascar 
Costa Rica 
Slovak Rep. 
Guatemala Haiti 
Australia 
Sri Lanka Brazil Mongolia 
Nigeria 
Egypt China 
 The Gambia 
Egypt 
 Brunei D. 
Guatemala 
India 
El Salvador Bulgaria  
U.S.  
The Gambia Angola Bangladesh 
Canada 
  
 
22 
Other & unspecified sectors Australia 
New Zealand 
Morocco Turkey 
Tunisia 
  Australia 
Bangladesh 
Turkey Czech Rep. 
Uganda Canada Singapore 
Korea RP 
Costa Rica Dominica 
St. Kitt & Nevis 
Australia Venezuela 
Morocco 
Senegal Honduras Hungary 
Singapore 
Dominica Saint Lucia 
St. Vincent & G. 
Mauritania Dominican Rep. 
Burundi 
Senegal Honduras Brunei D. 
Czech Rep. 
Mauritius Slovak Rep. 
El Salvador 
The Gambia HK, China 
  
 
45 S/WPGR/W/25/Add.5 
Page 6  
 
  ¾   MEASURE   ¾ Direct grants Preferential 
credit & 
guarantees Equity 
injections Tax incentives Duty-free inputs 
&  
free zones Other &  
unspecified 
measures Number 
of  WTO 
Members2 
À    SECTOR     À         
Thailand 
Benin 
Burkina Faso 
Belize Suriname Jamaica 
Paraguay 
Egypt Trinidad &  
   Tobago 
Tunisia Guinea 
Malaysia 
Djibouti U.S. 
China 
Uganda  Thailand 
The Gambia 
Rwanda 
Burkina Faso Belize Suriname 
Jamaica  
Egypt Trinidad &  
   Tobago 
Tunisia Guinea 
Malaysia 
Djibouti Chinese Taipei 
 
 
1 Subsidy programme envisaged. 
2 Counting EC as one.  
Source : WTO Secretariat. 
  S/WPGR/W/25/Add.5 
 Page 7 
 
 
  ANNEX 
 
Content of Individual Trade Policy Reviews, March 2004 to March 2007  
Rwanda - WT/TPR/S/129  
 
P. 44, para. 93 and 94  
 Besides the incentives establishe d in the Investment Code, investors operating in ZEFs should 
pay only 10 per cent of corporate tax for the 10 years following the entry into force of Law No. 14/98.  They should also be exempt from duties and taxes on machinery, equipment and other inputs to production;  all other taxes normally levied on en terprises;  and withholding taxes and taxes on 
dividends.  Other advantages afforded to them include a one-stop service provided by the RIPA; 
flexibility in the grant of work permits;  and ex emption from duties and sales tax on locally produced 
goods and services purchased as inputs to their production processes. 
 To be eligible for these benefits, the ente rprises must contribute to the achievement of 
objectives such as:  the creation of "quality" jobs;  attracting modern technology and new investments;  
transfer of technology and skills;  diversification of exports;  utilization of locally produced raw 
materials;  and full integration into the economy.  Enterprises in ZEFs are required to export at least 
80 per cent of their production;  or to be engaged in the export of services .  The same benefits are 
granted to enterprises manufacturing under bond that export 100 per cent of their output.  Certificates 
of registration must be issued to investors within 10 working days. 
P. 70, para. 81
 
The State participates extensively in banking  activities and owns 86.75 per cent of CBR 
shares;  50 per cent of BK;  55.76 per cent of RDB;  69.02 per cent of the Mortgage Bank of Rwanda;  
2 per cent of UBPR, and 1 per cent of the African  Continental Bank in Rwanda (BACAR).  The 
Mortgage Bank is wholly State owned.4  Privatization of CBR and BACAR is under way.  UBPR 
receives indirect State aid, in the form of tax exem ptions, because of its role in poverty reduction, and 
in 2003, the World Bank provided US$50 million for th at purpose.  Foreign investors own 50 per cent 
of BK, 43 per cent of BANCOR, 34.11 per cent of RDB and 12.86 per cent of CBR. 
Singapore - WT/TPR/S/130 
 
P. 26, para. 34  
 In order to attract foreign investment, Singapor e feels that it is necessary to offer not just a 
stable macroeconomic and business environment for companies to operate in, but also a range of 
incentives.  Incentives for investment are provided mainly under two Acts, the Economic Expansion 
Incentives (Relief from Income Tax) Act (Cap 86) and the Income Tax Act (Cap 134).  The incentives 
usually include concessional corporate tax rates of between 5% and 15% (the normal rate is 22%) or 
corporate income tax exemptions, depending on the sch eme.  Several schemes also give tax breaks on 
income from royalties or relief from withholding tax on royalties, in an attempt to attract foreign 
investment in high-value-added sectors (Chapter  III(4)(ii) and Table III.7).  Non-tax incentives 
include grants for certain activities (at present especi ally those relating to promoted high-value-added 
                                                      
4 Another institution, the Savings Bank of  Rwanda, ( Caisse d'épargne du Rwanda),  has been 
liquidated. S/WPGR/W/25/Add.5 
Page 8  
 
  sectors), training, and R&D (Table AIII.4).  In addition, incentives are provided for investors in 
several services, including financial services, tourism, medi a services, and telecommunications  
(Chapter IV). 
P. 47, para. 70
 
In addition to Singapore's exte nsive tax concessions and ex emptions for investors in 
Singapore (section 4(ii) below), the Government , through IE Singapore (previously the Trade 
Development Board), provides tax concessions to comp anies engaged in international trade.  These 
include the Global Trader Programme (GTP), combin ing the previous Approved Oil Trader and the 
Approved Trader Incentive programmes, which provide  a concessional tax rate of 10% (the current 
corporate tax rate is 22%) for approved compan ies and approved commodities and products.  In 
addition, tax holidays and concessions are provided to  encourage other activities such as international 
shipping , cyber trading, and for local companies to globalize their activities.  Some overseas 
investment incentives are also provided (Table III.6). 
Table III.6 
Incentives offered by IE Singapore 
Scheme Eligibility Incentive 
Global Trader Programme (GTP) 
(formerly "Approved International/Oil 
Trader Scheme") Established international players in their 
industry and responsible for international 
trading, procurement, marketing and distribution of qualifying commodities and 
products Concessionary tax rates on international 
trading activities in approved commodities 
and products 
Approved International Shipping Enterprise Incentive (AIS) Established international shipping 
companies with worldwide networks and 
good track records Tax exemptions for 10 years on income 
from qualifying shipping  operations 
Approved Cyber Trader Programme 
(ACT) Companies conducting international 
business through the use of the Internet Concessionary tax rate of 10% of 
qualifying offshore income in qualifying 
products 
Double Tax Deduction for Market 
Development (DTD) All Singapore registered companies or 
companies that are permanently established 
in Singapore with the primary purpose of promoting the trading of goods or provision 
of services 
  Deduction against taxable income of twice 
the eligible expens es incurred in the 
following activities as covered by Section 14B of the Income Tax Act: 
- Participation in overseas trade 
 fairs/missions - Participation in approved local trade 
 exhibitions 
- Setting up of overseas marketing  offices 
- Master licensing and master 
 franchising - Advertising in approved local trade 
 publications 
- Printing of corporate brochures and  catalogues for distribution in overseas  markets 
- Engaging in market development 
 activities, i.e market surveys,  feasibility studies, advertising 
 campaigns, promotional campaigns, 
 design of packaging and  product/services certification 
Double deduction for overseas investment development expenditure Eligible manufacturing and services 
companies. Double deduction for qualifying 
expenditure incurred in approved feasibility studies and maintenance of 
overseas project offices against income  S/WPGR/W/25/Add.5 
 Page 9 
 
 
  Scheme Eligibility Incentive 
Overseas Investment  Incentive (Revised 
Overseas Investment Incentive will take 
effect 1 January 2004)  Singapore registered company having at 
least 50% of its paid-up capital beneficially 
owned by citizens or permanent residents of Singapore 
As of 1 January 2004 the scheme will be 
available to all Singapore registered and resident companies willing to commit to 
having a substantial home base in Singapore Under the revised programme approved 
Singapore-based companies may defer 
income tax due from their profitable operations in Singapore for two years if 
their approved overseas investment incurs 
operating losses during the first three years of the investment 
Regionalization Finance Scheme Singapore registered company with at least 
51% local equity and with fixed productive 
assets of not more than S$30 million.  If the 
company is involved in the provision of services, it must employ not more than 
200 employees Fixed-cost financi ng programme designed 
to assist local enterprises to globalize their 
operations.  Fixed-rate loans are available 
under the scheme for acquiring fixed asset for overseas projects 
Source:  Information provided by the authorities. 
P. 57, para. 99  
 Singapore continues to promote investment  in certain sectors or activities through tax 
incentives.  The incentives are provided under the Economic Expansion Incentives (Relief from 
Income Tax) Act and the Income Tax Act.  Singapo re is currently promoting high-skilled, research 
and development based activities.  Thus, in addition to previous long-standing programmes, such as 
Pioneer Status, whose role has evolved from deve loping the manufacturing sector to high-value-added 
industries, new programmes such as the R&D a nd IP management hub scheme, and tax concessions 
on royalties, have been developed to encour age companies into high technology activities 
(Table III.7).  Tax incentives are also offered to encourage services, including by the Monetary 
Authority of Singapore and the Singapore Tourism Board (STB) (Chapter IV). 
Table III.7 
Tax incentives offered by the Economic Development Board  
Scheme Eligibility Incentive 
Approved foreign 
loan schemea Company granted a minimum loan of S$200,000 
from a foreign lender for purchase of productive equipment Complete or partial exemp tion from withholding tax 
on interest payable to the lender 
Approved royalties 
incentivea Company paying royalties to a foreign partner Fu ll or partial exemption from withholding tax on 
royalties 
Development and 
expansion incentivea Firms engaging in new projects or expanding 
existing projects providing significant economic 
benefit for Singapore Concessional tax rate of 5% to 15% for qualifying 
income streams 
Double deduction for 
R&D expenditureb Eligible manufacturing and services companies 
engaged in R&D Double deduction for qualifying R&D expenses 
against income  
Investment allowance 
incentivea Proposed investment to be made within a 
qualifying period of not more than five years Exemption on a specified proportion of expenditure of 
new fixed investment in productive equipment 
International 
headquartersa Companies providing management and other 
approved headquarters-related services to 
subsidiary, associated or related companies in other countries on an international scale Concessional tax rate on income from providing 
qualifying HQ services to approved network 
companies 
Pioneer statusa New manufacturing and service investments 
introducing skills substantially more advanced than 
the average industry level Exemption from corporate income tax on qualifying 
profits for up to ten years 
Regional 
headquartersa Companies providing management and other 
approved headquarters-related services to 
subsidiary, associated or related companies in other countries on a regional scale Concessional tax rate of 15% on income from 
providing qualifying HQ servi ces to approved network 
companies for three years 
R&D and IP 
management hub 
schemea Companies engaging in R&D and/or intellectual 
property management activities from Singapore Exemption for a period of five financial years on 
foreign-sourced royalties or foreign-sourced interest 
remitted to Singapore to be spent on R&D S/WPGR/W/25/Add.5 
Page 10  
 
  Scheme Eligibility Incentive 
Tax concession on 
royalty income from 
approved inventions or innovation Individuals receiving royalty income arising from 
an approved invention or approved innovation Royalty income will be taxed (at 10%) on 10% of 
gross royalty or net royalty income (after deductions), 
whichever is lower 
Technopreneur 
investment incentivea Companies who invest in qualifying Singapore-
based technopreneurial start-up activity  An investor in an approved company can deduct losses 
incurred from selling shares in the approved company against its/his own taxable income 
Venture capital fund 
incentiveb Venture funds with activities in Singapore Partial or  full corporate tax exemption, for a set period, 
on income from divestment of shares, foreign dividend 
and foreign interest income 
Writing-down allowance for 
acquisition of know 
howb Companies engaging in Intellectual Property 
management activities in Singapore Allows amortization of ac quisition costs over five 
years for tax purposes 
Writing-down 
allowance for cost 
sharing agreementb Companies which have signed a genuine cost-
sharing agreement to cost -share the expenses for 
R&D Allows amortization over one to five years of cost-
sharing payments in R&D, which would otherwise not 
be deductible 
a Granted under the Economic Expansion Incentives (Relief from Income Tax) Act. b Granted under the Income Tax Act. 
Source:  Economic Development Board,  Government of Singapore. 
P. 68, para. 3  
Several services sectors have also been lib eralized although government linked companies 
continue to pervade the sector.  In banking, the Government decided in 1999 that it would open up the 
relatively closed domestic retail banking sector to  competition and removed foreign investment 
restrictions;  steps have also been taken to strengthen the supervisory and corporate governance 
frameworks.  In insurance, limits to entry by insurance companies and a foreign equity restriction of 
49% were removed.  More widespre ad reforms have been carried out in telecommunications, with full 
competition permitted as of 2000, two years earlier than  originally planned.  As a result, there has 
been a substantial decline in te lecommunication charges.  In transport  services, the Government has 
put in place several long- and short-term incentives to encourage growth in the sector and to assist its 
recovery from the SARS crisis in the region.  Another key sector affected badly by recent 
international developments is tourism; the Singapore Tourism  Board has responded by offering tax 
refunds, training, and other assistance for operators a ffected by the crisis.  Singapore is also trying to 
build up the health services sector, particularly to encourage its use by international patients; the 
number of foreign medical schools that are recognized by the Singapore Medical Council has increased, although the registration of foreign-traine d medical staff remains tightly regulated.  Legal 
services remain relatively closed to non-Singapo reans practising Singapore law, although some 
reform has taken place recently;  Singapore did not  make any commitments under the GATS in this 
area. 
P. 77, para. 33
 
Singapore continues to offer incentives to financial  institutions; these involve mainly 
corporate tax exemptions and concessional corporate ta x rates of 10% and 5% instead of the standard 
rate of 22% (Table AIV.2).  According to the au thorities, these incentives are used selectively  to 
develop high-value-added activities an d to facilitate the sector’s grow th.  Incentives are targeted at 
financial intermediaries and specific services rather than at customers.  Financial institutions (both 
foreign and national) may obtain these incentives as long as they are able to meet the qualifying 
criteria, including that most activities are carried out  in Singapore.  MAS monitors the effectiveness of 
all incentives through a series of post-implementation reviews.  The incentives contain sunset clauses;   S/WPGR/W/25/Add.5 
 Page 11 
 
 
  a comprehensive review must be undertaken and just ification provided to the Ministry of Finance for 
an incentive to be extended.5 
P. 92, para. 71 and 72  
Singapore is actively trying to strengthen its position as a regional aviation  hub.  The CAAS 
announced the Air Hub Development Fund (AHDF),  which will provide S$210 million worth of 
rebates and other incentives over three years.  This includes a 15% discount on aircraft landing fees 
and rental charges at Changi and Seletar Airpor ts, S$30 million worth of incentives to attract new 
airlines to Changi Airport and to encourage exis ting airlines to expand their network from Changi 
Airport, and S$50 million on traffic developmen t programmes and promotional activities with 
airlines.  The programme is expected to be in place for three years as of 1 January 2003.  In addition, 
visitors are encouraged to shop at Changi Airport through the Global Refund Airport Shopping 
Vouchers scheme, which provides a furthe r 10% on the refund value in GST refunds.6  It is not clear 
if airlines are granted corporate tax exemptions. 
To mitigate the effects of the downturn in tourism, temporary financial assistance was 
provided to airlines and passengers  in 2001 and 2002.  For example, a 15% discount on rental charges 
for all tenants at Changi Airport was introduced in 1 July 2001, followed by a 10% discount on 
aircraft landing fees on 15 October 2001;  both expired on 31 December 2002 but have now been 
replaced by the AHDF.  A S$44 million relief packag e was put in place to help airlines and airport 
businesses affected by the SARS outbreak.  More re cently, an Airlines Traffic Development Scheme 
offered financial incentives to airlines if they could bring more passengers to Singapore between 
June 2003 and October 2003; the size of the ince ntive was based on the increase in passengers. 
Incentives to aircraft leasing companies, which seem to have been provided at the time of the last 
Review, have been discontinued. 
P. 94, para. 79  
Section 13A of the Income Tax Act exempts from tax the income of a shipping  enterprise 
derived from the operation of Singapore ships.  The Approved International Shipping Enterprise 
Scheme, which provides a tax exemption for ten years on income derived from the operation of 
foreign-flag vessels is available for established international shipping companies with worldwide 
networks and good track records (Table III.6).  In an  attempt to encourage bunker suppliers to achieve 
a quality management system, the MPA is providing financial assistance for bunker suppliers who qualify for the Accreditation Scheme for Bunker Suppliers within a two-year period between 
1 June 2003 and 31 May 2005;  the assistance is in the form of a 30% relief on the certification fee for 
Technical Reference 8 (TR8):2003 on a quality ma nagement system for bunker supply (QMBS) 
chain.
7  In April 2002, the MPA created an S$80 million Maritime Cluster Fund (MCF) to help 
promote and strengthen the maritime cluster in Sing apore.  Around S$50 million of this has been set 
aside for training while S$30 million will be used to help shipping companies reduce operating costs 
in Singapore.8  The $50 million portion will be used, among other things, to fund various maritime 
training programmes to upgrade the expertise in the local maritime sector, and to set up maritime-
                                                      
5 This has resulted in the removal of some incentives, for instance the Tax Incentive for Credit Rating 
Agencies. 
6 CAAS Press Releases, 1 August 2002 [Onlin e].  Available at:  http://www.caas.gov.sg/caas/ 
press_release_content.jsp?DYNAMIC_FO LDER%3C%3Ef [4 November 2003]. 
7 The accreditation qualifications include:  having a minimum paid-up capital of S$200,000;  having in 
place a Quality Management System for Bunker Supp ly Chain (QMBS) based on Technical Reference 
8 (TR8):2003. 
8 MPA Singapore online information, "Maritime Clus ter Fund".  Available at:  http://www.mpa.gov.sg/ 
homepage/mcf-programs.html, [2 February 2004]. S/WPGR/W/25/Add.5 
Page 12  
 
  related professorships in the local universities.  Other assistance programmes include the Maritime 
Innovation and Technology (MINT) Fund a nd the Maritime Enterprise IT programme. 
P. 95, para. 83
 
Assistance is provided to ensure that ships  continue to use the Port of Singapore.  A 
concession of 20% on port dues offered to all cont ainer vessels in May 1996 remains in place and has 
been extended to 30 June 2004.  From 1 May 2003 to 31 December 2003, a 50% port dues concession 
was granted to cruise ships, regional ferries, and pa ssenger-carrying harbour craft to help them over 
the SARS crisis.  In addition, the PSA offered, fo r one year effective July 2002, a 10% discount on all 
bills at PSA Singapore's cargo terminals and a 50% discount on handling charges for empty 
containers. 
P. 100, para. 102  
To address the recent downturn, a number of measures were taken, including confidence 
building promotional programmes and a S$230  million assistance package announced on 
17 April 2003.  This included: pr operty tax relief;  approval for companies to keep receipts from 
services tax on tourism until 31 December 2003 (effec tively a tax remission);  a temporary freeze on 
foreign worker levies until December 20039;  a bridging loan facility;  and a manpower training fund.  
This assistance was in addition to the STB's other incentives for Singapore-registered entities.  These 
are: double tax deductions for overseas promotion activities; income tax allowance of 20% for 
building and structural expenditure for the first year of operation (2% thereafter) for tourism  projects; 
a tourism development assistance scheme, which pr ovides up to 50% support for market and cluster 
development activities; and a property tax concession for tourism projects with an investment of 
S$3million.  Efforts have also been made to lib eralize tourism and recreational activities and to 
provide easier access to Singapore through easier visa procedures. 
P. 124, table AIV.2  
 
Table AIV.2 
Incentives offered by the Monetary Authority of Singapore 
Scheme Eligibility Incentive 
Operational 
headquarters 
(OHQ) incentives Banks , merchant banks, 
securities companies, insurance 
companies, fund managers  Concessionary corporate tax rate of 10%  for five to ten years (renewable) 
for income from providing qualifying OHQ services to approved network 
and from conducting qualif ying finance and treasury on its own account.  
Tax exemption for dividend income from approved network companies 
and on dividends distributed from the OHQ for five to ten years 
(renewable) 
Double deduction for R&D 
expenditure Banks, merchant banks, securities 
companies, insurance companies  Double deduction for qualifying R&D expenses against income 
Tax incentive for 
Asian Current Unit 
(ACU) income Banks and merchant banks Concessionary tax rate  of 10% on income derived from offshore ACU 
activities with non-residents and other qualifying financial institutions in 
Singapore 
Tax exemption 
scheme for 
syndicated facilities Banks, merchant banks and 
securities companies Tax exemption for income derived from arranging, underwriting and 
participating in syndicated credit, guarantee and debt facilities which are 
arranged in Singapore and for which proceeds are used outside Singapore 
Tax incentive 
scheme for asset 
management 
(AFM) Fund managers Approved fund managers (AFMs) are accorded a concessionary tax rate of 
10% on fees and commissions deri ved from any funds managed, 
investment advisory services provided,  or loans of securities arranged by 
the AFMs in Singapore Income from foreign investors for an y designated investments from funds 
managed by or as a result of investme nt advisory services provided by any 
                                                      
9 The foreign unskilled worker levy  ranges from S$240 to S$470 per month; the levy is S$30 per 
month  for skilled workers.   S/WPGR/W/25/Add.5 
 Page 13 
 
 
  Scheme Eligibility Incentive 
fund manager in Singapore will be exempt from tax 
Tax incentive 
scheme for 
approved trustee 
companies (ATC) Trustee companies Concessionary tax rate of  10% granted to companies and financial 
institutions on selected income streams from trust administration and 
custodian services offered in Singapore 
Investment income generated by foreign trusts exempt from tax 
Tax incentive 
scheme for bond 
market activities Banks, merchant banks, securities 
companies, insurance companies  Tax exemption  for fee income from arranging, underwriting and 
distributing qualifying debt securities 
Interest income from qualifying debt s ecurities paid to financial institutions 
and corporations in Singapore taxed at  10%;  interest from qualifying debt 
securities payable to non-residents ex empt from withholding tax; income 
from trading in any debt securities ta xed at 10%;  income from trading in 
Singapore Government securities by primary dealers exempt from tax 
Approved bond 
intermediary (ABI) 
scheme Banks, merchant banks, securities 
companies, insurance companies Once a financial institution has been  accorded ABI status, all debt 
securities lead managed by it woul d be treated as qualifying debt 
securities.  The followi ng tax incentives apply: 
(i)  The ABI will be exempt from tax on fee income earned from arranging, 
underwriting and distributing the securities; 
(ii)  The debt securities arranged by  ABIs will be considered qualifying 
debt securities and automatically be  eligible for the applicable tax 
incentives 
Tax incentive scheme for equity 
capital market intermediary (ECMI)  Banks, merchant banks and 
securities companies A concessionary tax rate of 10% will be granted to ECMIs on income 
derived from activities de nominated in foreign curre ncy relating to foreign 
securities or companies and from th e provision of corporate advisory 
services relating to financial matte rs to persons outside Singapore. 
A concessionary tax rate of 5% will al so be accorded to income derived by 
ECMIs from services rendered for non-residents or foreign companies in 
relation to transactions on the Singapore Exchange 
Tax incentive 
scheme for 
approved 
derivatives trader 
(ADT)  Banks, merchant banks , securities 
companies A concessionary tax rate of 5% will be granted for income derived from 
qualifying derivatives services and transactions undertaken by a 
financial institution granted the A pproved Derivatives Trader (ADT) 
status.  Payments on qualifying derivatives made by ADTs to non-
residents will also be exempt from tax 
Tax incentive 
scheme for 
approved new derivative products 
traded on 
the Singapore Exchange (SGX)  SGX corporate members Concessionary tax rate of 5% will be accorded to the total income from 
transactions in each approved ne w product derived by qualifying SGX 
corporate members (to qualify for this  concessionary tax rate, the SGX 
corporate member must be ranked amongst the top 20 trading members for 
that product) 
Tax incentives for finance and 
treasury centres (FTC) Corporates  Concessional rate of 10% on fee income received from the provision of 
financial and treasury services to a pproved network companies and income 
from conducting tradi ng and other treasury activities on FTCs own 
account.  Interest paid on foreign currency denominated loans from 
network companies and banks outside Singapore may also be exempt from 
withholding tax 
Tax incentive for 
offshore insurance 
business Insurance companies Concessional tax rate of 10% on income from writing offshore insurance 
business 
Tax incentive for approved marine 
hull and liability insurer scheme Insurance companies Tax exemption for income derived by approved ma rine hull and liability 
insurers from writing marine hull and liability insurance business 
Scheme for tax-deductible special 
reserves Insurance companies General insurers can now cl aim tax deduction for special reserves set aside 
for certain offshore risks 
Financial sector 
incentive scheme 
(FSI) 
 From 1 January 
2004, this incentive 
would replace the following seven tax 
incentives: 
- ABI Companies carrying out the 
prescribed qualifying activities in 
Singapore would be eligible to 
apply for the FSI Income derived from FSI standard-tier qualifying activities taxed at 10%, 
subject to a qualifying base taxed at  the prevailing corporate tax rate 
Income derived from enhanced tie r qualifying activities taxed at 5% S/WPGR/W/25/Add.5 
Page 14  
 
  Scheme Eligibility Incentive 
- ACU 
- ADT 
- AFM 
- ECMI - OHQ 
- Syndicated 
 facilities 
Source:   Monetary Authority of Singapore.  
Benin - WT/TPR/S/131 
 P. 20, para. 35
 
The scope of the Investment Code covers  the following: industrial processing; rural 
development (agriculture, livestock breeding, fishing, aquaculture, forestry); tourism  and hotel 
services; industrial maintenance; electronic a nd mechanical assembly; cultural, artistic and 
audiovisual  production (discs, pressing, tapes and production of cinematographic films); 
environmental protection activities; supply of services relating to health , education , public works and 
handicrafts.10 The following activities are excluded:  pur chase of goods for resale without processing; 
repackaging and wrapping of finished products; supply  of services other than those listed in Article 1 
of the implementing decree; and activities that have  a negative impact on the environment and health. 
Burkina Faso - WT/TPR/S/132 
 
P. 16, para. 35  
In addition to the ordinary law regime, the cu rrent Investment Code includes six privileged 
regimes applicable to enterprises engaged in pro ducing, conserving and processing goods; enterprises 
providing health , hotel and tourism  services, construction  and public works, communications  and 
cinemas , sanitation , industrial maintenance, transport , and intellectual and/or technical expertise; 
and export enterprises. Enterprises engaged in mini ng exploration and operations are governed by the 
Mining Code (Chapter IV(3)(iv)).11 
Mali - WT/TPR/S/133 
 
P. 65, para. 69  
Mali has considerable potential for leisure tourism  (notably the Dogon country, Timbuktu, 
Djenné, Gao, Mopti, Ségou, Sikasso, Kayes and Kidal)12, but this potential is difficult to exploit 
because of the high cost of air tickets to Mali and transport problems within the country.13 In order to 
encourage the development of the tourism sector , a Tourism and Hotel Investment Code grants 
potential investors concessions such as exempti on from the business tax, the tax on industrial and 
                                                      
10 Article 1 of Decree No. 98-453 of 8 October 1998 defining the provisions for implementing Law 
No. 90-002 containing the Investment Code, amended by Law No. 90-033. 
11 Law No. 023/97/AN of 22 October 1997. 
12 http://www.tourisme.gov.ml/. In general, 60 per cent of leisure tourists visit the Dogon country, 
Timbuktu, Djenné, Gao and Mopti. 
13 Economic Mission, Embassy of France (2002f).  S/WPGR/W/25/Add.5 
 Page 15 
 
 
  commercial profits (BIC) and customs duty on equipment.14 Tourism establishments and travel agents 
must obtain an authorization to engage in the activity from the single window (Chapter III(3)(iii)(e)).
15 
Belize - WT/TPR/S/134  
 P. 51, para. 99, 100 and 103
 
 The Fiscal Incentives Act provides full or par tial exemptions from import duties and income 
taxes on investments by new or existing enterprises.  According to the authorities, the duration of the 
incentives is determined in case-by-case negotiations w ith the firms.  They indicated that, since 1998, 
exemptions have been granted from import duty an d revenue replacement duty but not from other 
taxes. 
Foreign and domestic firms may qualify for incentives under the Act.  Qualification 
requirements for small and medium-sized enterpri ses, as defined in the Fiscal Incentives Act, differ 
from those for other companies (Table III.8).  Small and medium-sized enterprises must be net foreign 
exchange earners, and may only benefit from incentiv es if their activity is in one of the following 
areas:  agriculture and forestry;  agri-processing;  auto rental;  arts and cultural activities;  computer 
and information technology ;  fishing, operation of fish hatcheries and fish farms and service 
activities incidental to fishing ;  health care services ;  hotel, restaurant and other tourism  services;  
manufacturing;  and handicraft, woodcarving, and jewellery making.  The Act defines a small or 
medium-sized enterprise as an enterprise with an  annual turnover of less than BZ$500,000;  net worth 
of BZ$300,000 or less;  and an investment in machinery not exceeding BZ$300,000, among other 
criteria. 
 As at April 2002, 112 companies were receiving incentives under the Act.  Some 40% of 
these companies were involved in tourism and tourism-related activities.16  According to the 
authorities, the Fiscal Incentives Ac t has contributed substantially to the growth of the Belizean 
economy by promoting investment and production.   Between September 1998 and early 2004, the 
Fiscal Incentives Act resulted in almost US$300 million in investment.  The authorities also noted that 
the programme has contributed positively to em ployment, especially in non-traditional crops 
and value-added products.  On the other hand, they estimate that the total revenue forgone as a result 
of the tax and duty exemptions under the Fi scal Incentives Act is BZ$3.1 million for 2003. 
P. 60, para. 148  
In addition to duty and tax exemptions, certa in businesses registered in Belize can benefit 
from financial assistance available through the gove rnment-owned Development Finance Corporation 
(DFC).  Assistance is in the form of preferen tial loans and is available to companies in the 
agricultural, fisheries, industrial, and tourism  sectors.  Between 2001 and 2003, the DFC approved 
some BZ$27 million in loans;  close to three quarter s went to the agriculture sector, and 20% to the 
industrial sector. 
                                                      
14 Law No. 02-015 of 3 June 2002. 
15 Decree No. 96-128/P-RM of 18 April 1996 on the approval and operation of  tourism establishments, 
Decree No. 96-144/P-RM of 3 May 1996 on conditions for engaging in the profession of travel agent; Decree 
No. 96-030/P-RM of 25 January 1996 laying down the administrative formalities for creating enterprises; and Decree No. 96-129/P-RM of 18 April 1996 setting the conditions for engaging in the profession of tourist guide. 
16 WTO document G/SCM/N/71/BLZ/Suppl.1, 7 March 2002. S/WPGR/W/25/Add.5 
Page 16  
 
  P. 90, para. 132
 
The authorities note that fiscal incentives are offered for the further development of the 
tourism  sector (Chapter III(3)(iv)), and further fiscal  incentives are being considered (as at March 
2004). 
Suriname - WT/TPR/S/135 
 
P. 20, para. 36  
The Government's MOP 2001-2005 defines several  policy initiatives aimed at supporting the 
development of the private sector in general.17  In view of the shortfall in domestic savings, the small 
size of the domestic market, the lack of tec hnical and managerial skills, and the underdeveloped 
capital market, the plan has placed particular emphasis on attracting foreign investment.18  Among the 
various policy measures identified to achieve this is  the reform of Suriname's investment law to 
provide greater scope for the granting of investme nt incentives.  To this end, a new law, the 
Investment Law 2001, was adopted in June 2002.  The Investment Law 2001 applies to a broader 
range of sectors than its precursor:  agriculture, cattle -breeding, fishery, aquaculture, mining, forestry, 
tourism  (except casino's), industry, trade, construction , services, and transport . 
European Communities - WT/TPR/S/136  
 
P. 76, para. 126 and 127  
The legislative environment governing the award of  state aid in the EC has remained largely 
unchanged since its last TPR. In accordance with th e provisions of the EC Treaty, state aid that 
distorts intra-Community competition is prohibited.19 However, under certain circumstances, 
exceptions to this prohibition may be applied for the purposes of regional development; certain 
horizontal objectives, such as supporting small and medium-sized ente rprises, research and 
development, environmental protection, rescue and restructuring of firms in difficulty, employment, 
and training; and specific sectors, including coal and steel20, synthetic fibres, motor vehicles, ship 
building, agriculture, fish eries and aquaculture, and transport . The current focus of policy is the 
reduction of the levels of state aid and its redir ection towards horizontal objectives, as confirmed at 
the Brussels European Council meeting in March 2003.21 
During the period under review, the Commission adopted a block exemption regulation on 
state aid for employment.22 The regulation permits EC public authorities to provide aid to enterprises 
to increase their levels of employment, in particul ar, of workers from certain specified disadvantaged 
categories23; however, the aid granted should not adversely affect trading conditions in the common 
                                                      
17 Government of Surimane (2001), pp.37-38. 
18 Government of Surimane (2001), pp.39-40. 
19 Article 87. 
20 Communication from the Commission concerning cert ain aspects of the treatment of competition 
cases resulting from the ECSC Treaty, OJ C 152, 26 June 2002. 
21 COM (2003) 225 final, 30 April 2003 [Online] . Available at: http://europa.eu.int/comm/competition 
/state_aid/scoreboard/2003/en.pdf.  
22 Regulation No. 2204/2002, 12 December 2002. 
23 Commission Regulation No. 2204/2002, article 2(f), 12 December 2002.   S/WPGR/W/25/Add.5 
 Page 17 
 
 
  market. Other sector-specific state aid rules adopted relate to the film industry24, ship building, and 
the steel and coal sectors (following the expiry of  the ECSC Treaty). Furthermore, a multisectoral 
framework on regional aid was adopted to create great er transparency and to reduce the overall level 
of subsidies for large investment projects. 25 
P. 78, table III.12  
Table III.12 
EC State aid by sector, 2001b 
(Per cent) 
 EC-15 Membersa 
Type EU B DK D EL E F IR I L NL A P FI S UK 
 
Manufacturing 25 18 26 33 35 22 21 35 33 11 15 24 17 16 20 12 
Tourism 0 0 - 0 - 0 - 2 1 - - 1 1 - - 0 
Financial services 2 - - 0 - - 10 8 - - - - 1 - - - 
Media, culture and services 1 0 1 0 0 1 2 2 0 2 1 - 39 1 6 1 
Employment and training in 
manufacturing and services 3 5 23 0 - 11 0 7 1 - 0 1 16 1 1 11 
Transport 46 66 41 40 46 28 40 27 56 74 62 31 2 17 51 64 
Agriculture and fisheries 15 11 9 9 18 16 21 18 10 13 22 42 25 65 21 11 
Coal 7 - - 18 - 22 6 - - - - - - - - 1 
a B:  Belgium;  DK:  Denmark;  D:  Germany; EL:  Greece;  E:  Sp ain;  F:  France;  IR:  Ireland;  I:  Italy;  L: Luxembourg;    
 NL:  the Netherlands;  A:  Austria;  P: Portugal;  FI:  Finland;  S:  Sweden;  UK:  the United Kingdom. 
Source : COM (2003) 225 final. 
P. 130, para. 131  
 On 29 October 2003, the Commission adopted new Guidelines on State Aid to maritime 
transport , aimed at further ensuring a favourable tax environment for ship owners to counter 
international competition by open registers and flag s of convenience. The Gu idelines follow the same 
approach as the previous 1997 version, but include, inter alia , clearer provisions on seafarers tax 
exemptions26; a modified flag-link principle for tax arrangements27; and new specific rules for short 
sea shipping.28 
 
 
                                                      
24 Communication from the Commission on certain legal aspects relating to cinematographic and other 
audiovisual works, OJ C 43, 16.2.2002, p. 6-17. 
25 OJ C 70, 19.3.2002, p. 8-20. 
26 Tax exemptions are granted to a ll seafarers, irrespective of their nationality or residence. However, 
for seafarers serving on board ships that provide regular passenger services between ports of the EC, such schemes only apply to EC/EEA citizens (European Commission Press Release IP/03/1484, 30 October 2003). 
27 The flag-link principle is the requ irement that ships fly the flag of a member State to qualify for state 
aid. For this purpose, shipping companies operating less than 60% of their tonnage under an EC flag will have to maintain at least the same tonnage under the flag when the new Guidelines enter into force (European 
Commission Press Release IP/03/1484, 30 October 2003). 
28 Aid may be granted for the launching phase of new services, and must permit transport (of cargo 
essentially) by road to be carried out wholly or partly by sea. Aid is for a maximum of three years (European 
Commission Press Release IP/03/1484, 30 October 2003). S/WPGR/W/25/Add.5 
Page 18  
 
  Republic of Korea - WT/TPR/S/137 
 
P. 14, para. 5
 
Korea's relatively liberal FDI regime has be nefited the economy.  Foreign firms play an 
increasingly important role and are seen as an essentia l source of export growth.  All kinds of FDI are 
allowed, including establishment, stock acquisitions, mergers (including hostile), and long-term loans.  
Sectoral restrictions on FDI have been relaxed.  Only radio and television br oadcasting, plus rice and 
barley growing, are wholly closed to FDI.  Severa l, mainly infrastructure, sectors are partially closed 
and have foreign equity limits.  Korea provides ta x and other incentives to attract FDI, including in 
advanced technology activities, and in manufacturing, logistics , and tourism  activities located in 
various types of designated zones.  Investment incentives are being extended, including through the 
creation of three Free Economic Zones (FEZs) in  2003 (Incheon, Busan, and Gwangyang ports).  A 
negotiable cash rebate was also introduced for foreig n investors in 2004.  On the other hand, income 
tax holidays are to be reduced from ten to seven  years from 2005, as incentives become available to 
more foreign investors. 
P. 34, para. 62 and 63  
Korea continues to provide a range of mainly tax incentives for FDI.  These generally consist 
of:  full and partial corporate income tax concessions for up to a total of ten years;  similar concessions on various local taxes (acquisition, prope rty, registration, and land taxes);  and full 
exemptions from customs duties (customs, special excise, and value-added taxes) on imported capital 
goods for up to three years.  They apply to "greenfi eld" FDI and foreign stock acquisitions in eligible 
advanced technology investments and industry-suppo rting service industries;  there are no minimum 
FDI levels for these tax incentives.  The number of eligible industries was raised from 578 to 634 in 
July 2003 (FIPA and the Special Tax Treatment Control Law of 1999).   
Korea also operates an elaborate system of zon es to provide tax and other incentives, such as 
rent subsidies on state land.  Certain FDI cond itions for receiving tax incentives when locating in 
foreign investment zones (FIZs) we re also relaxed.  The requirement to employ a minimum number of 
local employees was removed from 2004, and minimu m FDI levels lowered from:  US$50 million to 
US$30 million for manufacturing;  US$30 million to US$20 million for tourism ;  and from 
US$30 million to US$10 million for logistic  businesses.  Smaller-scale FDI in high-technology and 
manufacturing-assisting service businesses also became elig ible for FIZ status in 2003.  Since its last 
Review, Korea has extended its system of zones to provide wider access to such incentives, mainly 
aimed at trying to attract FDI to offset its recent decline.  New zones, called free economic zones 
(FEZs), were formed to induce FDI through eased regulations, improved living conditions for 
foreigners, and enhanced tax incentives.
29  These apply to "greenfield"  FDI in manufacturing, high-
technology, logistics, and tourism activities located  in FEZs, subject also to reduced minimum FDI 
levels from 2004 (Table II.4).  The port city of Incheon was designated an FEZ in August 2003, and 
Busan and Gwangyang ports in October 2003.   The FEZ Committee oversees the implementation of 
FEZs (Presidential Decree of the Free Economic Zone Act, 2002). 
                                                      
29 MOCIE (2003), p. 8.  S/WPGR/W/25/Add.5 
 Page 19 
 
 
  Table II.4 
Main FDI tax incentives 
Tax criteria Tax incentivesa  Conditionsa 
High technology businesses 
(FIPA & Special Tax 
Treatment Control Law, 1999, 
as amended)  - declared eligible industry by 
Finance Ministry  Corporate income tax:  full exemption for first 
7 years of profit & 50% reduction for next 3 
years 
Local taxes (acquisition, property, registration & land) full exemption for first 5 years and 
50% reduction for next 3 years (local 
governments can extend for up to 15 years) Customs duties, special excise & value-added 
taxes: full exemption on imported capital 
goods (extendable for 3 years with Finance Minister's approval) 634 eligible industries, including 111 industry-
supporting service businesses 
 - increased from 568 eligible businesses in 
July 2003 
Foreign Investment Zone (Foreign Investment Promotion 
Act, 1998) 
 - designated by regional governments subject to 
approval by Foreign Investment 
Committee Corporate income tax:  full exemption for first 
7 years of profit & 50% reduction for next 3 
years 
Local taxes (acquisition, property, registration & land) full exemption for first 5 years and 
50% reduction for next 3 years (local 
governments can extend for up to 15 years) Customs duties, special excise & value-added 
taxes: full exemption on imported capital 
goods (extendable for 3 years with Finance Minister's approval) Manufacturing (installing new or additional 
factory facilities)  in newly developed FIZ:  
 - FDI of at least US$50 million & FDI ratio of 
50% or more with 1,000 local employees or more 
Manufacturing in existing industrial complex:  
 - FDI of at least US$30 million & at least 300 local employees 
Tourism (new FDI notified by end-2003 & 
completed by end-2005):  
 - hotel/waterfront hotel/international 
convention 
 - FDI of at least US$20 million  - recreation/leisure/ente rtainment park facility 
 - FDI of at least US$30 million 
Logistics (composite freight terminal/operation of logistics hub and harbour facilities): 
 - freight transportation/handling/consignment 
and warehousing/freight terminal facility/freight transportation arrangement/logistics co mmissioner or agent 
 - FDI of at least US$30 million 
Free Economic Zone (Free 
Economic Zone Act, 2002) 
 - three ports designated Corporate income tax:  full exemption for first 
7 years of profit & 50% reduction for next 3 
years 
Local taxes (acquisition, property, registration & land) full exemption for first 5 years and 
50% reduction for next 3 years (local 
governments can extend for up to 15 years) Customs duties, special excise & value-added 
taxes: full exemption on imported capital 
goods (extendable for 3 years with Finance Minister's approval) 
Corporate income tax:  full exemption for first 
7 years of profit & 50% reduction for next 2 years 
Local taxes (acquisition, property, registration 
& land) full exemption for first 5 years and 
50% reduction for next 2 years (local 
governments can extend for up to 15 years) 
Customs duties, special excise & value-added taxes: full exemption on imported capital 
goods (extendable for 2 years with Finance 
Minister's approval) Manufacturing: 
 - FDI of at least US$50 million 
Hi-tech & manufacturing-assisting services:  
 - FDI of at least US$30 million Logistics: 
 - FDI of at least US$30 million 
Tourism:  
 - FDI of at least US$20 million 
 
  
Manufacturing: 
 - FDI of at least US$10-50 million Hi-tech & manufacturing-assisting services: 
 - FDI of at least US$10-30 million 
Logistics:  - FDI of at least US$10-30 million 
Tourism: 
 - FDI of at least US$10-20 million 
a As from 2004, the minimum FDI limits on new projects were  reduced from US$50 million to US$30 million for manufacturing, 
from US$30 million to US$20 million for tourism, and from US $30 million to US$10 million for l ogistic businesses.  The 
minimum requirement for local employees was also removed.  A negotiable cash rebate of around 10% of the FDI amount was 
also introduced in 2004 for investment in high-tec hnology projects exceed ing US$10 million and in  R&D facilities exceeding 
US$5 million.  It was also announced that the ten-year inco me tax concession would be redu ced to seven years (100% for 
five years and 50% for two years) from 2005. 
Source: The Korean authorities . S/WPGR/W/25/Add.5 
Page 20  
 
  P. 70, para. 134 and 137
 
SMEs still benefit substantially from tax incentiv es, despite recent changes (e.g. abolishing 
tax deductibility of investment reserves set asi de for losses and lowering special income tax 
concessions from end 2003).  Incentives include:  tax credits of 3% of investments in machinery and 
equipment;  and an income tax holiday (half the rate  for six years) for new SMEs located outside the 
Seoul metropolitan area (property tax on business assets is  also reduced by half for five years and the 
acquisition and registration taxes abolished for two years).  Special income tax incentives of a 15% 
rate reduction (10% if located in metropolitan areas)  also apply to SMEs in many activities, including 
manufacturing, fishing, tourism , stock raising, and telecommunications .  SMEs in wholesale, retail, 
medical services , or auto repairs  located in non-metropolitan areas re ceive a 5% rate reduction.  
SMEs also receive larger tax incentives generally ava ilable to all activities.  For example, they receive 
much larger tax credits for certain investment, such as in technology and human resource development. 
 Two major public institutions, the Industr ial Bank of Korea (IBK) and the Korean 
Development Bank (KDB), play a substantial role in  industrial development.  Although they are run 
commercially, the Government, while having no di rect control over their lending programmes, 
influences their management, operations and policies,  and tends to use them as an arm of industry 
policy.
30  Government guarantees any losses.  Following the Asian financial crisis, both banks  
received substantial government capital injections  to boost their capital adequacy ratios (IBK of 
W 1.7 trillion in October 1998 and of W 100 billion in January 1999, and KDB of W 3.050 trillion in 
2001). 
P. 97, para. 67  
Government-led financial restructuring occurre d immediately after the crisis in 1998, and 
from September 2000.  Total public funding for fina ncial sector restructuring to end-September 2003 
was W 161 trillion, equivalent to one  quarter of GDP (Table IV.4)31;  the Government directly 
contributed W 19 trillion.  Just over half of total public funding was for bank  restructuring;  most 
(one-third) was used by the Korea Deposit Insura nce Corporation (KDIC) to re-capitalize financial 
institutions, including insurance  and securities companies, and a bout one quarter by the Korea Asset 
Management Corporation (KAMCO) to purchase distressed assets and reduce exposure to non-
performing loans (those classified as substandard or below (SBLs)).  A substantial share of public 
funds (40%) have also been used  to repay deposits in non-bank ins titutions; no such repayments have 
been made on bank deposits.  Use of public funds  declined rapidly, to W 5.8 trillion in 2003 (until 
end-September).  KAMCO's mandate to purch ase bad loans ended in November 2002.   
                                                      
30 For example, each fiscal year during the work approval process, the Government regulates the 
financing and scale of their lending programmes.  
31 As at end 2003, some one third of these funds had been recovered.  The long-term recovery rate is 
expected to be 56%.    S/WPGR/W/25/Add.5 
 Page 21 
 
 
  P. 98, table IV.4  
 
Table IV.4 
Use of public funds for financial sector  restructuring, as at end-September 2003 
(W trillion) 
Korea Deposit Insurance Corporation (KIDC) 
Institution Repayment 
of deposits Re-
capitalization Compensation 
for losses Asset 
purchases KAMCO Government Total 
Aggregate injection of funds from end-1997 to end-September 2003  
Banks 0 22.2 13.8 8.1 24.6 18.1 86.7 
Non-banks 29.2 25.4 3.3 0.9 14.5 0.9 74.3 
Merchant banks 17.2 2.7 0.2 0 1.6 0 21.7 
Securities companies 0 6.8 0 0 1.8 0.9 9.5 
Insurance companies 0 15.9 2.9 0.3 1.8 0 21.0 
Investment trust 
management 
companies 0 0 0 0 6.6 0 6.6 
Mutual saving banks 7.3 0 0.2 0.6 0.2 0 8.2 
Credit unions 4.7 0 0 0 0 0 4.7 
Others 0 0 0 0 2.4 0 2.4 
Total 29.2 47.6 17.1 9.1 39.1 19.0 161.0 
Injection of funds during January 2002 to end-September 2003 
Banks 0 0.1 0.1 1.1 0.1 0 1.4 
Non-banks 3.5 0 0.6 0 0.2 0 4.3 
Merchant banks 0 0 0.2 0 0 0 0.2 
Securities companies 0 0 0 0 0 0 0 
Insurance companies 0 0 0.4 0 0 0 0.4 
Investment trust 
management 
companies 0 0 0 0 0.2 0 0.2 
Mutual saving banks 0.8 0 0.1 0 0 0 0.9 
Credit unions 2.7 0 0 0 0 0 2.7 
Others 0 0 0 0 0.1 0 0.1 
Total 3.5 0.1 0.8 1.1 0.3 0 5.8 
Source:  Korean authorities.  
P. 111, para. 123  
Market access to the passenger road transportatio n sector is regulated.  The main barriers to 
entry apply to major "route" buses and taxis where new entrants are subject to an economic needs test.  
Local governments set bus and taxi fares based mainly on costs.  Bus companies  receive partial 
subsidies for losses in the form of matching centr al-local government funds, and along with taxi 
operators, are partially exempt from fuel taxes.  Th e State is not involved in the trucking (cargo) 
sector.  The Trucking Transport Business Act was am ended in January 2004 to tighten entry barriers 
by moving from a registration to a permit system.  The Ministry grants permits to new entrants or for 
incumbents to expand operations using an ec onomic needs test, aimed at matching demand and 
supply.  Cargo charges have been deregulated since 1998, except for rescue/salvage and special 
towing services.  These charges must be reported (filed) to the Ministry.  Trucking operators  are 
also partially exempt from fuel taxes.  No foreign investment restrictions apply to the trucking sector. S/WPGR/W/25/Add.5 
Page 22  
 
  Jamaica - WT/TPR/S/139 
 
P. 62, para. 105
 
 The EIEA provides income tax and duty relief for companies exporting 100% of their 
production to non-CARICOM markets, with the possibility of carryi ng forward losses incurred during 
that period for a further six years.  Manufacturers exporting at least 5% of their production to non-
CARICOM countries also qualify for tax relief;  the le vel of the relief is proportional to the level of 
export sales.  In addition, the  Minister in charge of the industry can declare a product to be an 
"approved export product";  in this case any compa ny that produces or intends to produce the products 
may benefit from EIEA incentives.  A company manufacturing an approved export product is under 
supervision of the Customs Department and is c onsidered to be a private warehouse within the 
meaning of the Customs Law.  The EIEA was initia lly confined to manufacturing companies, but, in 
2001 services  were included under the scheme.  The activiti es of EIEA beneficiaries are monitored by 
Customs.  The estimated revenue forgone under the EIEA for 2000 (the most recent year available) 
was US$2.7 million, covering exports of a value of US$109 million.32  As at July 2004, there were 
three beneficiaries of the scheme. 
P. 63, para. 107  
 The Foreign Sales Corporation Act grants fiscal incentives to foreign sales corporations 
exporting to the United States, on imports used in  the production of exports , and on qualified income 
generated in foreign trade transactions.  
Table III.6 
Legislation notified as containing export subsidies 
Legislation Sectors Beneficiaries/requirements Concessions/time limits 
Export Industry 
Encouragement 
Act (EIEA) Manufacturing 
and services Manufacturing companies exporting 100% 
of the production of the approved product 
to non-CARICOM markets;  services providers servicing clients in non-
CARICOM countries Full income tax relief on profits or gains.  Full 
relief from import duties, excise duties and GCT on 
raw materials and capital goods. Time limit:  10 years 
 
  Partial exporters (producers exporting a 
5% threshold to non-CARICOM 
countries) Tax relief proportional to the level of export sales.  
Time limit:  .. 
Industrial 
Incentives 
(Factory 
Construction) 
Act Manufacturing Approved builders constructing  factories 
to be leased or sold to manufacturers or 
service providers operating under the 
EIEA; Free Zone developers Total relief from import duties and GCT for articles 
for factory construction and for repairs of factories.  
Exemption from income tax on earnings from 
factory leasing, or from profits made on sales. 
Time limit:  15 years 
 
Foreign Sales 
Corporation Act Services Foreign sales corporation exporting to the 
United States Total relief from import duties, stamp duty and 
retail sales tax on imports of machinery, equipment 
and raw materials   Exemption from income tax 
(including company profits tax and additional 
company profits tax) in re spect of income arising 
from foreign trade transactions.  Exemption from 
income tax on dividends paid to foreign share-
holders, on interest on loans or deposits and other approved investments ac tivity, and on qualified 
income generated in foreign trade transactions for 
up to 5 years. Time limit:  15 years (extendable for 15 years) 
 
 
                                                      
32 WTO document G/SCM/N/99/JAM, 3 July 2003.  S/WPGR/W/25/Add.5 
 Page 23 
 
 
  P. 72, table III.8  
 
Table III.8 
Fiscal incentives available in Jamaica 
Legislation Beneficiaries/requirements Concessions/time limits 
Foreign Sales 
Corporation Act Foreign sales corporations  Exemption from income tax 
Exemption from customs duty,  stamp duty and retail tax 
on imports of equipment, machinery or materials 
Time limit: indefinite  
Industrial Incentives Act Enterprises manufacturing a pproved products Exemption from taxes on dividends 
Customs duty relief of 50% or 100%  Time limit:  up to 10 years 
 
Urban Renewal (Tax 
Relief) Act Persons or organizations that facilitate or carry 
out urban development in depressed areas Exemption from income tax, stamp duty, and transfer 
tax. 
Time limit: not specified  
Co-operative Societies 
Act Registered cooperatives societies Exem ption from income tax and stamp duty 
Time limit: not specified 
 
Income Tax Act Enterprises in various sectors In itial allowance of 20% of the cost of industrial 
buildings, plant and machiner y for the year of their 
acquisition 
12.5% allowance of the cost of motor vehicles Investment allowance of 20- 40% of capital expenditure 
(basic industries only) 
Special allowance on machinery and equipment used on 
two or more shifts per day (specified industries only) 
Special investment allowan ce of 40%, with a write-off 
period of 17 years (sugar industry only) 
Special investment allowan ce of 40%, with a write-off 
period of 11 years (other agricultural products) 
Special capital allowance scheme for plant and 
machinery (rates of allo wance determined by the 
Commissioner of Mines) (mining sector only) 
 
Income Tax Act – 
Accelerated 
Depreciation Programme All manufacturing companies 
All companies that derive at least 20% of their 
income from exports, including companies engaged in promoting data processing  and 
systems development Deduction from income of 50% of the full cost of any 
new machinery in the year of purchase and another  
50% the following year 
 
Time limit:  2 years  
Modernization of 
Industry Programme 
 Investors providing necessary support, service or 
raw materials to export manufacturers; or being (or planning to be) involved in export activities 
Enterprises in manufacturing and tourism  Exemption from GCT on imported machinery and 
equipment for the modernization and retooling of factories 
Time limit:  not specified 
 
Bauxite and Alumina 
Industries 
Encouragement Act Businesses engaged in the mining of bauxite or 
the production of alumina Total tariff relief for the importation of capital goods, 
lubricating oils, grease, and chemicals 
Exemption from GCT and SCT on lubricating oils, 
grease, and other products. 
Time limit: indefinite 
 
Petroleum Refinery 
Encouragement Act Registered oil refiners Duty-free impor ts of articles for the construction and 
operation of the refinery, and for manufacturing 
petroleum products 
Exemption of income tax a nd tax on dividends paid to 
shareholders for up to 7 years; 6 additional years to 
carry forward net losses 
Time limit:  ..  S/WPGR/W/25/Add.5 
Page 24  
 
  Legislation Beneficiaries/requirements Concessions/time limits 
Motion Picture 
Encouragement Act Recognized motion picture  producers Exemptions from import duties on equipment, 
machinery, and materials used in motion picture 
production or to build studios 
Income tax relief for 9 years Investment allowance of 70% of expenditure on the 
facilities for 9 years or beyond 
Time limit:  various  
Hotel Incentives Act New hotels  with at least ten bedrooms, or hotels 
doing a substantial structural alteration Income tax relief for 9 years 
Income tax relief on dividends paid to shareholders 
Duty-free importation of building materials and 
furnishings Relief from GCT 
Time limit:  10 years (15 years for convention-type 
hotels)  
 Existing hotels adding a minimum 10 rooms or 
30% of the existing number of rooms (whichever is higher); 
Approved convention hotels with 350 or more 
bedrooms Income tax and import duty relief  
  
 
Time limit: 15 years  
Resort Cottages Act  Cottages with at least two furnishe d bedrooms Duty-free importation of building materials and 
furnishings  Income tax relief for 7 years 
Time limit:  7 years 
 
Shipping Act Business entities that own Jamaican ships Ex emptions from import duties for articles imported for 
use in the operation of exempted ships (e.g. a registered 
Jamaican ship, engaged in foreign-going trade)  for up to 10 years Time limit:  10 years 
 
Customs Act Farmers and farming enterprises (see 
Chapter IV(2)) Duty concession on the impor tation of farm vehicles 
(i.e. panel vans, pick-ups, trucks, tractors - heads and 
trailers)  
Time limit: not specified  
Income Tax Act Any person engage d in an agricultural activity 
prescribed by the Minister of Finance and declared "approved farmer" (see Chapter IV(2)) Income tax relief  
 
Time limit: 10 years, extendable for a further 5 years 
 
.. Not available. 
Source:  WTO Secretariat. 
 
P. 90, para. 8  
Tourism  continues to be Jamaica's main earner of foreign exchange.  The sector was affected 
by the 11 September 2001 terrorist attacks, but h as since recovered.  Incentive schemes, including 
relief from income tax and import duties, appear to be particularly important in the tourism sector. 
P. 131, para. 160  
 Jamaican business entities may benef it from fiscal incentives.  Jamaican ships  engaging in 
foreign trade may be declared "exempted ships";  the entities that own or operate an exempted ship 
(approved shipping entities) may be exempted from income tax in respect of gains derived from 
ownership or operation of the ship for ten years,  renewable.  Approved shipping entities are also 
exempt from transfer tax, stamp duties, and cust oms duties and GCT on imports to be used for the 
operation of an exempted ship.  S/WPGR/W/25/Add.5 
 Page 25 
 
 
  P. 133, para. 170 to 176  
 The tourism  industry benefits from a number of in centives schemes.  Th e Hotel Incentives 
Act (HIA) allows for a ten-year relief from income tax, GCT, and import duties for specific types of building materials, machinery and equipment.  For convention-type hotels with 350 or more 
bedrooms, relief is granted for 11 to 15 years.  Under the HIA, relief is available for ten years to:  new 
hotels;  existing hotels adding a minimum of ten rooms or 30% of the existing number of rooms, 
whichever is greater;  or existing hotels that intend  to do substantial structural alterations.  To be 
considered as a hotel, there must be at least ten bedrooms, as well as facilities for meals. 
 The Resort Cottages Incentives Act (RCIA) en courages investment in cottages, villas, 
apartments, and townhouses in resort areas, typically by  private investors.  Cottages must have at least 
two bedrooms, a furnished living room, kitchen, a nd bathroom.  Income tax relief is available for 
seven years on new resort cottages.   If the same owner builds a group of resort cottages containing at 
least ten bedrooms in the same village or district, the owner is entitled to seven years relief from GCT, 
income tax, and importation duties. 
 The Government also provided assistance until April 2003 to establishments that did not 
qualify for benefits under the HIA or the RCIA,  through the Short-term Incentives Programme 
(STIP), as was previously the case with the T ourist Accommodation Refurbishing Programme.  The 
first Phase of the STIP was put in place in Novemb er 1999 and ended in November 2000;  the second 
Phase (STIP II) started in October 2001 and ended in April 2003.  The benefits in the first Phase 
consist in the granting of Gene ral Consumption Tax (GCT) and customs duty concessions on specific 
items bought locally or imported for the refurbis hment and/or expansion of accommodation facilities 
and natural or man-made attractions;  they were  granted only for accommodation facilities only in the 
second Phase, which was not applicable to tourist attractions.  Concessions similar to those which 
may be obtained by larger properties under the incen tives legislation currently in place were granted 
to hotel properties with less than ten bedrooms and apartments and villas whos e configurations do not 
allow them to be classified as either a hotel or  resort cottage, for the purpose of building and 
refurbishing activities.  Benefits were granted based on an expanded list of items as provided in the 
schedule to the HIA and RCIA.  Attractions were granted benefits in the first Phase of the STIP, on the condition that the definition of attraction and th e list of items were agreed by the Ministry of 
Finance and Planning. 
 The STIP II was also available to large proper ties of over 100 hundred rooms, but subject to 
an assessment of their eligibilit y by a Committee led by the MIT. 
 During the first Phase of the STIP, 24 tourism entities:  seven hotels, one villa, nine natural 
man-made and seven water-based attractions received benefits.  During STIP II, ten hotels were 
approved for benefits, four of these were la rge properties with more than 100 rooms. 
 The MIT put in place in 2001 an Emergency Incentive Scheme (EIS), a short-term assistance 
programme for tourism industry operators affected  by the 11 September 2001 events.  The EIS, in 
place from 1 October 2001 to 30 September 2002, pr ovided benefits for refurbishing accommodation 
and attractions facilities, in the form of waivers on all taxes, included import duties, except the GCT. 
 The Small Hotel Assistance Programme, a short-term incentives programme, for the period 
July-September 2002 provided fina ncial and technical support to small hotels, villas, guest houses, 
and tourist attractions to help them meet regulat ory standards in health, safety and security.  The 
programme was for J$5 million, with a maxi mum of J$300,000 (US$5,000) per beneficiary. S/WPGR/W/25/Add.5 
Page 26  
 
  Brazil - WT/TPR/S/140  
 
P. 94, para. 263 and 264
 
 Through the FINAM/FINOR programme, regulated by Law No. 8,167 of 16 January 1991, 
Law No. 9,532 of 10 December 1997, and Law No. 9,808 of 20 July 1999, businesses were entitled to 
deduct 18% of their income tax to be invested in  the Amazon or north-east regions.  The funds are 
channelled through the Amazon Investment Fund (FINAM) or the Northeast Investment Fund 
(FINOR) for investment in projects by any enterprise  located in the legal Amazon or north-east regions 
that can generate jobs and income and promote regional development.  The programme, previously administered by the SUDAM and the SUDENE, is unde r the responsibility of the Ministry of National 
Integration since 2001.
33  However, since no new projects are be ing financed it is currently aimed at 
providing credit disbursements for some 700 pending SUDAM/SUDENE projects. 
 Projects financed by FINAM or FINOR included:  construction ;  acquisition of machinery, 
equipment, and devices;  acquisition of know-how;  furniture and utensils;  preparation of area and 
soil for plantation;  acquisition of seeds and seedlings  for transplant;  installation of nurseries and 
clone gardens;  plantation, agricultural and cattle in stallations;  and acquisition of animals.  Private 
sector projects directed towards ag riculture and cattle breeding, agri-industry, tourism, fishing, 
forestation/reforestation, energy , transportation  and communications  were given priority. 
P. 169, para. 287 and 288  
 Proceeds from the collection of the AFRMM are destined the Merchant Marine Fund (FMM), 
to be used for the financing of projects for ship c onstruction, repair or improvements in Brazil, as well 
as shipyards and facilities established or to be establi shed in the country.  The funds are managed by 
the BNDES, on behalf of the FMM and the Ministry of Transport  The domestic shipping  industry may also receive other in centives.  Freight receipts from the 
international transportation of merchandise by an EBN in ships registered in the Special Brazilian 
Registry (REB) are exempt from the Social Inte gration Programme (PIS) and the Contribution for 
Social Security (COFINS).
34  The construction, maintenance, repair, and modernization of REB-
registered ships in Brazilian shipyards benefit from the same fiscal treatment granted to exports of 
industrial goods in general.  Also , Brazilian shipbuilders and shipyard s established in the country may 
receive credits from the BNDES at interest rates ranging from 4% to 6%, with repayment periods of up to 20 years, and for up to 90% of the total cost of the project. 
Switzerland and Liechtenstein - WT/TPR/S/141 
 P. 74, para. 130 (Liechtenstein)
 
The Liechtenstein authorities ha ve indicated that economic subsidies exist only for:  
agriculture, for which direct payments in 2003 amounted to Sw F 10.6 million (Chapter IV(2));  
tourism , financial support of some Sw F 600,000 per year for international tourism marketing 
activities (Chapter IV(9));  and public transport, fi nancial assistance of Sw F 14.5 million per year.  
However, as Liechtenstein is a member of the EEA, its companies may participate in EU 
programmes, such as the Sixth Framework Programme  for research and development of the European 
Community and the Multiannual Programme for Enterpri se and Entrepreneurship, and, in particular, 
in programmes for small and medium-sized enterprise s, to which Liechtenstein contributes funding.   
                                                      
33 WTO document G/SCM/N/71/BRA, G/SCM/N/95/BRA, 30 July 2003. 
34 Law No. 9,432, 8 January 1997.  S/WPGR/W/25/Add.5 
 Page 27 
 
 
  P. 76, para. 140 (Switzerland)  
Certain cantonal banks  (see also Chapter IV(11)) have received substantial sub-federal 
assistance in recent years, usually as cantonal investme nts, to assist in recovery.  For example, the 
Geneva Parliament was authorized in May 2000 to  borrow Sw F 246.2 million to purchase shares in 
the ailing Banque cantonale de Genève (BCG), which had high-risk or non-performing assets of 
approximatedely Sw F 5 billion in 2000.35  The total cost to Geneva taxpayers of this bank's rescue 
was budgeted at Sw F 2.7 billion.36  Similarly, in February 2003, following serious financial 
difficulties, the Canton of Vaud provided the Banque Cantonale Vaudoise  with Sw F 1.25 billion in 
additional share capital. 
P. 125, para. 122 (Switzerland)  
The first phase of the rail transport reform began in 1999, and included an obligation for 
companies to distinguish transport services fro m transport infrastructure for accounting and 
organizational purposes.  It also established access to the Swiss rail network for all companies, against 
payment.  The bilateral agreement with the EU on land transport extended this access to 
EU/groupings and to EU/railway undertakings (for co mbined transport) as of 1 June 2002. However, 
access can be granted to any railway company outside  the EU on the basis of a bilateral agreement 
with the country where the railway company is estab lished and if certain conditions are met. In 1999, 
the Swiss Federal Railways (SBB) was transformed in to a joint-stock company and was granted more 
management powers.  However, the SBB is still fully owned by the Confederation and therefore 
remains under the supervision of the Federal C ouncil.  The SBB still holds exclusive rights over 
long-distance passenger services.  In exchange for this privilege, the SBB is assigned specified basic 
tasks by the Federal Council (e.g. regular supply  of basic rail transport services throughout the 
country).  The Swiss Confederation and cantons al so provide financial assistance to suppliers of rail 
transport services  for services ordered by the public authorities.  
P. 132, para. 159 (Switzerland)  
The Federal Government plans to provide suppor t of Sw F 200 million in the 2005-09 period 
(Sw F 40 million annually) in favour of a "results -oriented destination marketing" by Switzerland 
Tourism37, with results to be measured by the actual numbe r of tourists.  The existing instruments of 
support to tourism have been modernized a nd endowed with new funding.  A budget of 
Sw F 35 million for the 2003-07 period was adopted for Innotour, a governmental programme for the 
promotion of innovation and education in tour ism. The Swiss Society for Hotel Credit ( Société suisse 
de crédit hôtelier ), a public corporation, was granted a new interest-free loan of about 
Sw F 60 million, which is to be allocated by the Society as credit to hotels  in mountain regions.  The 
Society provides concessional loans and credit gu arantees to small and medium-sized companies 
investing in tourist areas, in accordance with a federal law on accommodation of 20 June 2003.38 
                                                      
35 Etat de Genève, "General Memorandum concerning the Foundation for Valorization of the Cantonal 
Bank of Geneva Assets", April 2001.  
36 Etat de Genève, Rapport annuel de la Commission de contrôle de la Fondation de valorisation des 
actifs de la Banque cantonale de Genève , Session of 21 September 2001, available at:  
http://www.geneve.ch/grandconseil/memorial/data/540411/45/540411_45_partie3.asp. 
37 Switzerland Tourism is a public corporation in charge of communication and marketing in the 
tourism subsector. 
38 Loi fédérale sur l’encouragemen t du secteur de l’hébergement , RS 935.12. S/WPGR/W/25/Add.5 
Page 28  
 
  Japan - WT/TPR/S/142 
 
P. 42, para. 62
 
The framework of Japan's promotion measures for inward FDI has remained generally the 
same since its previous Trade Policy Review .  The 1992 Law on Extraordinary Measures for 
Promotion of Imports and Facilitati on of Foreign Direct Investment in Japan, valid until 2006, its 
related ordinances, and other rele vant legislation, outline measures for investment promotion that 
mainly comprise financial support such as low-inte rest loans and loan guarantees, and technical 
support (Table III.6).  According to the authoriti es, these measures apply equally to domestic and 
foreign companies registered in Japan. 
Table III.6 
Measures to promote foreign dire ct investment into Japan, FY 2004  
I. Loan guarantees through the Industrial  Structural Improvement Fund (ISIF)  
  (a) Relaxation of conditions for obtaining cer tification as a Designated Inward Investor :  A company that has been operating fo r less 
than eight years (currently five y ears) is eligible for certification.  
  (b) Relaxation of conditions for obtaining lo an guarantees from ISIF:  currently, in order to obtain loan guarantees, as a rule , ISIF 
requires the backing of a capitalized enterprise and a legal repr esentative of the borrower as a backer of guarantees.  The con dition of 
requiring a guarantee backer is abolished when the b acking of a capitalized enterprise can be obtained.  
II. Provision of low-interest financing from the Development Bank of Japan, etc.  
  (a) Expanding eligible projects  
  Former limitation that required establishmen t in one of six industrial high-tech fields  has been eliminated.  Projects establis hing 
facilities (including land) for lease by foreign companies and fore ign affiliates with one third foreign ownership or more, or any 
company establishing office buildings in which the ma in tenants are non-Japanese businesses are eligible.  
  (b) Creating new loan programmes  
  Loan programme for promoting market entry of foreign-affiliated firms:  in addition to the capital investment finance, the new 
programme will finance related working capital needs (e.g . rent for facilities, property tax, insurance premium).  
  Loan programme for facilitating internationa l cooperation between enterprises:  if th e foreign share in the company exceeds 1/3  of 
total equity as a result of M&A,  the company can obtain JDB loans for capital inve stment afterward.  Corporate alliances involv ing 
transfer of operations are also e ligible for this loan programme.  
 Loan programme for supporting environment-fr iendly management systems:  if the fo reign companies pass the bank's evaluating 
process, they can obtain a low-interest loan and the bank gua rantees the company's bonds in order to support the projects.  
III. Import promotion measures  
  (a) Tax reductions, applied to national and local taxes, for foreign access zone (FAZ ) related businesses.  Businesses undertak ing 
activities to promote distribution of importe d cargo (wholesalers, manufactur ers, transporters or retailers dealing with import ed 
goods) within specified zones for congregation in FAZ areas desi gnated by the local governments of  approved FAZ areas can make 
use of following tax reduction measures:  
  Reduction of national taxes (Tax Incentives for the Promoti on of Business Congregation within the FAZ Areas):  special 
depreciation with regard to certain machin ery, facilities, buildings, etc. acquired for their business use.  (The rate of speci al 
depreciation is:  22% for machinery and facilities;  10% for buildings.)  
  Reduction of local taxes:  exemption from special landholding tax on the land for the facilities.  Also eligible for a reductio n or 
exemption from the real estate ac quisition tax and fixed assets tax.  
  (b) Loan guarantees and exceptional measures provided by the Small Business Credit Insurance for FAZ-related businesses:  
businesses undertaking activities to prom ote distribution of imported cargo ( wholesalers , manufacturers, transporters  or retailers  
dealing with imported goods) within specified  zones for congregation in FAZ areas desi gnated by the local governments of approv ed 
FAZ areas can make use of following loan guarantees and exceptional measures re lated to credit insurance:  
  Loan guarantees through the (ISIF):  loan guarantees are provided by the Industrial Structure Improvement Fund to aid in borrow ing 
necessary funds, including operation funds.  
  Exceptional measures provided by Small Business Credit Insurance:   Exceptional measures are provided by Small Business Credit 
Insurance to small and medium-sized companies.   S/WPGR/W/25/Add.5 
 Page 29 
 
 
    (c) Special financing measures for FAZ-related businesses:  w ith regard to the DBJ financi ng programme for import facilities 
enhancement and the low-interest loans pr ovided by the Japan Finance Corporation for Small Busine ss to facilitate import sales,  
import-related businesses within the FAZ areas are able to receive loans with special conditions:  
  DBJ (Financing Programme for Import Facilities  Enhancement).  Companies are eligible fo r this programme regardless of the share  
of imported goods among their handling.  Also, manufacturers and others are able to recei ve loans not only when they invest in Japan 
for the first time, but even for second and subsequent investments.  
  Japan Finance Corporation for Small Busine ss (Loans to Facilitate Import Sales).  W holesalers or retailers selling imported goo ds 
through their own offices in the FAZ facilitie s or contacts with businesses in the FAZ facilities are able to receive up to ¥40 0 million.
IV. Measures for small and medium-sized enterprises  
  Training for administrative managers of fore ign-affiliated firms:  Institute of the Ja pan Small Business Cor poration offers tra ining 
programmes on personnel management and business practices in Japan, etc. for administrativ e managers etc;  of small and medium-
sized foreign-affiliated firms.  The participants  are subsidized on two thirds of the training fee.  
V. Venture support measures  
  (a) Loan guarantees for loans using collate ral of intellectual property rights for vent ure enterprises:  the ISIF provides loan  
guarantees for up to 80% (usually 70%) of business funds, and doe s not require a guarantee backer of a capitalized enterprise i f the 
collateral of the loan is intellectual property rights.  
  (b) Investment for venture enterprises:  in  addition to a company that has been operating or has submitted an application for a  patent 
less than five years earlier (currently three years), a company that establishes know-how in five years is able to take investm ents 
from the New Business Investment Company Limited.  
  (c) Introducing a stock option system:  the G overnment of Japan expands the term of exercise for the company's executives or 
employees to accept new stock shares of the company at lower pr ice than others, based on the resolution of a general meeting of  
stockholders, from six months to within ten years.  
Source: Information provided by the Japanese authorities.  
P. 73, para. 50  
In order to cope with a decrease in the number of Japanese-flag carriers, the Government 
provides support for Japanese-flag carri ers (the so-called International Ship Regime);  this support has 
been unchanged since Japan's previous Review.  The authorities maintain that the Regime has no 
distortionary effects on trade in maritime transport services ;  it aims to increase the competitiveness 
of Japanese vessels against those of other countries that provide preferential tax treatment for their 
registered ships.39 
Sierra Leone - WT/TPR/S/143 
 
P. 26, para. 45  
The Investment Promotion Act implements tax incentives as provided for in the income tax 
regulations (Table II.1).  Past tax benefits will rema in in place until the tax code in force is repealed.  
A revised list of fiscal incentives is to be annexe d to the 2004 Investment Promotion Act and enacted 
by Parliament, but this list has not yet been passed by Parliament.  Sierra Leone has provided more 
favourable payroll tax rates for investors employing ECOWAS citizens, and fiscal incentives in agri-
processing activities with a requirement for 60% local  input or value added (Chapter III(3)(v)).  The 
proposed list to be annexed to the Investment Promo tion Act is to divide the territory into two zones 
(Zone A – Western Sierra Leone;  and Zone B all ot her regions in Sierra Le one).  Capital allowance 
for the reconstruction of the country, and incen tives such as duty and tax exemptions may be 
increased.  Incentives in the tourism  sector may be increased, and an allowance may be created for 
special research and training expenses.  Accord ing to the authorities, estimates on forgone fiscal 
revenue from the granting of incentives is estimated at between Le 10 billion and Le 12 billion for the 
first two years of the implementation of the Investment Promotion Act.  
                                                      
 39 These measures include tax breaks in respect of sh ipregistration tax and local property tax.  As to 
ships that are registered as 'internatio nal ships', ship-registration tax is 0.2% of the price of the ship and the tax 
base for local property tax is one- fifteenth of the price of the ship. S/WPGR/W/25/Add.5 
Page 30  
 
  P. 27-28, table II.1
 
Table II.1 
Investment incentives, September 2004  
Measure/Coverage Current situation  
(Non-Citizen (Trade and Business)  
Act of 1969, and other Acts)  Indicative list to be annexed to the 
Investment  Promotion Act, 2004  
Corporate tax  General rate 35% Zone A:  30%;  Zone B:  25%a 
Agriculture (tree and food crops) and 
forestry (cultivation)  Rice:  exempt first 10 years Exempt first 10 years  
Agri-processing (60% local input)  35% Exempt first 10 years  
Agri-processing (below  60% input)  35% First 10 years:  Zone A – 20%;  Zone B – 10%  
Forestry (processing)  35% Zone A – 30%;  Zone B – 20%  
Tourism  Exempt 1 to 5 years Zone A – 25%;  Zone B – 20%  
Losses write-off  Allowable, subject to maximum annual write-off of 50% of succeeding years profit Allowable, subject to maximum annual write-
off of 50% of succeeding years profit  
Import duty    
Raw materials 5% (malaria and HIV drugs exempt) Duty free 
Plant and machinery 5% Duty free 
Generator for operations 5% Duty free 
Tourism Duty-free concession for new construction, 
extension or renovation of an existing one, 
applicable to building materials, machinery 
or equipment that is not easily available in Sierra Leone for the period of construction or rehabilitation (i) Duty-free concession for new approved 
construction, verified extension, restoration of tourist facilities and amenities, including 
renovation due to force major, determined by the Tourist Board.  This is applicable to imported materials for construction, 
furnishings, and equipment for first three 
years or to date of completion if less than three years. (ii) 50% duty rate reduction for upgrading 
during first 12 months of work or to date of 
completion if less than 12 months
 
Intermediate products 20% 20% 
Operational vehicles 5% (between 0 and 4 years) 
20% (over 4 and up to 10 years) 
30% (above 10 years)  5% (between 0 and 4 years) 
20% (over 4 and up to 10 years) 
30% (above 10 years)  
Sales tax   
Plant and machinery Tax free Tax free 
Other:  at entry (advance tax) 17.5% 10% 
at final assessment  17.5% (production over Le 100 million) 17.5% (all production) 
vehicles 17.5% 17.5% 
Payroll tax   
General Non-ECOWAS citizens:  Le 1,000,000 
(US$370) per year;  and ECOWAS citizens:  Le 100,000 (US$37) per year 
 Non-ECOWAS citizens:  Le 1,000,000 (US$370) per year;  and ECOWAS citizens:  Le 100,000 (US$37) per year 
Exempt if enterprise exports US$1 million or more during the year 
Tourism  Exempt for non-available skills for first three 
years of employment for up to six persons  Exempt for non-available skills for first two years for up to three personnel
 
Investment allowance 5% in first year of new purchase  7.5% in first year of new purchase  
Incentives for exports   
Export/excise tax Exempt for 75% exported output  Exempt for 75% exported output  
Export Processing Zones n.a. Special incentives to be enacted  
Duty drawback Allowed on raw materials for goods exported  Allowed on raw materials for goods exported  
Research and training expenses (capital 
investment only) n.a. Initial allowance:  40%;  annual:  20%   S/WPGR/W/25/Add.5 
 Page 31 
 
 
  Measure/Coverage Current situation  
(Non-Citizen (Trade and Business)  Act of 1969, and other Acts)
 Indicative list to be annexed to the Investment  Promotion Act, 2004
 
Local employment allowance (number of 
employees) n.a. 2.5% of business income exempt from tax  
(under 51 employees) 
5% of business income exempt from tax  (between 51 and 100 employees) 
7.5% of business income exempt from tax 
(over 100 employees)
 
n.a. Not applicable 
a Zone A:  Western Sierra Leone;  and Zone B:  all regions in Sierra Leone outside Zone A. 
Source:  The Non-Citizen (Trade and Business) Act of 1969;  and Law No. 9 the Investment Promotion Act, 5 August 2004. 
Qatar - WT/TPR/S/144 
 
P. 19, para. 35  
 Under the 2000 Investment Law and the 2004 Law and Instructions of Income Tax, Qatar 
may grant a tax holiday of five to ten years for new investment in agriculture, industry, trade, 
petroleum, mining, tourism , land reclamation, transport , or any socially and economically beneficial 
activity/project needed by Qatar.40  Foreign companies may be granted tax exemptions on a case-by-
case basis through an Emiri Decree, an analys is by the Tax Exemption Committee, and after 
recommendation by the Ministry of Finance.41 The Government provides other investment incentives 
(Chapter III(4)(i)). 
Mongolia - WT/TPR/S/145 
 
P. 38, para. 61  
FDI in certain sectors and activities receive further preferential tax treatment.  For example, 
ten years of tax exemption and 50% tax relief for th e subsequent five years are granted for FDI in 
power and thermal plants and thei r transmission networks, highways, railways , airways  and 
engineering  construction, basic telecommunications  network, electricity source and network, and 
technology renovation;  and five years of tax ex emption and 50% tax relief in the subsequent 
five years are granted for FDI in oil and coal, metallurgy, chemical production, machinery, and 
electronics. 
Paraguay - WT/TPR/S/146 
 P. 73, para. 184
 
Law No. 60/90, regulated by Decrees No. 15.657 of 30 November 1992, No. 7.692 of 
23 February 2000, No. 22.031 of 14 August 2003 and by Law No. 2.421 of 25 June 2004, lays down 
                                                      
40 The exemption period starts from the date of commencing the project. Qatar's Minister of Finance 
can recommend tax exemptions for five years, while a ta x exemption for more than five years but not exceeding 
ten years needs the approval of the Council of Ministers.  
41 The Tax Exemption Committee is composed of two representatives each from the Ministry of 
Finance and the Ministry of  Economy and Commerce, and one represen tative each from the Ministry of Energy 
and Industry, and Qatar Chamber of Commerce and Industry. S/WPGR/W/25/Add.5 
Page 32  
 
  the conditions for the granting of tax exemptions  to both Paraguayan and foreign investors.  
Exemptions under Law No. 60/90 apply, inter alia, to investments in:  financing , capital goods, 
marks, designs and technology transfer in gene ral, specialized technical assistance, mining, the hotel  
trade, leasing of capital goods, provision of air cargo and passenger transport services , river 
transport , land freight transport  in general, public passenger transport, health , radio, television , 
press, fixed rural and urban telephony , mobile telephony, scientific research, silos, warehousing  and 
data transmission services . 
Nigeria - WT/TPR/S/147 
 
P. 17-18, table II.2
 
Table II.2 
Investment incentives 
Sector Description 
All sectors Tax-related:  
(i) 30% companies income tax in all sectors, except petroleum;  (ii) five-year tax holiday on companies investing in 
pioneer industries;  (iii) tax relief on up to 140% of expenses on research and development;  (iv) 2% tax concessions for a period of five years for industrial establishments that set up in-plant training;  (iv) 20% of the costs of providing infrastructure that should normally have been borne by government (e.g. electricity) are tax deductible;  (iv) tax 
holidays of up to seven years on investments in economically disadvantaged areas;  (v) tax concessions on companies 
with high labour capital ratio;  (vi) 10% tax concession for five-years on local value-added;  (vii) tax credit of 20% for five years to industries that attain a certain minimum level of local raw material sourcing and utilization; capital allowances range from 5% to 30% depending on expenditure. 
 Others 
(i) unconditional transferability of funds through an authorized dealer in freely convertible currency;  (ii) no enterprise 
shall be nationalized or expropriated by any government of the federation, unless the acquisition is in the national interest or for public purpose, in which case there are legal procedures to follow;  (iii) any company incorporated in 
Nigeria is allowed to have access to land rights for the purpose of its activity in any state in the country. 
Industrial sector (i) companies investing in economically disadvantaged areas, benefit from a 100% tax holiday for seven years and an 
additional 5% depreciation over and above the initial capital depreciation;  (ii) for a five-year period companies also 
benefit from tax concessions of up to 30% if involved in local raw material development, 10% if involved in local value added, 15% if involved in labour-intensive processing, 10 % if involved in export-oriented activities, 2% if involved in-plant training;  (iii) companies with turnover of less than N1 million are taxed at a low rate of 20% for the first five 
years of operation if they are into manufacturing;  (iv) up to 120% of expenses on research and development are tax 
deductible;  (v) up to 20% of the cost of providing infrastructure such as roads, water, electricity, where they do not exist is tax deductible;  (vi) all excise duties have been abolished (since 1 January 1999);  (vii) 25% import duty rebate;  (viii) tax allowance in respect of qualifying capital expenditure incurred within five years from the date of the approval 
of the project;  (ix) dividends of companies in the manufacturing sector with turnover of less than N
 100 million are tax-
free for the first five years of their operation. 
Energy  All investments in this area are considered to be pioneer, hence benefit from a five to seven-year tax holiday. 
Oil and gas  (i) tax rate under the Petroleum Profit Tax (PPT) Act to be at the same rate as company tax, currently at 30%;  
(ii) capital allowance at the rate of 20% per annum in the first four years, 19% in the fifth year and the remaining 1% in the books;  (iii) investment tax credit at the current rate of 5%; (iv) tax holiday under pioneer status;  (v) capital 
allowances;  (vi) repatriation of profits;  (vi) no foreign exchange regulation;  (vii) dividend derived from 
manufacturing companies in petro-chemical and liquefied natural gas subsector are exempt from tax. 
Agriculture (i) companies in the agri-allied business do not have their capital allowance restricted to 60% but graduated in full – 
100%;  (ii) agri-allied plant and equipment enjoy enhanced capital allowances of up to 50%. 
Solid minerals (i) three to five-year tax holiday;  (ii) possible capitalization of expenditure on exploration and surveys;  (iii) provision 
of 100% foreign ownership of mining companies or concerns;  (iv) capital allowance. 
Tourism (i) tax holidays;  (ii) longer moratorium and import duty exemption on tourism-related equipment;  (ii) tax exemption 
on 25% of incomes derived from tourists by hotels.  
Telecommunications Rebate and tax relief. 
Exporting (i) company profits in respect of goods exported are exempt from tax under certain conditions;  (ii) profits of companies 
whose supplies are exclusively input to the manufacturing of products for export are excluded from tax;  (iii) export 
processing zone companies are allowed full tax holidays for three consecutive years;  (v) investment tax credits;  
(vi) retention of export pro ceeds in a foreign currency in a domiciliary account with a Ni gerian bank;  (vi) export 
development fund to cover expenses on export promotion activities;  (vii) export adjustment fund to compensate exporters for high cost of local production, arising mainly from infrastructural deficiencies;  (viii) unrestricted 
remittance of profits and dividends;  and (ix) zero-rated VAT.  
Source : Information provided by Nigerian authorities.  S/WPGR/W/25/Add.5 
 Page 33 
 
 
  Ecuador - WT/TPR/S/148/Rev.1  
 
P. 63, para. 174  
Incentives offered under the Law on Tourism42 to tourism projects approved by the Ministry 
of Tourism include:  exemption from the payment of taxes resulting from the incorporation of a 
company and other financial transactions, and from  taxes relating to the transfer of property 
ownership to the company;  duty-free importation of aircraft, boats and vehicles used for transporting 
tourists, for a specified period, provided there is no domestic production thereof;  and the possibility 
to deduct from income tax, within certain limits, exte rnal payments made to promote inbound tourism.  
These benefits are granted both to new tourism projec ts and to projects for th e expansion of existing 
facilities.  New projects are granted benefits for a peri od of 10 years.  The projects must be located in 
economically underdeveloped rural areas and constitute  touristic activities "which warrant accelerated 
promotion".43 
The Philippines - WT/TPR/S/149/Rev.1 
 P. 57-58, para. 101, 102 and 103
 
Incentives encourage investment in specific activities, regions and non-traditional exports.  
They are still regulated by the Omnibus Investment C ode (OIC), and while ava ilable to nationals and 
foreigners there is some discrimination against th e latter (see below).  So me are subject to export 
performance requirements.  In general, under the OI C, only enterprises registered with the BOI and 
producing non-traditional exports or e ngaged in a sector listed in the Investment Priorities Plan (IPP) 
are entitled to tax exemptions and concessions, and to some non-tax in centives.  However, even if the 
activity is not listed in the IPP, an enterprise may be  eligible to receive incentives if it exports at least 
70% of production, or 50% for a Filipino-owned enterprise (at least 60% domestic equity).44  In 2004, 
the IPP list included manufacturing of non-traditional exports45, and activities that supported 
exporters, and some 15 specific sectors.46 
The tax incentives available under OIC to BOI-registered firms include, inter alia :  4-6 year 
corporate tax holidays depending upon the enterprise type and project location47;  tax credit for taxes 
and duties paid on raw materials, supplies and semi -manufactured products used in the manufacture of 
exports;  and tax credits for breeding stocks and ge netic materials.  BOI-registered firms located in 
less developed areas may be eligible to claim up to  a full tax deduction for infrastructure expenditure 
and labour costs of hired workers. 
                                                      
42 Law No. 97, Official Journal/S uppl. 733, 27 December 2002. 
43 Law on Tourism, Article 34. 
44 BOI (2001). 
45 Non-traditional export pr oducts exclude copra, copra meat and cake, crude coconut oil, desiccated 
coconut, inedible molasses, pineappl e in syrup, logs, lumber, plywood and veneer, and unprocessed tobacco. 
46 These covered agriculture and fisheries;  air, land and inter-island transport ;  drugs and 
medicines;  ecological solid waste management;  energy ;  industrial tree plantation;  iron and steel;  
information and communications technology ;  infrastructure (e.g. rural electrification system, 
telecommunications and power projects),  mass housing projects;  petrochemicals;  printing;  refining, storing, 
marketing and distributing of petroleum products;  tourism ;  and R & D activities (BOI, undated b). 
47 Enterprises are classified as "pioneer", "non-pioneer" or "expanding".  A pioneer enterprise 
introduces new technology to the Philippines, engages in agriculture, forestry or mining to pursue national 
goals, or produces non-conventional fuels or equipment utilizing such energy sources.   S/WPGR/W/25/Add.5 
Page 34  
 
  Other tax incentives are also available to regional headquarters and regional operating 
headquarters located in the Philippines and unde r some 44 special investment incentives laws 
(Table III.6).
 48 
Table III.6 
Tax incentives provided under selected special investment incentives laws 
Lawa Sector Incentive 
Presidential Decree No. 87 and 
No. 1857 Oil and gas service contractors and 
developers of geothermal projects Exemption from import duties on imports of machinery, 
equipment, spare parts, and all materials in petroleum-
related projects Exemption from all taxes except corporate tax 
Republic Act No. 7942 Mining operators a nd developers Tax incentives under the Omnibus Investment Incentives 
Code 
A longer net operating loss carry-over for a period of 
five years Accelerated depreciation 
Republic Act No. 7471 Overseas shipping  operators A ten-year income tax holiday and duty exemption on 
imports of ocean going vessels 
Republic Act No. 6957, as amended by No. 7718 Build-Operate-Transfer projects 
(investment of over PhP1 billion) Same incentives granted to  BOI enterprises under the 
Omnibus Investment Code 
Republic Act No. 8502 Jewellery industry Duty-free importation on raw materials and equipment used 
to manufacture jewellery 
Exemption from excise tax on the sale of jewellery 
Republic Act No. 7916 as 
amended by R. A. No. 8748 Tourism  development projects Grant special economi c zone status to tourism development 
zones and to tourism states.  The tax incentives provided are 
similar to those provided to en terprises located in the export 
processing zones. 
Tax Code  Universal incentive to  any firm Net operating loss carry-over for the three consecutive 
taxable years immediately following the year of the loss 
Accelerated depreciation deduction for the wear and tear of assets 
a This list is not comprehensive;  there are so me 44 laws providing special investment incentives. 
Source : Information provided by the authorities. 
P. 102, para. 114  
There are about 950 private and public ports.  The Philippine Ports Authority (PPA) 
administers, operates, and develops most major ports ;  the rest are mainly municipal public ports run 
by local government units, including fishing ports and wharves.  PPA-administered ports currently 
number 507, of which 114 are state-owned and 393 are private.  Private ports handled 51% of total 
cargo in 2003, comprising mainly oil, petroleum products, and wheat.  Inde pendent port authorities 
run some public ports, such as Cebu and Subic Bay, ma inly formed as part of special economic zones.  
The PPA encourages private sector investment and participation in port ma nagement and operation, 
cargo handling, and port services, subject to requireme nts of national security, public safety and rules 
and regulations governing the operati on of private ports.  Incentives are provided to private operators 
of PPA-registered ports , such as a 50% reduction in port charges for wharfage, berthing, and usage 
fees.  As ports are regarded as public utilities, fore ign equity is constitutiona lly capped at 40%.  PPA 
also regulates certain auxiliary po rt services, excluding pilot services. 
P. 104-106, para. 123 and 127  
 In order to promote the industry, VAT re lief and other tax incentives were extended to 
shipbuilding and ship repair  in 2004.  In addition, imports of vessels will be restricted progressively 
after ten years (i.e. 2014) if comparable vessels can be constructed domestically.  These restrictions 
                                                      
48 BOI (2001).  S/WPGR/W/25/Add.5 
 Page 35 
 
 
  will be based on annual assessments by MARINA of th e capacity of registered shipyards to build 
sufficient vessels below 500 gross tons to meet de mand.  If found sufficient, domestic ship operators 
will be discouraged from importing such vessels, a nd those built in MARINA-registered shipyards 
will be given priority for entry in the Philippine registry. 
 The DOT endorsed 30 tourist  investment projects from January to August 2004 as eligible to 
receive tax incentives under the BOI's annual IPP.  These covered accommodation and tourist 
transport facilities with aggregate investment of PhP767.8 million.  Tourism enterprises located in 
"tourism enterprise zones" may also  receive investment incentives. 
Egypt - WT/TPR/S/150/Rev.1 
 
P. 15, para. 19 and 20  
The Investment Guarantees and Incentives Law,  passed in May 1997, allows investment 
through joint-ventures, limited liability compan ies, and partnerships , and governs "inland 
investments", essentially domestic investment projects, and investment in free zones, which are treated as outside the domestic economy for taxation, customs, and trade purposes.  Unlike the 
Companies Law, which applies to all investment , the Investment Guarantees and Incentives Law 
applies to investment (domestic or foreign) in certa in specified activities or sectors, subject to further 
amendments by the Cabinet (Table II.3).
49 
Table II.3 
Areas eligible for incentives under the Inve stment Guarantees and Incentives Law  
Air transportation and directly related services 
Animal, poultry and fish farming 
Financial leasing 
Hospital and medical centres offering 10% of  their service capacity free of charge 
Hotels, motels, boarding houses, tourist villa ges, tourist travel  and transportation 
Housing projects whose units are to be leas ed unfurnished for non-administrative purposes 
Industry and mining 
Infrastructure relating to drinking water, sewage , electricity, roads, and communications services 
Oil services in support of exploration a nd the transport and delivery of natural gas 
Overseas maritime transport 
Production of computer software and systems 
Projects funded by the Social Fund for Development 
Reclamation and cultivation of barren and/or desert lands 
Transport of goods in refrigerated vans;  refrigerators for the preservation of agricultural products, industrial products, and  foodstuffs; 
container depots and grain silos 
Underwriting subscriptions to securities 
Venture capital 
Source : Information provided by the Egyptian authorities. 
Investment incentives under the Investment  Guarantees and Incentives Law include tax 
holidays for company profits, personal income tax on dividends, and annual st amp duty on capital.  
Tax holidays are granted for five years for all invest ments;  up to ten years for companies established 
in the new industrial zones, new urban communities or  remote areas;  and up to 20 years from the date 
of establishment for investments outside the Ol d Valley.  Exemptions from stamp duty, and 
                                                      
49 Article 1 of Law 8/1997 establishes that the Cabinet of Ministers may add other activities to those 
already mentioned. S/WPGR/W/25/Add.5 
Page 36  
 
  notarization and registration fees are provided for up to three years from registration in the 
Commercial Register.  In addition, all customs duties on capital imports by companies registered under the Law are reduced to 5%.
50  In addition to tax advantages, investors receive, inter alia , 
guarantees against confiscation;  immunity from administrative sequestration;  assurance of no controls on prices or profits;  and the right to import and export inputs a nd final products without 
being required to use agents and export licences.  
P. 74, para. 102
 
Various incentives are provided to private investment in the tourism  subsector (Table IV.16).  
Investors in the tourism industry, both domestic and foreign, are eligible for the benefits provided by 
the Investment Guarantees and Incentives Law.  Special customs privileges and incentives for land 
development are also available. 
Table IV.16 
Investment incentives in the tourism industry, 2005 
Scheme Exemptions or concessions 
Taxes All tourist establishments except restaurants ar e exempt from paying taxes for 5 years in Cairo; 
10 years in remote areas;  and 20 years in El Wady El Gedeed and Toshka areas, under the Investment Guarantees and Incentives Law (8/1997). 
 Rebuilding and expansion activities of tourist-related premises ar e exempt from taxes on 50% of 
income.  
 Law 93/1996 allows a reduction up to 75% of fees for tourist and passenger ships entering Egyptian 
ports. 
Customs duties Under Decree 11/1996, all imported equipment, except for restau rants, benefits from a reduced 
customs duty of 5%. 
 Limousines with no more than seven seats that are imported by tourism transportation companies are 
subject to a unified custom duty of 5%. 
 Alcoholic beverages may be impor ted by hotels at a rate of 300% duty, instead of the usual rates 
ranging from 1,200% (beer) to 3,000% (spirits).   
Land acquisition/development Law 5/1996 allows ownership or lease of state-owned lands in desert areas. 
 Low interest loans are provided to developers for infrastructure services, by the Tourism 
Development Authority.  
 Law 72/1996 allows the expansion of tourist facilities and exemptions for tourist projects.  
 The Tourism Development Authority offers land to private developers for a nominal rate of 
US$1 per square metre in designated tourist areas.  
Source : Information provided by the Egyptian authorities. 
Trinidad and Tobago - WT/TPR/S/151/Rev.1 
 
P. 55, para. 117  
 Other mechanisms to encourage exports are still in place.  The Finance Act No. 3 of 1994 
Section 25(d) makes provision for a deduction of 150% of promotional expenses wholly or 
exclusively incurred for creating or promoting e xpansion into foreign markets (non-CARICOM) of 
exports of building industry services , goods and agricultural produce shipped in commercial 
quantities.  The Fiscal Incentives Act (see below) has provisions on incentives to enclave industries. 
                                                      
50 Article 23 of Law 8/1997.  S/WPGR/W/25/Add.5 
 Page 37 
 
 
  P. 56, para. 120, 121 and 122  
As part of Trinidad of Tobago's policy to pr omote exports, the Government maintains free-
trade zones to attract export-oriented investment in manufacturing, international trading, and service 
export operations.  In the context of this Review, th e authorities noted that in their view the free-trade 
zone regime and the Fiscal Incentives Act do not invol ve prohibited subsidies and thus, Trinidad and 
Tobago did not request an extension of the trans ition period in Article 27.4 of the SCM Agreement. 
The administration and operation of free zones is  governed by the Trinidad and Tobago Free 
Zones Act of 1988, as amended in 1995 and 1997.  U nder the Act, an approved free-zone enterprise 
may benefit from the following incentives:  exemption from customs duty on the import of goods into the free zone;  exemption from income tax;  ex emption from corporation tax;  exemption from 
business levy;  exemption from withholding taxes on remittance of profits, dividends and other 
distributions;  and exemption from land and build ing taxes on land, buildings, improvements to 
buildings, plant and machinery in the free zone.  Fr ee zone enterprises are not subject to import and 
export licensing requirements.  Benefits are granted for an indefinite period.  Free zone enterprises 
must comply with all regulations and laws of Tr inidad and Tobago except as specifically varied or 
exempted by the Free Zones Act;  they are therefore subject to the relevant technical regulations and 
labour laws. 
Activities that may be carried out in a free zone  are prescribed in the First Schedule of the 
Free Zones Act.  These include:  warehousing and storage ;  manufacturing operations;  trans-
shipment operations;  loading and unloading;  export and import;  service operations including 
banking , insurance , and professional services ;  packaging and shipping ;  assembling;  processing, 
refining, purifying and mixing;  and merchandising , including international trading of products.  
Primary petroleum and natural gas proj ects do not qualify for free-zone approval.
51  There is an 
investment limit of US$50 million;  projects beyond this limit are not eligible for free-zone status, although these activities may be carried out in a fr ee zone.  Banking and insu rance activities carried 
out in a free zone are subject to the Financial Institutions Act and Insurance Act, respectively. 
P. 109, para. 153 and 154
 
The Tourism Development Act, 2000 (Act No. 9 of 2000) provides incentives for investment 
in the tourism sector.  The Act repealed the Ho tel Development Act, which provided incentives only 
for hotel activities, and extended investment in centives to a wide range of activities in the tourism  
industry (approved tourism projects).  The Act provides incentives for approved tourism projects, including:  (a) a tax exemption not exceeding seven years in respect of the gains or profits from the 
approved tourism project;  (b) a tax exemption in respect of the gains or profits derived from the 
initial sale of a villa or condominium or a site that is part of an integrated resort development which is 
an approved tourism project.  An  approved tourism project may also be granted a carry-over of any 
loss arising out of the operation or renting of an  approved tourism project and a tax exemption in 
respect of interest received on an approved loan used for an approved tourism project during the tax 
holiday period.  Beneficiaries may also apply for a licence to import vehicles required for the 
implementation of their approved projects at a pref erential customs duty rate of 10%.  The authorities 
note that the Act is being amended to extend its benefits as at April 2005. 
Customs and excise duty exemptions are also  granted, under Part 3 of the Tourism 
Development Act, on building materials and articles of hotel equipment used in connection with a 
tourism project;  for domestic purchases, companie s may benefit from a drawback of customs duties 
or excise duties for building materials and articles of equipment that were not already duty free 
(the VAT is still payable).  To be eligible for th e incentives, any hotel project must have a minimum 
                                                     
 
51 TIDCO (2003), Chapter IX Investment Incentives, p. 87. S/WPGR/W/25/Add.5 
Page 38  
 
  of ten guestrooms;  approval depe nds on the amount of capital invested, the financial risk assumed, 
the contribution made or likely to be made to the sustainable development of the tourism industry, and 
the achievement of national tourism objectives.  Tourism projects seeking to access benefits under the Act must be registered with TIDCO/TDC if the proj ect is in Trinidad, or w ith the Tobago House of 
Assembly if the project is in Tobago;  they are subject to annual inspection. 
Tunisia - WT/TPR/S/152/Rev.1  
 
P. 22, para. 36, 39 and 40
 
 For more than 30 years, the Government has been pursuing a policy of encouraging private, 
especially foreign, investment.  In view of the dec line in private investment in relation to GDP since 
2002 (Table I.2), the promotion of investment remains one of its current priorities.  Investment policy 
is based on a complex system of laws and regul ations, whose applicati on depends on whether the 
investment is in a "resident" ("ge neral regime") or "non-resident" enterprise, is direct or portfolio, 
relates to "wholly exporting" activities (Chapter III(3)), or involves sectors covered by the Investment 
Incentives Code (CII).52  The authorities claim that, in practice,  the regime is flexible and based on 
statements made by the investors themselves and poses no problems of implementation.  There are 
numerous benefits, including tax exemptions, dir ect subsidies, and exemptions from the foreign 
exchange legislation, particularly for industrial e xport activities (Chapter III(3)(iv)).  An estimate of 
the budgetary cost of the measures covered by Article 25.1 of the Agreement on Subsidies and 
Countervailing Measures indicates a total of 557 million dinars for the year 2000.53 
Direct investment in most manufacturing industries, as well as in certain service activities , is 
eligible for the CII, which specifies, in a positive list, the sectors eligible and the incentives.  The non-
eligible manufacturing industries include, for example,  oil-refining and investment in the production 
of pharmaceuticals also produced by the state-owne d enterprise SIPHAT.  Certain other activities are 
subject to prior authorization or specifications.  These include the manufacture of arms and ammunition and parts thereof;  mechanical carpet we aving;  brewing, malting and winemaking;  flour 
and meal milling;  edible oil refining;  the fabrica tion of bars, sections and reinforcing rods;  teasing;  
and tobacco production.  Most service activities covere d by the CII, unless wholly exporting, are also 
subject to the prior authorization of the CSI wh en the foreign holding exceeds 50 per cent of the 
company capital.
54 
The CII provides for "common benefits" and "s pecific benefits".  The common benefits 
consist mainly of tax exemptions (Chapter III(4)(i )), including the deduction of the sums invested 
from taxable profits up to a limit of 35 per cent of th e latter;  a reducing-balance depreciation regime;  
and exemption from customs duties and (in some c ases) VAT on plant essential to the investment.  
The specific benefits are fixed in accordance wi th horizontal objectives, in particular, export 
promotion (Chapter III(3)(vi)).  The other horizon tal objectives include regional and agricultural 
development and the promotion of technolog y and small and medium-sized enterprises 
(Chapter III(4)(i)). 
                                                      
52 Law No. 93-120 of 27 December 1993 on the In vestment Incentives Code, available at:  
http://www.cnudst.rnrt.tn/wwwisis/jort.03/form.htm.  See also  the Order of the Minister for Industry and Energy 
of 26 January 2004 updating the Guide for private investors and promoters in the manufacturing industry and 
services sectors. 
53 WTO document G/SCM/N/71/TUN, 1 June 2001. 
54 The web site of the Industry Promotion Agency lists  the activities subject to authorization.  Available 
at:  http://www.tunisianindustry.nat.tn/fr/doc.asp?mcat=12&mrub=95.  S/WPGR/W/25/Add.5 
 Page 39 
 
 
  P. 56, para. 110  
The Investment Incentives Code (CII) contains a long list of manufacturing (including agri-
food) and service activities eligible for specific expor t benefits.  For "wholly exporting" enterprises, 
these benefits consist primarily of the total deductio n of export income and profits from the basis of 
assessment during the first ten years of activity a nd a 50 per cent deduction after that.  Moreover, 
profits and income reinvested in the initial capital or in an increase in the capital of wholly exporting 
enterprises qualify for total relief.  The relief is al so total for profits reinvested within the company 
itself.  Finally, wholly exporting enterprises may impor t, free of all duties and taxes (customs duties, 
VAT, consumption tax) the goods they need in orde r to produce, subject to the non-availability of 
those goods on the domestic market.  They may make some of their sales or provide some of their 
services in Tunisia (up to 30 per cent of their turnov er) subject to the payment of duties and taxes on 
entry for consumption. 
P. 90, para. 100, 101 and 102  
Apart from the general incentives provided for in the Investment Code (Chapter III(4)(i)), 
tourism  projects in regional development promotion areas qualify for the following benefits:  100 per 
cent exemption from income or profits tax for the fi rst ten years of activity and 50 per cent during the 
next ten years, and exemption from the contribut ion to the fund for the promotion of accommodation 
for employees during the first five years of activit y.  If the investment is made in a mining 
redevelopment area, a subsidy of 25 per cent of the cost of the project (excluding land) is granted to 
the investor by the Minister for Tourism after c onsulting the ONTT.  In other regional development 
areas, the subsidy is fixed at 8 per cent.  The Stat e will also pay the employer's contribution to the 
statutory social security regime in respect of wa ges paid to employees of Tunisian nationality during 
the first ten years of effective activity for investme nts made in Saharan areas and for five years for 
those made in other regional development promotion areas. 
The subsidy is released in three tranches for pr ojects costing not more than 1 million dinars:  
40 per cent when work on the project begins;  40 per cent on completion of 60 per cent of the 
investment;  and 20 per cent when production starts  up.  If the cost exceeds 1 million dinars, the 
subsidy is released in four tranches:  30 per cen t when work begins;  30 per cent on completion of 
60 per cent of the investment;  20 per cent on comple tion of 80 per cent of the investment;  and 20 per 
cent at start-up. 
The State grants exemption from customs duties and consumption tax, with VAT at 10 per 
cent instead of 18 per cent, on imports of four-wh eel drive vehicles purchased by travel agencies, 
provided that these vehicles are not manufactured loca lly. It also grants hotels and travel agencies 
exemption from customs duties and a reduction in VAT to 10 per cent on imports of all public transport vehicles with less than 30 seats, driver's  seat included.  The State will also suspend VAT 
(new project) or reduce it to 10 per cent (project already in operation) for the purchase of buses (large 
or small) manufactured or assembled locally.
55 
Republic of Guinea - WT/TPR/S/153/Rev.1 
 
P. 18, para. 50 and 51  
In order to receive benefits under the Investment  Code, enterprises must belong to the priority 
sectors, but the list is not exhaustive and may be amended (Table II.1).  In addition to the common 
incentives regime, four other preferential regimes ar e available:  the regime for small and medium-
                                                      
55 Decree No. 1994-1057 of 9 May 1994. S/WPGR/W/25/Add.5 
Page 40  
 
  sized enterprises, the regime for exporting enterp rises, the regime for enterprises developing local 
natural resources and raw materials, enterprises established in economically less developed zones 
(outside Conakry).  It is possible to obtain appr oval under several regimes provided that the criteria 
are met in each case and this is quite common.
56  According to the authorities, the main advantage of 
approval is exemption from VAT on imports of equipment needed during the start-up period or to 
extend the investment (with the exception of auto mobiles), an important amendment to the Code 
made under the 2002 Finance Law.  
Table II.1 
Investment Code – benefits under preferential regimes  
 
SME regime Exporting enterprises 
regime Regime for enterprises 
developing natural 
resources  Enterprises established in less 
developed zones 
Criteria Assets of GF 15 to 
500 milliona 
  
At least 5 jobs 
 Enterprises whose export 
turnover accounts for 
over 22% of total 
turnover Cost of intermediate 
consumption of Guinean 
origin exceeds 50% of total costs  
 
 The country is divided into four 
zones: 1-2-3-4
b 
  
Production enterprise in which at 
least 90% of the personnel work in the zone 
 
Service enterprise whose actual head office and principal area of 
activity are in the zone 
Priority sectors Agriculture, industrial processing, stockbreed ing and fishing, fe rtilizer production, health  and education  enterprises, 
tourism  facilities and industries, social  housing promotion, investment banks  or any other loan establishment outside 
zone 1 (Conakry) 
 
Guarantees Equal treatment for natural and legal persons, as  well as for foreigners and Guinean nationals 
 
Freedom to transfer capital 
 
Freedom of establishment, management, movement  Guinea has signed the ACP-EU, ICSID, MIGA and OHADA Agreements 
Common 
benefits 
    
 Exemption from duties and taxes (i ncluding VAT) on imports of goods, equipment and tools needed for the 
investment during the start-up period or for its extension (with the exce ption of automobiles) 
A single import duty of 6 per cent on raw materials used directly in product manufacture 
Exemption from the taxable base for the Impôt sur les  Bénéfices Industriels et Commerciaux  – IBIC (Tax on Industrial 
and Commercial Profits) or the IS for 3 to 8 years dependi ng on the zone in which the en terprise is situated and a 
reduction of 50% during the first tax year and 25% during the second following the period of exemption 
Exemption from the apprenticeship tax and the flat rate on sa laries for 5 years and 50% reduction of this tax during the 
following 3 years 
                                                      
56 According to the OPIP, 74 per cent of the projects approved from 1998 to 2000  qualified for two special regimes.  S/WPGR/W/25/Add.5 
 Page 41 
 
 
   
SME regime Exporting enterprises 
regime Regime for enterprises 
developing natural 
resources  Enterprises established in less 
developed zones 
Tax on 
industrial and commercial 
profits (IBIC) 
  
 
Other benefits 20% (instead of 35%) for 
5 years  
 
  
 
Exemption from the flat-rate minimum tax for 3 years 
 Exemption for 5 years 
according to the export turnover/total turnover 
ratio, but a maximum of 
60% of profits Reduction in the taxable 
base of the IBIC equivalent to 20% of the 
value of intermediate 
consumption of Guinean origin for the first 5 years Exemption from the IBIC for 3 to 
8 years depending on the zone in which the enterprise is situated  
 
  
 
Reduction of 20 to 60% of VAT for 5 years depending on the zone in which the enterp rise is situated 
a  The BCRG publishes the referen ce rate for the Guinean franc. 
b Zone 1:  the region of Conakry and the pr efectures of Coyah, Dubréka, Forécariah and Boké;  Zone 2:   the prefectures of Boffa , Fria, 
Kindia, Mamou, Dalaba, Pita, Labé, Dabola and Faranah;  Zone 3:  the prefectures of Kissidoug ou, Guéckédou, Ka nkan, Macenta, 
N’Zérékoré, Kouroussa and Télimilé;  Zone 4:  the prefectures  of Koundara, Gaoual, Mali, Lélouna, Tougué, Koubia, Lola, Sguri, 
Dinguiraye, Mandiana, Kérouané, Beyla and Yomou. 
Source : Guinean authorities. 
According to data for 1999-2003 provided by the Guinean authorities, 124 projects have been 
approved under the Investment Code, representing a total of GF 202 billion and the creation of 
4,467 jobs.  In the majority of cases, the promoters of approved projects are Guinean nationals. 
Bolivia - WT/TPR/S/154/Rev.1 
 
P. 69, para. 177 and 180  
As far as production incentives are concerned, me asures focus on particular sectors and there 
are also some general government policy provis ions.  Law No. 2.064 of 3 April 2000 (Economic 
Revival Law) provides tax incentives for the financial  sector, the capital market, tourism , investment 
in agriculture, mining and industry, consumption and municipalities. 
Law No. 2.064 states that property used exclusiv ely for hotels and part of the fixed assets of a 
hotel company is subject to the IPBI on the basis of 50 per cent of the taxable value until 2010.57  Law 
No. 2.074 of 14 April 2000 defines as export services the sale of tourism services outside Bolivia and 
accommodation services for foreigners in Bolivia.  Consequently, these tourism services pay zero 
VAT.58 
P. 118, para. 184  
 The rates applied by the railways must be approved by the ST.59 The trade policy reviews of 
Bolivia in 1993 and 1999 mentioned that Bolivia a pplies rates that discriminate between imports and 
exports carried by rail, with the former being mo re than 30 per cent higher than the latter in 1999.  
The authorities indicate that there is no government po licy granting preferences for exports in the cost 
of rail transport.  Nevertheless, there is informa tion that in practice such rates may be lower.  Rail 
companies have the right to compensation from the St ate if their earnings do not allow them to cover 
operating costs and this consists solely of fiscal credit notes made out to the enterprise.60 An 
                                                      
 57 Ibid. 
 58 Supreme Decree No. 26.077 of 19 February 2001, Article 11. 
59 Idem, Article 17. 
60 Idem, Articles 22 and 23. S/WPGR/W/25/Add.5 
Page 42  
 
  agreement between Ferroviaria Andina and the ST  specifies that the former receives financial 
compensation for the costs involved in re habilitating the Oruro-Cochabamba line.
61 The authorities 
explain that this compensation was the only one granted and that in practice compensation is not given.  In addition, all rail companies must pa y a regulation tax to the ST, which may not exceed 
0.5 per cent of their gross earnings, in order to cove r the ST's operating costs.  The authorities point 
out that companies also pay a service tax equivalent to 2.2 per cent of their earnings.  
P. 122, para. 203
 
 Law No. 2.074 provides two fiscal incentives fo r the sector (see Chapter III(4)).  For the 
purpose of paying the bound tariff, equipment to be used in hotels  is defined as capital goods (see 
Chapter III(2)).62 
Malaysia - WT/TPR/S/156/Rev.1  
 
P. 59, para. 91 and 92  
As noted in Malaysia's previous Review, the tax system is an important instrument of 
Malaysia's economic development strategy.  A wide range of investment incentives continue to be 
delivered through the tax system to promote resource -based industries;  high-tech industries;  new and 
emerging technologies;  strategic industries;  sk ills and human resource development;  manufacturing-
related industries like R&D, integrated logistics ;  regional establishments;  and IT industries . 
Tax incentives are provided for in a number of laws, including the Promotion of Investments 
Act, 1986;  Income Tax Act, 1967;  Customs Act, 1967;  Sales Tax Act, 1972;  Excise Act, 1976;  and 
Free Zones Act, 1990.  These Acts cover i nvestments in manufacturing, agriculture, tourism  and 
approved services sectors, as well as R&D, training, and environmental protection activities.  Direct 
tax incentives grant partial or total relief from inco me tax for a specified period while indirect tax 
incentives come in the form of exemptions from im port duty, sales tax, and excise duty (Tables III.9 
and III.10 summarize the direct and indirect tax incentives by sector and activity and recent changes 
that have occurred in the review period).   
Table III.9 
Direct and indirect tax incentives in Malaysia by sector and activity 
Incentive Manufacturing Agriculture Approved 
services 
projects Tourism R&D Training 
activity Environmental 
protection 
activity 
1. Pioneer Status X X  X X  Xo 
2. Investment Tax Allowance X X X X X X Xo 
3. Industrial Adjustment 
Allowance X       
4. Infrastructure Allowance X X X X    
5. Double deduction on 
expenses Xa Xc Xe Xg Xj Xl  
6. Single deduction on 
expenses Xb Xd Xf Xh  Xm  
7. Tax exemption on value of 
increased exports X X      
8. Accelerated Capital 
Allowance X X   X  Xp 
9. Reinvestment Allowance X X     Xq 
                                                      
61 ST, information on line. Available at: http://www.suptrans.gov.bo. 
62 Law No. 2.074, Article 25.  S/WPGR/W/25/Add.5 
 Page 43 
 
 
  Incentive Manufacturing Agriculture Approved 
services 
projects Tourism R&D Training 
activity Environmental 
protection 
activity 
10. Industrial Building 
Allowance X X X X  X  
11. Deduction for:  acquiring 
property rights;  acquiring 
a foreign-owned company;  
developing websites X       
12. Import duty and sales tax 
exemption on raw 
materials or components X X   Xk Xn Xr 
13. Import duty and sales tax 
exemption on machinery or equipment X X X X    
14. Duty drawback X X    X  
15. Deduction for capital 
expenditure on approved agricultural projects  X      
16. Additional incentives for 
food production and deep sea fishing  X      
17. Accelerated Agriculture 
Allowance on planting of rubber wood trees  X      
18. Income tax exemption   X Xi    
 
a For promotion of exports;  R&D;  training;  freight charges;  insurance premium;  overseas promotion;  and promotion of local  
brand names. 
b For pre-operating expenses on approved investment overseas;  pre-operating training expenses;  contribution in cash to techni cal 
or vocational training institutes;  donation to approved organization for the promoti on and conservation of environment;  gifts  
under Section 44 (6A) and 34 (6);  providi ng practical training to non-employees;  managing and operating RosettaNet Malaysia;  
promotion of export;  and drafting corporate knowledge-based masterplan. 
c For promotion of exports;  R&D;  and insurance premium. d For pre-operating expenses on approved investment overseas;  donation to approve d organization for the promotion and 
conservation of environment;  and gift s under Section 44 (6A) and 34 (6). 
e For promotion of exports of services;  R&D;  and training. f For pre-operating expenses on approved investment  overseas;  and pre-operating training expenses. 
g For promotion of exports;  and training. 
h For pre-operating expenses on approved investment  overseas;  and pre-operating training expenses. 
i For tour-operators;  organizer of international conference or  trade exhibition;  cars and motorcycle racing;  repair and 
maintenance of luxury boat and yacht in Langkaw i;  and chartering services of luxury yacht. 
j For non-capital expenditure incurred on R&D;  a nd expenses Payment for the use of services. 
k Import duty and sales tax exemption on materials, samples and equipment. 
l Double deduction on expe nses for training. 
m Single deduction on expenses for:  pre-ope rating training expenses;  contribution in cash to technical or vocational training  
institutes;  and providing practi cal training to non-employees. 
n Import duty and sales tax exemption on materials, samples and equipment. 
o Pioneer Status or Investment Tax Allowan ce for carrying out promoted activity such as :  forest plantation;  recycling of prod ucts;  
storage, treatment and disposal of danger ous toxic and hazardous waste;  energy cons ervation;  and utilizing biomass as a new 
source of energy. 
p Accelerated Capital Allowance for environmental protection equipment. 
q Reinvestment Allowance for moderniz ing chicken and duck rearing system. 
r Import duty and sales tax exemption on machiner y and equipment;  and on catalytic converters. 
 
Source:  Ministry of Finance. 
Table III.10 
Main direct tax incentives for investment and recent changes 
Type of incentive Description of incentive 
Pioneer status (PS) Different degrees of exemption depending on the types of promoted  products or activities;  full exemption o f 
income tax (100% of the statutory income for five years) for companies producing high-technology products 
or associated activities;  income tax exemption on 85%  of statutory income for five years for companies 
producing products or  conducting activities in areas currently being promoted.  
2004:  PS with tax exemption of 100% (previously  85%) on statutory income for five years. 
2003:  A PS company intending to reinvestment before e xpiry of its PS will be eligible for RA on condition 
that the pioneer certificate is surrendered. Companies investing in knowledge intensive activities ar e granted "Strategic knowle dge–based status", i.e. 
eligibility for PS with tax exemption of 100%  of statutory income for five years. S/WPGR/W/25/Add.5 
Page 44  
 
  Type of incentive Description of incentive 
Investment tax 
allowance (ITA) Alternative to PS, designed for projects with large cap ital investment and long ge station periods involves a 
tax credit that can be offset against taxes paid on 70% of statutory income;  any unutilized part of the 
allowance can be carried forward to subsequent years un til the whole amount is used up.  The ITA is usually 
60% of qualifying capital expenditure incurred within a five-year period. 
2004:  ITA of 100% (previously 80%) on qualifying capital e xpenditure incurred for five  years, to be utilized 
against 100% (previously 85%) of statutory income. 
2003:  Companies which invest in knowledge intens ive activities granted:  "Strategic knowledge–based 
Status" whereby the company is eligible for ITA of 60% on the qualifying capital expenditure incurred 
within a period of five years.  The allowance can be of fset against 100% of the statutory income in year of 
assessment. 
Reinvestment allowance 
(RA) Like the ITA, this is a tax credit amounting to 60% of qualifying capital expenditu re that can be offset 
against taxes paid on 70% (100% in  designated regions) of statutory income.  Granted to manufacturing 
companies that have been operating for at least 1 year and incur qualifying capital expenditure for the 
expansion, upgrading, modernizati on or automation of production capacity and diversification into related 
products.   
2002:  To encourage companies to reinvest.  RA incentives extended from 5 to 15 consecutive years 
commencing from the year the first reinvestment is made. 
Industrial adjustment allowance (IAA) Available to companies in selected manufacturing s ectors, namely wood-based textiles, machinery and 
engineering, stamping, molding, t ools and dies, and the machinery sub- sector.  Approved companies granted 
an allowance of 60% to 100% based on the industrial activities undertaken.  The al lowance can be used to 
offset up to 100% of adjusted inco me in the year of assessment.  
Infrastructure allowance 
(IA) Available to any resident company in Malaysia engage d in manufacturing, agricultu re, hospitality, tourism or 
other industrial/commercial activity in  Sabah, Sarawak and the designated eastern corridor of peninsular 
Malaysia.  Companies are granted an allowance of 100% of capital expenditure or infrastructure.  The 
allowance can be utilized to offset up to 85% of  statutory income in the year of assessment. 
Export incentives:   
Double deductions  Allowed for the following expenses related to exports: e xpenses related to the promotion of exports, freight 
charges for rattan and wood products (only for manufactur ers in Sabah and Sarawak), export credit insurance 
premiums, and the promotion of Malaysian brand names. 
Exemption for the value of increased exports  Companies' statutory income equivalent to 10% and 15%  of the value of increased exports is exempt from 
tax provided the goods exported attain at l east 30% and 50% value-added, respectively. 
Industrial building 
allowance  An allowance of 10% of qualifying expenditure is gran ted in respect of buildings used as warehouses for 
storing goods for export and re-export. 
Incentive for operational headquarters (OHQs) Companies granted OHQ status are subject to a conce ssionary tax rate of 10% on income from qualifying 
services for a period of 5 years (which may be extended for another five years). 
2004:  Qualifying services provided by an OHQ to its related companies in Mala ysia given tax exemption 
provided such income does not exceed 20% of the OHQ income from qualifying services. 2003:  Incentives for OHQs enhanced;  OHQs exempted from income tax for ten years and the dividends 
paid from the exempt income is exem pted in the hands of shareholders. 
Exemption for shipping 
operations Shipping  company income derived or deemed to be deri ved from the operations of Malaysian ships is 
exempt from tax. 
Source:  MIDA, Malaysian authorities. 
Israel - WT/TPR/S/157/Rev.1  
 
P. 83, para. 104  
The new Shipping and Ports Authority of the Israeli Ministry of Transport is responsible for 
implementing national policy on merchant shipping and sea-port services .  The Shipping and Ports 
Authority is also in charge of ratifying and in corporating international maritime conventions into 
domestic laws.  The main legisl ation is the 1971 Ports Ordinance (New Text), the Shipping Law 
(Vessels) of 1960, the Shipping Law (Seaman) of 1973, and the Shipping Law (Limit of Liabilities for 
Vessels) of 1965.  The first phase of the refo rm programme, implemente d between 1996 and 1999, 
reduced the number of mandatory Israeli crew fro m 22 to 10 and was supporte d with a total subsidy 
of US$25 million.  The second phase, implemented between 1999 and 2003, reduced the mandatory 
Israeli crew to between four and eight, including th e captain. It was supported by a total State subsidy 
of some US$25 million.  S/WPGR/W/25/Add.5 
 Page 45 
 
 
  P. 84, para. 108  
In 2004, the Government started gran ting annual financial aid to Israeli flag ships  of up to 
NIS 20 million for employing Israeli nationals on board, and up to NIS 8 million to energy ships (tankers, coal carriers, etc.). This policy is to be implemented until 2008.  Israel imposes no 
limitations on foreign direct investment in maritime  transport.  To fly the Israeli flag, a vessel is 
required to be at least 50% owned by an Israeli en tity.  However, exemptions  are legally allowed.  
Israel has no restrictions on maritime cabotage;  however, the authorities are considering cabotage 
measures based on the principle of reciprocity with third countries.  Conference agreements operative 
in Israel require an exemption from antitrust law (the Restrictive Business Practices Law of 1988), which may be withdrawn if there is cartel-like usage. 
P. 87, para. 127
 
The Ministry of Tourism operates as a commercial entity and develops the tourism  
infrastructure with the help of regional and national development companies.  It also assists in establishing tourism business initiatives (e.g. tourist attractions, hotels, accommodation units in rural 
tourism) throughout the country.  This is ma de possible by government grants under the 
Encouragement of Capital Investments Law (Chapter  III(4)(i)).  The Ministry of Tourism is also 
responsible for the marketing strategy of the tourist industry.  Accordingly, its Marketing 
Administration, via the Government Tourism Offices abroad, performs numerous marketing operations in cooperation with local  tourism establishments.  Forei gn tourists are exempt from the 
VAT.  
Angola - WT/TPR/S/158/Rev.1 
 
P. 74, para. 96  
The basic law governing electric power is La w 14-A/96 of 31 May 1996.  The law provides 
for a mixed public-private structure of electric ity production and distribution.  The fundamental 
responsibility for electric power production and distri bution is in the hands of the Rede Nacional de 
Transporte de Energia Eléctrica (RNT).63  The State may grant concessions for public production, 
transportation and distribution of electricity  to public or private operators, and each installation must 
also be licensed.  Electricity tariffs are to be set  by the RNT with the joint objective of assuring "the 
lowest possible price to the consumer compatible with quality of service provided" and "a reasonable 
level of productivity".64  If the authorities decide to subsidi ze electricity supply at an unprofitable 
level of price, operators are to be compensated. 
Djibouti - WT/TPR/S/159/Rev.1 
 
P. 18, para. 40  
The law provides for two separate regimes depe nding on the amount of the investment project 
(Table II.1).  Regime A gives tax benefits in the form of exemptions or abatements for 12 categories 
of economic, industrial or commercial activity invo lving minimum investment of DF 5 million and 
creating a minimum of 15 permanent jobs within  a period of 18 months.  Regime B concerns 
enterprises of special economic or social interest  with minimum investment of DF 50 million and 
creating a minimum of 30 permanent jobs within a period of 18 months.  Between 2000 and 2003, 
                                                      
63 Law 14-A/96, Article 9. 
64 Law 14-A/96, Article 41. S/WPGR/W/25/Add.5 
Page 46  
 
  there were 26 approvals under Regime B and five under Regime A for investment of 
US$173.2 million and US$934.3 thousand, respectiv ely, divided among the following sectors: 
transport  (68.7 per cent), industry (29.1 per cent) and tourism  (1 per cent).  In 2004, there were four 
approvals under Regime B for a total investment  of US$12.9 million and five under Regime A for a 
total investment of US$841.5 thousand. 
Table II.1 
Criteria and benefits under the Investment Code, 2005 
Regime Activity Benefits 
A (i) Exploitation, preparation or processing of 
products of plant or animal  origin, irrespective of 
their source; 
(ii) Offshore fishing, a nd the preparation, freezing, 
processing or storage of fish products; 
(iii) Mining, treatment or  processing of mining or 
metal products, irrespective of whether they are 
mined in Djibouti or not;   
 (iv) Prospection, exploitation, storage of any source of 
energy, and refining of hydrocarbons; 
(v) Creation, operation of establishments responsible 
for developing tourism  and handicrafts; Exemption from the business licence contribution during the year 
in which the facilities start up or  the activity is launched and for 
the following five years, but payment of the business licence fee, 
except on imports required for the investment that are exempt. 
 (vi) Creation, exploitation of electricity, electronics, 
chemicals and ship industries; 
(vii) Land, maritime or air transport ; 
(viii) Port and airport activities; (ix) Building, repair and maintenance of maritime 
transport or fisheries vessels; 
(x) Manufacture, packaging on the spot of consumer 
products or goods; Exemption from the internal c onsumption tax (TIC) and import 
taxes and surcharges on materials and equipment needed to carry 
out the investment programme a nd appearing on the quantitative 
and qualitative list attached to the approval decree, with the 
exception of petroleum products, spare parts and passenger 
vehicles.  Raw materials, with the exception of petroleum 
products, imported and actually used during the first five years of 
manufacturing, are exempt from the TIC. 
 (xi) Banking  or loan activities likely to promote new 
investment, as well as warrantage activities (credit, warehousing); Materials and equipment exempted may not be transferred, sold, 
loaned or utilized for purposes other than those covered by the 
approval decree for a period of 10 years. 
 (xii) Consultancy, engineering activities, computer 
data processing, data base computer servers .  
B (i) Construction of buildings exclusively for 
industrial, commercial or tourism use; 
(ii) Construction of social housing;  (iii) Construction, creation and operation of teaching 
and training facilities . Exemption from the business licence contribution during the year 
in which the facilities start up or  the activity is launched and for 
the following 10 years, but payment of the business licence fee, except on imports required for the investment that are exempt. 
Exemption from the internal c onsumption tax (TIC) and import 
taxes and surcharges on materials and equipment needed to carry out the investment programme a nd appearing on the quantitative 
and qualitative list attached to the approval decree, with the 
exception of petroleum products, spare parts and passenger vehicles.  Raw materials, with the exception of petroleum products, imported and actually used during the first 10 years of 
manufacturing, are exempt from the TIC. 
Exemption from land tax on buildin gs (for building construction) 
for a period of 10 years as of the year following the completion of 
the work. 
Exemption from industrial and commercial profits and tax on the 
profits of legal persons within the limit of a maximum of 10 years 
as of the start-up date. 
Exemption from the graduate d duty on registration of acts 
attesting to the establishmen t of companies with capital 
investment of DF 30 million or more.  The same exemption may 
apply to capital increases of DF 10 million or more within at least 
five years after approval or after a previous increase exempted for 
the same reason.  Possibility of partial exemption from duties on 
taking out or termin ating mortgages. 
Registration and land registry duties may be halved when they 
apply to the purchase of green-fie ld sites or land with buildings 
intended for demolition within a period of three months in order to carry out the investment approved.  S/WPGR/W/25/Add.5 
 Page 47 
 
 
  Regime Activity Benefits 
Authorization for temporar y occupation and provisional 
concessions in the private domain related to the investment may 
be given at reduced cost. 
Possibility of exemption from the building permit tax. Materials and equipment exempted may not be transferred, sold, 
loaned, or utilized for purposes ot her than those covered by the 
approval decree for a period of 10 years. 
Source:  Law No. 58/AN/94/3èmeL of 18 October 1994 establishing the Inve stment Code and Ar ticle 28.15.31 of 
Law No. 108/AN/00/4èmeL of 29 October 2000 on reforming the General Tax Code. 
P. 64, para. 72  
Poste de Djibouti (Djibouti Post) (PD) is a pub lic limited company that came into being 
following the separation, in 1999, of the activities previously carried out by the OPT.  Its initial 
capital was set at DF 1 billion, entirely held by the State.  The Ministry of Communications and Culture, responsible for postal  and telecommunications services, is the supervisory authority.  As an 
exceptional measure, the State will take over the PD's total debt of DF 107,225,007, representing 
payments arrears for 1999 to 2002 owed to supp liers, service providers, the authorities and foreign 
partners.
65  The company receives a subsidy from the St ate and is currently being restructured. 
United States - WT/TPR/S/160/Rev.1 
 P. 66, para. 206
 
The American Jobs Creation Act of 2004 also introduced a phased-in, 9% tax deduction for 
certain producers, including:  manufacturers;  software  companies;  film production  companies;  
electric, gas, and water companies;  construction  companies;  and engineering and architectural  
firms.  The deduction is a percentage of the l esser of "qualified production activities income" or 
taxable income, and is limited by wages.66  Eligible companies may claim a deduction of 3% in 2005-
06, 6% in 2007-09, and 9% thereafter.  The Congressi onal Budget Office estimates the cost of the tax 
deduction for producers at US$76.5 billion over 2005-14. 
P. 110, para. 126 and 127  
A number of programmes are in place to allow fo r the eventual use of  the U.S. commercial 
fleet for defence purposes.  The Maritime Security  Program (MSP) supports the U.S.-flag merchant 
marine by providing a fixed payment to U.S.-flag vessel operators .  The ten-year MSP provides 
funding for 47 vessels to ensure that a certain num ber of militarily useful vessels from the commercial 
fleet are available to meet U.S. sealift requirements in time of war or national emergencies.  Funding 
of up to US$98.7 million per year is authorized through FY 2005, but must be appropriated by the 
U.S. Congress every year.  In FY 2004, direct pa yments of US$98.7 million were made by MARAD 
for the MSP.67  The current MSP expires at the end of FY 2005. 
A new ten-year programme begins 1 October 2005 and provides funding for 60 ships 
receiving MSP assistance subject to annual Congressiona l appropriations.  The authorized funding for 
                                                      
65 Order No. 2003-0275/PR/MCCPT of 3 April 2003. 
66 Section 199(c), American Jobs Creation Act of 2004. 
67 MARAD (2003a). S/WPGR/W/25/Add.5 
Page 48  
 
  FY 2006 through FY 2008 is US$2.6 million per vessel annually;  it increases to US$2.9 million 
per vessel annually for FY 2009-11, and US$3.1 million during FY 2012-15. 
P. 112-113, para. 137, 139 and 140
 
Under the Port Security Grants (PSG) Program, owners and operators of U.S. ports and 
terminals, U.S. inspected passenger vessels and ferries , as well as port authorities and state and local 
agencies, may benefit from grants from the U.S. Department of Homeland Security, Office of 
Domestic Preparedness, to improve security for operators and passengers through physical security 
enhancement.68  In FY 2005, 66 U.S. ports were elig ible for funding and US$140.9 million were 
allocated for the programme.69 
MARAD provides financial assistance to ship-own ers and U.S. shipyards through the Federal 
Ship Financing Program (Title XI), established pursu ant to Title XI of the Merchant Marine Act, 
1936, as amended.  This programme , consists of federal government  guarantees of private-sector 
financing or refinancing obligations  for ship construction or reconstr uction of U.S. and foreign-owned 
vessels in U.S. shipyards.  The guarantee is based on the "actual cost" of the vessels or the technology 
used in shipbuilding, which generally includes the cost of construction, reconstruction, or 
reconditioning of the vessel, together with c onstruction period interest and the guarantee fee.70  The 
guarantees are up to 87.5% of the value of the project, for up to 25 years depending on the type of project.  In FY 2004, new applications from two companies for projects totalling US$178 million were approved, representing US$152 million in guara ntees.  Three applications were approved in 
FY 2003 for projects costing US$446.6 milli on with guarantees of US$345.4 million.  On 
30 September 2004, Title XI guarantees totalling US$3. 5 billion were outstanding, and applications 
totalling over US$1.5 billi on were pending approval. 
Under the Capital Constructi on Fund (CCF) and Constructio n Reserve Fund (CRF), U.S. 
citizens owning or leasing vessels may obtain tax bene fits to construct qualified vessels.  The CCF 
provided tax-deferral benef its to vessel operators in U.S.-foreign commerce, Great Lakes operations, 
non-contiguous domestic trade, and U.S. fisheries.  CCF vessels must be built in the United States and 
documented under the laws of the United States.
71  The stated purpose of the CCF is to make up for 
the competitive disadvantage operators of U.S.-flag  vessels face in the construction and replacement 
of their vessels relative to forei gn-flag operators whose vessels are registered on countries that do not 
tax shipping income.  The CRF is a financial assist ance scheme that provides tax-deferral benefits to 
U.S.-flag operators with respect to gains attribut able to the sale or loss of a vessel, provided the 
proceeds are used to expand or m odernize the U.S. merchant fleet. 
P. 114, para. 151  
The DOT manages federal support programmes fo r services to remote areas.  The main 
programmes are the Essential Air Service (EAS ) Subsidy Program, under which approximately 
US$100 million are spent per year72, and the Small Community Air Service  Development Pilot 
Program, under which funds were appropriated for th e first time in FY 2002.  Under the small 
community Programme US$19.8 million was ava ilable for grant awards in FY 2004 and 
US$20 million in FY 2005.  No limits are set on the amounts of individual awards;  since the 
                                                      
68 Transport and Security Administration online in formation.  Available at:  http://www.tsa.gov/ 
public/. 
69 U.S. Department of Homeland Security (2005). 
70 MARAD online information.  Available a t:  http://www.marad.dot.gov/TitleXI/crf.html. 
71 MARAD online information.  Available a t:  http://www.marad.dot.gov/TitleXI/crf.html. 
72 DOT, Office of Aviation Analysis, Essential Air Se rvice Program.  Available at:  http://ostpxweb. 
dot.gov/aviation/X-50%20Role_files/EAS.htm#Reports.  S/WPGR/W/25/Add.5 
 Page 49 
 
 
  beginning of the programme, they have ranged from US$85,000 to nearly US$1.6 million.  Apart 
from support at the federal level, incentives may be gr anted at the state and local level, especially for 
airports in small and mid-size cities.73 
People's Republic of China - WT/TPR/S/161/Rev.1 
 
P. 118, para. 195  
Business tax is a local tax covering domestic taxable services, transfer of intangible assets, 
and sales of immovable property, excluded from the VAT (Table III.11);  it is not levied on imports.  The tax is assessed on business turnover.  Deductions are permitted for agency and transportation 
services .  The rates range from 3% to 20% depending on the services provided.  Recent adjustments 
to the business tax appear to include raising th e taxable threshold from earnings of Y 1,000 to 
Y 5,000 per month or above Y 100 per day or transaction. 
Table III.11 
Business tax rates 
Taxable item Rate (%) 
Communications and transportation 3 
Construction 3 
Financial and insurance business 5 
Post and telecommunications services 3 
Culture and sports 3 
Entertainment 5-20 
Services (including agencies, hotels, food a nd beverages, tourism, warehousing, leasing, 
advertising)  5 
Transfer of intangible assets 5 
Sale of immovable property 5 
Note: Business tax exemptions may be ava ilable for:  nursing services provided by nurseries, kindergartens, old people's homes,  
welfare institutions for the handicapped;  ma tchmaking and funeral services;  services  provided individually by the disabled to  
the public;  medical services provided by hospitals , clinics and other medical institutions;  educational services  provided by 
schools and other educational institutions and services provide d by students in part time work;  agricultural mechanical 
ploughing, irrigation and drainage , prevention and treatment of plant diseases a nd insect pests, plant protection, insurance fo r 
farming and animal husbandry, and related t echnical services;  breeding and prevention and treatment of diseases of poultry, 
livestock, and aquatic animals;  admission fees for cultural activities conducted by me morial halls, museums, cultural centres,  art 
galleries, exhibition halls, academies of painting and calligraphy , library and cultural protectiv e units, and for cultural and  
religious activities on religious premises. 
Source:  Beijing Local Taxation Bureau online information.  Avai lable at:  http://english.ta x861.gov.cn/zgsky/zgsky.htm 
[29 November 2004];  and information provided by the authorities.  
P. 120-122, para. 199  
China also appears to give special preferenc es to priority sectors, including agriculture, 
forestry, livestock and fisheries industries, transportation , energy , high technology industries, 
industries that protect the environment, and "industr ies that use resources in an integrated manner". 
                                                      
73 GAO (2003). S/WPGR/W/25/Add.5 
Page 50  
 
  Table III.12 
Income tax concessions and preferences for foreign-invested enterprises 
Preferential tax rate of 15% 
FIEs in the Shenzhen, Zhuhai, Sh antou, Xiamen and Hainan SEZs; 
FIEs engaged in production and establishe d in economic and technological developm ent zones approved by the State Council; 
FIEs established in the Pudong New Area in Shanghai; Technology-based FIEs in old urban distri cts of SEZs, economic and technological deve lopment zones, and coastal economic open 
areas approved by the State Council with long investment recovery periods and fo reign investment exceeding US$30 million; 
FIEs engaged in energy, transport, and port construction projects ; 
FIEs engaged in export pr ocessing in bonded zones; 
High technology FIEs in new and high tec hnology industrial development zones at st ate level approved by the State Council. 
Preferential tax rate of 24% 
Production FIEs based in the old urban districts of coastal economic open areas, special economic zones, and economic and 
technological development zones where the 15% preferential tax rate is not applicable; 
open coastal cities, open cities along the Yangtze River and in in land and border regions, as well as other areas designated by  the State 
FIEs in Council; 
FIEs in State tourist  resorts. 
Tax exemptions or reductions 
Production FIEs with an operating period of over ten years (excluding oil, natural gas,  and rare and precious  metal exploration ):  
eligible for tax exemption for the first tw o profit-making years and 50% reduction in the following three years;  with SAT appr oval 
FIEs engaged in agriculture, forestry, and animal husbandry or es tablished in economically backward and remote border areas may  pay 
a reduced rate between 15% a nd 30% for another ten years; 
Foreign joint ventures engaged in port and wharf construction and with an operating pe riod of over 15 years:  eligible for a co rporate 
tax exemption for the first five-profit making years, followed by a 50% reduction in the corporate tax rate for the next five y ears;   
Infrastructure projects in airports, ports, wharfs, railways, highw ays, power stations, coal mines and water conservation, as w ell as 
agricultural development in the Hainan SEZ with an operating period of over 15 years:  eligible for a corporate tax exemption d uring 
the first five years, followed by a 50% reduction for the next five years; 
FIEs providing services in the SEZs with foreign investment over US$5 million and with an opera ting period of over ten years;  and 
foreign invested banks, Sino-foreign joint venture banks and other financial instituti ons in SEZs and other areas designated by  the State 
Council with foreign capital investment exceeding US$10 million and w ith an operating period of over ten years:  eligible for c orporate 
tax exemption in the first profit-making year followed by a 50%  reduction in the second and third years upon approval from the local 
tax authorities; 
Recognized high tech Sino-foreign joint venture enterprises in state level high technology develo pment zones with an operating period  
Tax exemptions or reductions 
Production FIEs with an operating period of over ten years (excluding oil, natural gas,  and rare and precious  metal exploration ):  
eligible for tax exemption for the first tw o profit-making years and 50% reduction in the following three years;  with SAT appr oval 
FIEs engaged in agriculture, forestry, and animal husbandry or es tablished in economically backward and remote border areas may  pay 
a reduced rate between 15% a nd 30% for another ten years; 
Foreign joint ventures engaged in port and wharf construction and with an operating pe riod of over 15 years:  eligible for a co rporate 
tax exemption for the first five-profit making years, followed by a 50% reduction in the corporate tax rate for the next five y ears;   
Infrastructure projects in airports, ports, wharfs, railways, highw ays, power stations, coal mines and water conservation, as w ell as 
agricultural development in the Hainan SEZ with an operating period of over 15 years:  eligible for a corporate tax exemption d uring 
the first five years, followed by a 50% reduction for the next five years; FIEs providing services in the SEZs with foreign investment over US$5 million and with an opera ting period of over ten years;  and 
foreign invested banks, Sino-foreign joint venture banks and other financial instituti ons in SEZs and other areas designated by  the State 
Council with foreign capital investment exceeding US$10 million and w ith an operating period of over ten years:  eligible for c orporate 
tax exemption in the first profit-making year followed by a 50%  reduction in the second and third years upon approval from the local 
tax authorities; 
Recognized high tech Sino-foreign joint venture enterprises in state level high technology develo pment zones with an operating period 
of over ten years:  exempt from corporate income tax during th e first two profit-making years with the approval of the tax auth orities;  
foreign-invested export-oriented enterprise s with export values of over 10% of their total output value, and foreign-invested h igh tech 
enterprises whose status remains unchanged:  entitled to a lower co rporate tax rate of 15% or 10%  following the expiry of the c orporate 
income tax exemption period. 
Tax concessions for central and western regions 
FIEs under the "encouraged" category in the western region of Chin a that are eligible for a two-year income tax exemption follo wed by 
a three year tax reduction by half:  eligible for a reduced cor porate tax rate of 15% for three more years;  FIEs recognized as  high tech 
or export oriented, exporting over 70% of th eir annual output:  eligible for a 50% reduc tion in corporate income tax during the se three 
years although the tax cannot fall below 10%.  It is not clear whet her this means that the tax rate can be between 10% and 50%.  
Source:  Hong Kong TDC Research Department (undated), Guide to Doing Business in China (2004/05) .  Available at:  
http://www.tdctrade.com/chi naguide/eng/04/4-2.pdf.   S/WPGR/W/25/Add.5 
 Page 51 
 
 
  P. 124, para. 204  
No data were available on any direct assistance with regard to services and utilities.  Indirect 
measures are used, such as price controls (elect ricity, oil, telecommunication services) as well as a 
recent injection of US$45 billion to partially bail out two state-owned banks  to prepare them for 
restructuring and eventual listing on the stock exchange. 
P. 216, para. 172 and 173  
Despite partial reform attempts, the history of  state involvement in and control over China’s 
banking  sector has resulted in significant governance and financial problems.  The SOCBs 
accumulated large portfolio's of NPLs as a result of lending to SOEs.  Estimates of the size of the NPLs vary, but figures released by the SOCBs in  2001 showed a range from around 18% at the CCB 
to over 40% at the ABC.  Independent estimates put  NPLs at between 30% and 60% of total loans, 
with the SOCBs having the largest share.
74  Several attempts have been made to address the problems 
of the SOCBs, including through cash infusions  and purchase of NPLs.  For example, in 1999 
Y 270 billion was injected into the four SOCBs, and Y 1.4 trillion of NPLs were purchased and 
transferred to four special asset management companies (AMCs), all owned by the Ministry of 
Finance.  According to the authorities, the AMCs, which were given ten years to recover what they 
could, had disposed of around Y 940 billion by  the end of 2004, of which around Y 430 billion 
(around 30%) was at the final stage of disposal.  The AMCs are expected to complete the disposal of 
their debts by 2006.75 
Most recently, in 2003/04, the Government used US$45 billion of its foreign exchange 
reserves to partially bail out two SOCBs (Bank of China and the China Construction Bank) to prepare 
them for possible listing on the stock exchange (see below).76  The Government created a state-owned 
entity, Huijin Investment, to manage the Government's investment in the two banks.77  Banks were 
also warned to stop lending to customers with  poor credit records.  However, the financial 
performance of the SOCBs remain s poor.  The average NPL ratio, especially among the SOCBs has 
remained high, at 20% of outstanding loans, with 8% for the joint-stock commercial banks at the end 
of 2003.  More recently, the CBRC announced that th e NPL ratio in the 16 la rgest banks (four SOCBs 
and the 12 joint-stock banks) fell from 17.8% at the end of 2003 to 13.2% by the end of 2004;  by 
September 2005, the figure had fallen further to 8.7%.78  However, it has been suggested that because 
these figures do not reflect the NPLs that were transf erred to the AMCs in 1999, and a further transfer 
of bad loans from the two "pilot" SOCBs as part  of their recapitalization, they are actually 
underestimates.79  The banks also have a substantial number of special mention loans that are 
considered performing, but have a higher risk of  becoming non-performing in the future.  At end 
2002, the share of such loans wa s 14% for the Bank of China, 19% for CCB and 12% for ICBC.  
Another problem is the low CARs among the SOCBs.   The average CAR for the four banks was 6.8% 
                                                      
74 Green (2003). 
75 CBRC (undated a). 
76 US$23 billion of this was injected into the China Construction Bank at the end of 2003. 
77 Huijin's senior staff seem to come mainly from the PBC, the State Administration of Foreign 
Exchange (SAFE), and the Ministry of Finance.  It thus  seems likely that once the tw o SOCBs are listed on the 
stock exchange, Huijin would retain majority ownership of  these banks (Royal Institute of International Affairs, 
2004). 
78 CBRC online information.  Available at:  h ttp;//www.cbrc.gov.cn/english/ [6 April 2005]. 
79 A large part of the outstanding NPLs transferred to  the AMCs remains to be resolved.  For example, 
as of September 2003 the AMCs had disposed of around 30% of the stock of NPLs that they had originally assumed (Prasad, 2004).  It has also been suggested that if these NPLs were added to the total figure given by 
the CBRC, the figure would rise from 13.2% to 19.8% ( China Economic Quarterly , 2005, Q1, pp. 10-11). S/WPGR/W/25/Add.5 
Page 52  
 
  at the end of 2004, still below the required 8%
80;  the total number of banks  meeting this requirement, 
including the City Commercial Banks, rose from eight at the beginning of 2004 to 33 by June 2005.81  
It is also estimated that the return on assets of  the Chinese banking sector is less than 0.5%, worse 
than for many countries in the region.82  In addition, largely as a result of these problems, the private 
sector has tended to use forms of financing other than through banks. 
P. 286-289, table AIII.6  
Table AIII.6 
Subsidies as notified to the WTO 
Scheme and eligibility Incentives Annual value 
 
[...] 
   
Preferences for the SEZs (exclu ding Pudong Ar ea of Shanghai)    
Foreign invested enterprises esta blished in the SEZs and foreign 
enterprises engaging in production and business in the SEZs;  service 
sector enterprises  with foreign investme nt over US$5 million and 
operating over a ten-year period  Preferential income tax rates of 
between 15% or 24% (standard 
rate of 33%) or exemption from income tax .. 
Preferential policies for the economic and technology development 
areas    
Foreign invested productive enterprises in the economic and 
technology development area;  foreig n invested productive enterprises 
established in the old areas of the c ities where the zones are located;  
technology intensive projects, proj ects having foreign investment of 
over US$30 million with a long payback period, and projects in sectors 
encouraged by the State such as energy and transportation Preferential tax rates of 15% or 
24% (standard rate of 33%) .. 
Preferences for the Special Economic Zone of the Pudong Area of 
Shanghai    
Foreign invested productive enterprise s established in the SEZ of the 
Pudong Area of Shanghai and for fore ign invested enterprises engaged 
in construction of infrastructure;  foreign invested enterprises engaged 
in energy and transportation projects such as airports, ports, railways, 
power stations etc. expected to  operate longer than 15 years. Income tax rate of 15%.  For 
foreign invested enterprises 
engaged in energy and 
transportation projects expected 
to operate longer than 15%, income tax for the first 5 years from when the project becomes 
profitable, is exempted.  Between 
the sixth and tenth years of profitability, income tax is 
reduced by 50%. .. 
Preferences for foreign invested enterprises    
Foreign invested productive enterprises operating for ov er ten years Income tax exemption for the first 
two years;  income tax for the 
third to fifth years is reduced by 
50% .. 
Chinese-foreign joint enterprises engaged in the construction of ports, 
docks and berths Income tax rate of 15%.  Income 
tax exemption for the first 5 years 
is for those operating for over 15 years;  and 50% reduction in 
income tax for the sixth to the 
tenth years. .. 
[...] 
  .. 
                                                      
80 In the case of the Agricultural Bank of China, the CAR at the end of 2002 was estimated to be as low 
as 1.44 (Pei and Shirai, 2004). 
81 CBRC (undated a). 
82 "Special Report:  China's banking industry", Economist, 29 October 2005.  S/WPGR/W/25/Add.5 
 Page 53 
 
 
  Scheme and eligibility Incentives Annual value 
Income of foreign investors without commercial establishments in 
China (eg. dividends, interest, rentals, franchising fees)  Income tax rate of 20% except for 
foreign investors' profit from their 
enterprises in China, which are entitled to 100% tax exemption .. 
Income of foreign investors without commercial ente rprises in China Preferential income tax rate of 
20%;  10% for franchising fees 
from provision of special 
technology to scientific research, energy, transportation, agriculture, forestry and animal 
husbandry;  tax exemption may 
be applied for advanced technology .. 
[...]   
Loans from State Policy Banksd   
State Development Bank:  infrastr ucture development in energy, 
transportation, telecommunications, water conservation, resource 
development in central and west ern parts of China as well as 
technology renewal Loans at low rates of in terest State Development 
Bank:  Y 200 billion of 
which 9.6% for the 
manufacturing sector 
Export and Import Bank of China:  loans to guarantee export credit by commercial banks and for direct export credit  Export and Import Bank 
of China:  Y 21 billion 
Agriculture Development Bank of China:  loans for purchase and 
storage of agricultural products, forestry, construction and water 
conservation  Agricultural 
Development Bank of 
China:  Y 500 billion 
[...] 
   
n.a. Not applicable. 
.. Not available. 
a According to China's statement to the Committee on Subsidie s, these were eliminated in 2001 (WTO document G/SCM/W/522, 
11 November 2002). 
b According to China's statement to the Committee on Subsidies, th ese were eliminated in 2001 under a Decree of the Ministry of  
Finance on 11 December 2001  (WTO document G/SCM/W/522, 11 November 2002). 
c Tariff reductions and exemptions granted before 1 April 1996 for imported equipment and mate rial for foreign invested 
enterprises, for domestic technology renova tion and infrastructure construction project s, for SEZs and Economic and Technology 
Development Areas, for border trade, pro cessing trade and compensation trade, was to  be terminated except for the following 
transitional periods granted: 
 - for foreign invested enterprises with total investment of under US$30 million approved befo re 1 April 1996, tariff reduction s 
and exemptions for imported equipment and material would remain valid until 31 December 1996;  for enterprises with 
investment above US$30 million, the trans itional period would end on 31 December 1997; 
 - for industrial projects in areas such as energy, transporta tion, metallurgy, with investme nt of over Y 50 million and for 
technology renovation projects in manufact uring with investment of over Y 30 million, which were  approved before 
1 April 1996, tariffs for imports of equipment would be subject to a 50% reduction until 31 December 1997; 
 - goods imported into the five SEZs and into the Pudong Ar ea in Shanghai and the Industrial Development Zone in Suzhou 
would be subject to normal tariffs rates after 1 April 1996.  However tariff refunds would be granted between 1996 and 2000, 
with the volume decreasing annually.  The rates of refund were not  available to the Secretariat.   The refund was due to be 
terminated after 2000.  No information was provided on whether these transitional pe riods are now over and if these tariff 
reductions and exemptions have now been terminated. 
d The State Development Bank, the Export and Import Bank of China, and the Agriculture Development Bank of China. 
Source:  WTO document WT/ACC/CHN/18, 6 June 2000;  and WT/L/432, 23 November 2001, Annex 5B. 
United Arab Emirates - WT/TPR/S/162/Rev.1 
 
P. ix, para. 14  
 Services, mainly transport, have rapidly become a strategic priority.  The objective is to make 
the UAE a major transport hub between Europe and Sout h-East Asia.  Accordingl y, public funds were 
invested in developing port and airport infrastructure, airlines, and shipping companies and 
agencies .  In parallel, tourism, which is targeted as a major source of future growth in the UAE, is S/WPGR/W/25/Add.5 
Page 54  
 
  now among the fastest growing activities.  The financial subsector is also developing rapidly, in part 
through the creation of the Dubai International Financ ial Centre, a financial free zone regulated at the 
Dubai Emirate level.  The telecommunication subsector remains state-controlled, but changes are under way. 
Uruguay - WT/TPR/S/163/Rev.1 
 
P. 78, para. 209, 210 and 212
 
The Investment Law contains a number of gene ral incentives for investment, mainly in the 
form of exemption from certain taxes.  The benefi ciaries are Uruguayan or foreign taxpayers engaged 
in industrial (manufacturing and mining) or agricultural ("promoted") activities.  Business and 
services activities are not eligible for th e incentives, except for those related to tourism , agriculture or 
industrial activities.83 
The fiscal benefits of the Investment Law are available for the purchase of fixed assets, both 
tangible and intangible, and include the following:   (a) exemption from the Wealth Tax (PAT) for 
fixed assets acquired after the entry into force of the Law;  (b) exemption from VAT and the IMESI 
for the import of fixed assets and refund of VAT on their purchase on the market;  and (c) the 
establishment, for the purposes of the IRIC, the IR A and the PAT, of an accelerated depreciation 
scheme for eligible fixed assets.  The incentives are granted for sp ecified periods defined in each 
Resolution.  Exemptions and other benefits only apply when the asset actually becomes part of the 
company's net wealth.  Companies may only receive the benefits if they make profits, so they mainly 
apply to companies that already exist and reinv est their profits (ploughing back savings).  The 
authorities have indicated that, in the case of ne w companies, the first year is not counted in 
calculating the profits, so as to allow them a period of time in which to earn profits.  Exemption from 
the PAT for the full value of the investment is us ually for a period of 3 to 5 years (see below). 
The authorities have indicated that the av erage incentives are around 30 per cent of the 
investment and it is estimated that the revenue  foregone because of PAT exemptions in 2004 was 
around US$10.2 million, while exemptions from the IR IC for reinvesting savings and reserves were 
estimated to amount to US$18 million. 
P. 125, para. 198, 199 and 200  
The tourism  sector is eligible for the general incentives provided in Law No. 16.906 of 
7 January 1998 (Investment Law) (Chapter III(4)(iii)).  In addition, the tourism sector is given special 
incentives contained in the Executive Decree No. 175/ 003 of 7 May 2003 and amendments thereto, to 
be found in Decree No. 350/004 of 29 Septembe r 2004 and Decree No. 262/005 of 5 September 2005.  
Foreign operators are given national treatment as fa r as the incentives are concerned.  The Investment 
Law provides that, in order to declare a tourism activ ity to be a "promoted activity", its contribution to 
the following is taken into account:  the geographical  and tourism development of the infrastructure in 
                                                      
83 Agricultural services projects are deemed eligible if they meet at  least one of the following three 
criteria: they increase the supply of services that are insuff icient or lacking, in quantity or quality;  they enhance 
the competitiveness of the agro-industrial chain;  or they generate national value added, with the emphasis on 
jobs.  Services that are important for industry and are directly related to pr oduction are also eligible.  The only 
business activities eligible are those which form part of a project whose main activity is agriculture or industry, 
are wholesale activities, and are an important addition to  the principal activity.  See; COMAP (Law No. 16.906 
of 7 January 1998), Criterios Básicos Generales en los que se fundamentan las actuaciones de la Comisión a 
efectos de su asesoramiento al Poder Ejecutiv o para los proyectos contemplados en la Ley , in effect since 
10 December 2003.  S/WPGR/W/25/Add.5 
 Page 55 
 
 
  the zone in which the project is to be situated;  fulfilment of specific needs in the tourist facilities 
offered in this zone;  generati ng and attracting tourism demand;  and creating innovative tourist 
services. 
Pursuant to Decree No. 175/003, projects declar ed to be promoted activities pursuant to the 
Investment Law are eligible for the following in  ascending order, according to the progress made in 
carrying out the work and in accord ance with the approved timetable:  (a)  credit for the VAT paid for 
on-the-spot purchases of goods and services to be used in the construction, improvement or expansion, as well as fixed assets to equip or renovate th e construction;  (b) exemption from VAT and 
50 per cent exemption from all other taxes on impor ts of goods for the aforementioned purpose;  
(c) when paying the IRIC, investment in construc tion, improvements or expa nsion may be written off 
over 15 years, while investment in equipment can be  written off over five years;  and (d) exemption 
from the PAT for investment in infrastructure and civil engineering works for construction, 
improvement or expansion at the end of the financ ial year in which the works were initiated and for 
the following 10 years.  Exemption from the PAT is also given for fixed assets to be used for 
equipment at the close of the financial year in  which the assets were incorporated and for the 
following four years. 
In order to be eligible for these incentives,  the potential beneficiaries must request a 
declaration of such status from the Ministry of Tour ism.  In order to obtain this, the company must be 
registered in the Register of Tourism Operators kept by the Ministry of Tourism.  The taxable amount for receiving these incentives, solely for fixed asset s in equipment or its renovation, may not exceed 
99,400 IU (some US$6,200) per room or unit. 
Iceland - WT/TPR/S/164/Rev.1 
 
P. 82, para. 89
 
The Electronic Communications Act provides for all users to be entitled to universal service 
at the same tariff rate throughout the country.  The universal service obligation relates to basic 
telephony , data (128 Kb connection), and some other servic es.  To ensure this obligation is met, the 
PTA may place obligations on electronic communi cations providers and set minimum quality 
requirements.  According to the authorities, mini mum quality requirements have been issued by the 
PTA.  The PTA also holds custody of an equalizati on fund to support universal service operations that 
are either unprofitable or run at a loss.  The fund is  financed by a 0.12% fee levied on the turnover of 
all electronic communications providers.  The authoriti es note that the turnover of the fund has been 
small, and has just provided for the answering of emergency calls.  They also indicate that 
government funding will be targeted at e xpanding GSM and broadband networks into non-
commercially viable areas;  ISK 2.5 billion is to be allocated to this project until 2009. 
P. 90, para. 130  
According to the Icelandic authorities, proce dures and fees are the same for both domestic 
and international airline  companies.  The Government, however, provides support for air transport to 
a number of domestic destinations  that have not proven economically viable.  ISK 90 million was S/WPGR/W/25/Add.5 
Page 56  
 
  granted in 2001;  grants are given to airlines via an open competition.
84  According to the Ministry of 
Transport, ISK 140 million per year will be set aside to support domest ic flights until 2009. 
Separate Customs Territory of Taiwan, Peng hu, Kinmen and Matsu - WT/TPR/S/165/Rev.1 
 
P. 48, para. 81 and 82  
 The first export processing zone (EPZ) in Ch inese Taipei was established in 1966.  Since 
then, the concept of free zones has expanded to  embrace not only manufacturing, but trade, 
warehousing, distribution, ma rketing, and other services .  Ten EPZs hosting about 340 enterprises 
are currently operational, with to tal investment of US$3.9 billion.85  There are also six science-based 
industrial parks (SIPs)86 and five free-trade zones.87 
Imports into free zones are exempt from custom s duty and other taxes.  Commodities shipped 
from the zones to non-bonded areas are subject to domestic import and export regulations.  Businesses 
within free-trade zones are allowed to employ n on-Chinese Taipei persons up to 40% of the total 
number of employees.  Entities operating within the z ones, enjoy equal treatment in terms of duties 
and all taxes, including income taxes. 
P. 51, para. 93 and 94  
Chinese Taipei provides subsidies to selected products and activities in agriculture, fisheries, 
and industry.88  In agriculture, subsidies are provided for the production of rice, sorghum and feed 
corn, sweet potatoes, beans, tob acco leaves, certain vegetables, and sugar.  In fisheries, the 
government implements buy-back programmes for fi shing vessels, subsidies for stopping fishing, 
grants for the use of water-recirculation devices u sed in aquaculture, marine insurance for fishing 
vessels and fishermen, and aqua-cultural facilities loan programmes.  In the industrial sector, the 
government provides subsidized loans for small an d medium-sized enterprises (SMEs), for product 
marketing, and for overseas investment and construction  projects.  The government also provides tax 
incentives and funds for development of "newly-emerg ing, important and strategic" industries and for 
regional development".89  These support schemes are contingent neither on export performance nor 
upon the use of domestic over imported goods.  A ccording to the authorities, domestic and non-
Chinese Taipei enterprises are eligible for these subsidies on an equal basis. 
According to the authorities, subsidies provide d to the above-listed activities, in the period 
2002-04, totalled NT$134.2 billion:  NT$36.7 b illion in 2002, NT$41.3  billion in 2003, and 
NT$56.2 billion in 2004. 
                                                      
84 Ministry of Communications (2003), Transport, Transport Policy Plan 2003-2014.  Available at:  
http://samgonguraduneyti.is/media /S kyrsla/Samgonguaaetlun2003_2014.pdf. 
85 Businesses that can be established in the EP Zs include:  machinery and equipment, medical 
equipment; electronics;  chemicals and biochemicals;  te xtiles and apparel, motor vehicles, food processing, and 
various other manufacturing.  Businesses providing consulting, logistics, shipping, insurance, trading, legal and 
accounting services are also allowed.  Thresholds set for businesses to start the operations in EPZs are 
NT$80 million for warehousing industries and NT$1 million for others.  
86 SIPs are established mainly to encourage the development of industrial technology and to promote 
high-tech industries.  The first SIP was established in 1980. 
87 A free trade zone is an area situated within the cont rolled district of an airport or seaport, or within 
an industrial park, export processing zone, science-based industrial parks, or other areas as approved for the 
purpose of conducting domestic and non-Chinese Taipei bu siness activities.  Five approved free trade zones to 
date are Keelung, Kaohsiung, Taipei, and Taichung free-trade harbours and Taoyuan free-trade airport zone. 
88 WTO document G/SCM/N/123/TPKM, 3 August 2005. 
89 WTO documents G/SCM/N/95/TPKM and /123/TPKM, 8 February 2005 and 3 August 2005.  S/WPGR/W/25/Add.5 
 Page 57 
 
 
  P. 75, para. 153  
The government intends to treat the following services sub-sectors as "emerging industries" as 
defined under the Statute for Upgrading of Industri es and to enable businesses  in these sectors to be 
eligible for investment incentives under the Stat ute for the Development of SMEs:  finance, 
distribution, telecommunication and media, healthcare, training, tourism, cultural and creative 
services, design, information, R&D, environmental protection, and engineeri ng consulting services.  
Chinese Taipei’s main laws regulating servi ces sectors are outlined in Table AIV.1). 
Nicaragua - WT/TPR/S/167/Rev.1 
 
P. 88, para. 121  
 Law No. 306 determines a number of tax and tari ff exemptions.  Unlike the tax exemptions in 
other sectoral laws, this Law affords investors gr eater security of access to the fiscal incentives it 
provides and lays down clearer rules for its administration by the Government, through the establishment of a Committee made up of various g overnment and private-sector institutions.  Once a 
project has been approved, INTUR is responsible for ensuring its implementation in accordance with 
the terms approved by the Committee.  Law No. 306 allows exemption from import duties and taxes 
and VAT for local purchase of building ma terials and fixtures (Article 5.1.1).
90  It also provides for,  
inter alia , exemption from import duties and taxes and/or VAT on local purchase of articles, furniture, 
equipment, boats, automobiles carrying 12 or more passengers, and freight declared by the INTUR to 
be necessary for setting up or operating tourist activities , and on the purchase of equipment that helps 
to save water or energy, as well as equipment needed for the project's security, for a period of 10 years 
as of the date on which INTUR declares that th e company in question has commenced operations 
(Article 5.1.2).  In December 2005, amendments  to Law No. 306 were approved, extending the 
benefits and incentives to small and medium enterpri ses (SMEs) engaged in tourism, and also creating 
a Tourism Development Fund to promote investment in tourism SMEs. 
Bangladesh - WT/TPR/S/168/Rev.1 
 P. 84, para. 193
 
 SOEs exercise a dominant influence in ma ny prominent industries in Bangladesh, for 
example, jute, textiles, steel and chemical/fertilizer production, sugar, and utilities.  Many continue to 
operate at a loss (Table III.§13).  At present,  SOEs losses seem to consume 2% of GDP.91  
Nevertheless, the overall SOE losses have been reduced substantially an d their contribution to 
national output, value addition, em ployment generation, and revenue see ms to have increased.  In 
2003/04, their revenues grew by 8.25% and their value addition by 20.56%.92  In 2004/05, some 20 of 
the largest, non-financial SOEs incurred a net tota l loss of Tk 43 billion;  the largest losses were 
registered by energy- and transport -related SOEs (BPC, BPDB, BBC) while the water company 
BWDB received 68% of the gove rnment subsidy.  Crucial public services, such as power and 
transport, are also still largely inefficient monopo lies, which limits private sector productivity and 
growth. 
 
                                                      
90 Nevertheless, this Article specifies that such ex emption only applies if the articles are not produced 
in Nicaragua or their quantity or quality does not suffice. 
91 The Financial Express , Tuesday 21 February 2006. 
92 Ministry of Finance (2005a). S/WPGR/W/25/Add.5 
Page 58  
 
  Table III.13 
Economic performance of sele cted non-financial SOEs, 2004-05 
(Tk million) 
Name of corporation Net 
profit/lossa Gov't. grants 
& subsidyb Debit service 
liabilities Outstanding bank 
loan (overdue 
loan)c 
Agriculture & fisheries     
Bangladesh Agricultural Development Corporation  -252.9 380.0 0.0 953.5 (921.1) 
Bangladesh Fisheries Development Corporation  16.4 .. 0.5 0.5 (0.5) 
Industry     
Bangladesh Textile Mills Corporatio n  -237.5 .. 0.0 4,719.2 (4,643.7) 
Bangladesh Steel and Engineering Cor poration  97.5 .. 10.0 1,842.2 (795.8) 
Bangladesh Sugar and Food Industries Cor poration  -252.6 .. 25.0 4,761.1 (155.7) 
Bangladesh Chemical Industries Corporation  -1,542.6 .. 1,066.1 4,967.7 (2,844.4) 
Bangladesh Forest Industries Developmen t Corporation  48.6 .. 0.0 0.0 (0.0) 
Bangladesh Jute Mills Corporation  -1,740.3 271.0 0.0 28,439.0 (3,238.6) 
Utility     
Bangladesh Oil, Gas and Minerals Co rporation  3,966.4 .. 2,367.7 0.0 (0.0) 
Bangladesh Power Development Board  -6,146.6 .. 1,250.0 8,821.3 (0.0) 
Dhaka Electric Supply Authority  -1,233.7 .. 450.0 151.7 (0.0) 
Chittagong Water Supply Authority   0.9 .. 37.5 0.0 (0.0) 
Dhaka Water Supply Authority  545.7 .. 135.0 0.0 (0.0) 
Transport & communication     
Bangladesh Shipping Corporation  132.7 .. 0.0 519.8 (519.8) 
Bangladesh Inland Water Transport Corporation  244.0 5.0 103.9 4.4 (1.0) 
Bangladesh Biman Corporation  -3,053.3 .. 0.0 344.4 (0.0) 
Bangladesh Road Transport Corporation  -270.9 .. 0.0 30.8 (10.0) 
Chittagong Port Authority  1,168.7 .. 0.0 0.0 (0.0) 
Chittagong Dock Worker's Management Board   -124.5 .. .. .. 
Mongla Port Authority  -199.8 .. 0.0 0.0 (0.0) 
Mongla Dock Worker's Management Board   -8.0 .. .. .. 
Bangladesh Telecommunication Regul atory Commission  2,579.5 .. .. .. 
Bangladesh Land Port Authority 110.7 .. .. .. 
Jamuna Multipurpose Bridge Authority  1,430.9 .. 513.4 .. 
Commercial     
Bangladesh Petroleum Corporation  -27,726.7 .. 367.9 44,409.0 (0.0) 
Bangladesh Jute Corporation  5.5 .. 0.0 0.0 (0.0) 
Trading Corporation of Bangladesh  -1.5 .. 0.0 0.0 (0.0) 
Construction     
Rajdhani Unnyan Kartipakha  117.9 .. 0.0 .. 
Chittagong Development Authority  233.2 .. 0.0 .. 
Khulna Development Authority  0.6 .. 0.0 .. 
Rajshahi Development Authority  6.0 1.0 0.0 .. 
Service and other sectors     
Bangladesh Small and Cottage Industries Co rporation  -57.7 225.0 5.6 262.5 (251.5) 
Bangladesh Freedom Fighters Welfare Trust  -33.6 164.4 0.0 143.1 (123.3) 
Bangladesh Water Development Board  79.6 3,440.0 0.0 4.2 (4.2) 
Bangladesh Tea Board  -5.8 .. 0.0 50.1 (50.1) 
Bangladesh Parjatan Tourism Corporation  9.6 .. 7.5 0.0 (0.0) 
Bangladesh Film Development Corporation  -2.0 .. 3.0 26.2 (0.6) 
Bangladesh Sericulture Board  .. 40.7 0.0 0.0 (0.0) 
Rural Electrification Board  2,551.9 80.0 1,238.1 0.0 (0.0) 
Civil Aviation Authority  700.0 .. 111.5 ..  S/WPGR/W/25/Add.5 
 Page 59 
 
 
  Name of corporation Net 
profit/lossa Gov't. grants 
& subsidyb Debit service 
liabilities Outstanding bank 
loan (overdue 
loan)c 
Bangladesh Export Processing Zone Authority  292.2 .. 55.8 .. 
Bangladesh Inland Water Transport Authority  -129.1 309.5 33.7 .. 
Bangladesh Handloom Board  .. 46.7 0.0 .. 
Export Promotion Bureau  -1.8 100.0 .. .. 
Total -28,770.9 5,063.3 7,782.8 100,450.7 
(13,559.4) 
.. Not available. 
a Revised. 
b Up to May 2005. 
c Up to 30 June 2005. 
Source : Ministry of Finance (2005), Bangladesh Economic Review 2005, June, Dhaka. 
Kyrgyz Republic - WT/TPR/S/170/Rev.1  
 
P. 71, para. 107  
Insurance  companies benefit from a concessional income tax rate of 5% of total premiums 
received in order to develop the insurance market.   
East African Community - WT/TPR/S/171/Rev.1 
 
P. A2-146, para. 16 and 17 (Tanzania)  
Special duty and tax incentives are granted to lo cal and foreign companies involved in "lead" 
and "priority" activities (Table II.3). Lead activities include: agriculture, agri-based industries, mining, 
petroleum and gas, tourism, and economic infra structure (e.g. road, railway, port facilities, 
telecommunication). Priority activities include: ma nufacturing, natural resources (e.g. fishing and 
forestry), aviation, commercial building, financia l services, transport, broadcasting, human resource 
development, and export-oriented projects. 
 The Investment Act also allows for enhanced incentives for investments that are considered to 
be strategic to the economy.  The additional in centives are at the discret ion of the responsible 
Minister. The Act does not define the term "strategic investment" but, currently, investment in the sugar industry would fall under this provision. 
P. A2-147, table II.3 (Tanzania)
 
Table II.3 
Investment incentives in mainland Tanzan ia to lead and priority sectors, 2006 
  Duty (%) VAT Other (%) 
Lead sectors    
  Agriculture    
    All capital goods 0 Deferred  
    Agricultural machiner y/equipments 0 Exempt  
    Fertilizers and pesticides 0 Exempt  
    Farms implements a nd other inputs 0 Exempt  
    One non-utility administrative vehicle 0 Deferred  
    Corporate tax   30 S/WPGR/W/25/Add.5 
Page 60  
 
      Capital allowance   100 
    Withholding tax on interest on foreign-sourced loan   0 
    Withholding tax on dividends   10 
    Losses carried forward for five years     
  Mininga, petroleum, and gasb    
    All capital goods 0 Relieved  
    Spare parts 0 Relieved  
    Explosive and other supplies 0 Relieved  
    Fuel and oils 0 Relieved  
    Corporate tax   30 
    Capital allowance   100 
    Resident and non-resident wit hholding tax on technical services   3 
  Economic infrastructurec    
    All capital goods 0 Deferred  
    Spare parts 0 Deferred  
    Vehicles 0 Deferred  
    Corporate tax   30 
    Capital allowance   100 
    Withholding tax on dividends   10 
    Withholding tax on interest on foreign-sourced loan   0 
    Losses carried forward for five years    
  Tourism    
    All capital goods 0 Deferred  
    Hotel facilities, e.g. carp ets, furniture, etc. 0 Deferred  
    One non-utility administrative vehicle 0 Deferred  
    Vehicles for tour operators 0 Deferred  
    Corporate tax   30 
    Capital allowance   100 
    Withholding tax on dividends   10 
    Withholding tax on interest on foreign-sourced loan   0 
    Losses carried forward for five years    
Priority sectors    
Capital goods 0 Deferred  
Raw materials 0 20%  
One non-utility administrative vehicle 0 Deferred  
Replacement industrial parts for the rehabilita tion of privatized enterprises 0 Deferred  
Corporate tax   30 
Capital allowance   100 
Withholding tax on dividends   10 
Withholding tax on interest on foreign-sourced loan   0 
Losses carried forward for five years    
a Additional incentives are available under the Mining Act (Chapter IV(3)(i)).  
b See Chapter IV(3)(ii)(b )) for details on incentives available for investments in petroleum and gas activities. 
c Other incentives, as applicable in the mi ning sector, and provision of strategic inve stors status with incentives beyond thos e 
provided to normal investors. 
Source: Information provided by the Tanzanian authorities.  
P. A3-241 and A3-242, para. 60 to 62 (Uganda)  
Licensed investors can enjoy a deferred VAT payment facility on plant and machinery, 
seedlings, greenhouse equipment, plastic sleeves, a nd tea clones.  The facility is granted on a 
consignment-by-consignment basis, as approved by the VAT Commissioner.  In addition, VAT 
exemption is extended to producers of agricultura l products and unprocessed food, and some services 
(e.g. supply of financial , educational , medical , and social welfare services). 
A newly licensed investor (referred to as an "inv estment trader"), investing in Uganda for the 
first time, can claim a refund of VAT paid on a ll purchases (both local and imported) for purposes of 
the licensed project.  This applies to all sectors,  except trade, and for a period of two years from 
establishment.  S/WPGR/W/25/Add.5 
 Page 61 
 
 
   Investment incentives are not available for sever al types of businesses:  wholesale and retail 
commerce, personal services, public relations busin ess, car hire services and operation of taxis, 
bakeries confectioneries and food processing (for th e Uganda market only), postal services, and 
professional services. 
Colombia - WT/TPR/S/172 
P. 123, para. 201  
The Commercial Code allows the Government to grant subsidies to the aviation  industry.93  
The authorities have explained that, as far as th is provision is concerned, the Council of State 
determined that the Government could only  subsidize public air transport companies. 
Hong Kong, China - WT/TPR/S/173 
 
P. 50-51, para. 80  
Effective tax rates on profits tend to be lower th an statutory rates, however, mainly because of 
the tax exemption of dividend income, the absence of capital gains tax, the exclusion from tax of 
offshore income/profits and interest income unde r specified circumstances, as well as generous 
depreciation allowances. For example, compan ies may immediately write off 100% of their 
expenditure on manufacturing plant and machinery and on computer software  and hardware.  
Moreover, certain profits earned from international shipping94, and from airline  services95, and 
interest income from deposits placed locally with a ll authorized banking institutions by corporations 
(except financial institutions) a nd unincorporated businesses are exempt from tax.  No breakdown is 
available on the amount of revenue forgone as a c onsequence of individual tax incentives, such as 
accelerated depreciation. 
P. 95, para. 69  
They indicated that there is no special tax treatment of income from shipping services other 
than an exemption from profit tax for income derive d from international operation of ships registered 
in the Hong Kong Shipping Register (HKSAR flag  ships).  Ownership of  a HKSAR flag ship, 
however, is not limited to an HKSAR company;  any company operating in Hong Kong, China, 
including foreign companies, are eligible.  Income from the international operation of a ship by a non-
resident ship-owner is also exempted if the territo ry in which that ship-owner is resident provides a 
substantially similar exemption to ship-owners resi dent in Hong Kong, China.  Moreover, the income 
derived in HKSAR from the international operation of a ship by an enterprise of a territory that has a 
                                                      
93 Article 1853 of the Commercial Code. 
94 Shipping profits are exempted from tax when they are derived from:  international operations of a 
Hong Kong registered ship;  the international operation of a ship by a non-resident ship-owner from a country 
that provides tax exemption in respect of uplifts by a non-resident ship-owner from Hong Kong, China;  and the international operation of a ship by an enterprise of  a country with which Hong Kong, China has signed an 
agreement for the avoidance of double taxation on/covering shipping income.  The extent of exemption depends 
on the terms of the double taxation agreement (DTA). 
95 Aircraft owners are taxed on a portion of their worldwide profits that is derived from Hong Kong, 
China.  Where there is a DTA covering airline profits , the HKSAR will also tax a resident airline operating 
international traffic on its income derived from an agr eement country if such income  has been granted tax relief 
by that country.  On the other hand, Hong Kong, China will not tax the income of airlines of the agreement 
country derived from the HKSAR. S/WPGR/W/25/Add.5 
Page 62  
 
  double taxation relief arrangement with the HKSAR c overing shipping income is also exempted from 
the profit tax.  The extent of exempti on depends on the terms of the arrangement. 
P. 102, para. 95
 
Hong Kong, China's public healthcare services  are an integral part of the public services 
provided by the Government for residents.  Public  healthcare services are heavily subsidized;  users 
contribute on average only about 5% of the cost.  In terms of service volume, the public healthcare 
sector accounts for about 90% of all inpatient servi ces and 15% of outpatient services provided in the 
Territory.  However, in value terms, public spe nding on healthcare services accounted for no more 
than 60% of total health expenditure.  Rapid advances in medical science and pharmaceutical 
technology mean more expensive treatment and drugs  and lead to even higher public expenditure.  
According to the Hong Kong Population Projections, the proportion of residents aged 65 and over will 
rise from 12% in 2003 to 27% in 2033.  These factors are bound to bring greater pressure on government finances.  The Health, Welfare and Food Bureau is studying alternative arrangements for 
healthcare financing, and plans to launch pub lic consultation on the recommended options.  In 
finalizing an overall package, the HKSAR Governme nt is to consider whether to provide a tax 
deduction for contributions to private medical insurance schemes.   
Japan - WT/TPR/S/175 
 
P. 28, table II.3
 
 
Table II.3  
Measures to promote foreign dire ct investment into Japan, FY 2006  
I. Loan guarantees through the Industrial  Structural Improvement Fund (ISIF)  
  Relaxation of conditions for obtaining certifi cation as a Designated Inward Investor:  a company that has been operating for le ss 
than eight years (currently five y ears) is eligible for certification.  
  Relaxation of conditions for obtaining loan guarantees from ISIF:  currently, in order to obtain loan guarantees, as a rule, IS IF 
requires the backing of a capitalized enterprise and a legal repr esentative of the borrower as a backer of guarantees.  The con dition 
of requiring a guarantee backer is abolished when the backing of a capitalized enterprise can be obtained.  
II. Provision of low-interest financing from the Development Bank of Japan, etc.  
  Expanding eligible projects:  
   limitation that required establishment in one of six industria l high-tech fields has been eliminated.  Projects establishing 
facilities (including land) for lease by foreign companies and fore ign affiliates with one third foreign ownership or more, or any 
company establishing office buildings in which the ma in tenants are non-Japanese businesses are eligible.  
 Creating new loan programmes: 
  loan programme for promoting market entry of foreign-affiliated firms:  in addition to  the capital investment finance, the new  
programme will finance related working capital needs (e.g . rent for facilities, property tax, insurance premium); 
   loan programme for facilitating internati onal cooperation between enterprises:  if the foreign share in the company exceeds on e 
third of total equity as a result of M& A, the company can obtain JDB loans for capital investment afterward.  Corporate 
alliances involving transfer of operations ar e also eligible for this loan programme;  
  loan programme for supporting environment-friendly manageme nt systems:  if the foreign companies pass the bank's 
evaluating process, they can obtain a low-interest loan and the bank guarantees the company's bonds in order to support the 
projects.  
III. Import promotion measures  
  Loan guarantees and exceptional measures provided by the Small Business Credit Insurance for FAZ -related businesses:  businesse s 
undertaking activities to promote distribution of imported cargo ( wholesalers , manufacturers , transporters  or retailers  dealing 
with imported goods) within specified zones for congregation in FAZ area s designated by the local governments of approved FAZ 
areas can make use of following loan guarantees a nd exceptional measures related to credit insurance:  
   loan guarantees through the (ISIF):  loan guarantees are pr ovided by the Industrial Structure Improvement Fund to aid in 
borrowing necessary funds, including operation funds;  
   exceptional measures provided by Small Business Credit Insura nce:  Exceptional measures are provided by Small Business 
Credit Insurance to small and medium-sized companies.   S/WPGR/W/25/Add.5 
 Page 63 
 
 
    Special financing measures for FAZ-related businesses:  with  regard to the DBJ financing programme for import facilities 
enhancement and the low-interest loans pr ovided by the Japan Finance Corporation for Small Busine ss to facilitate import sales,  
import-related businesses within the FAZ areas are able to receive loans with special conditions:  
   DBJ (Financing Programme for Import Facilities Enhancement):  companies are eligible for this programme regardless of the 
share of imported goods among their handling.  Also, manufacturers and others are able  to receive loans not only when they 
invest in Japan for the first time, but  for second and subs equent investments;  
   Japan Finance Corporation for Small Busi ness (Loans to Facilitate Import Sales):  wholesalers or retailers selling imported 
goods through their own offices in the FAZ facilities or contacts with businesses in the FAZ facilities are able to receive up to 
¥400 million.  
IV. Measures for small and medium-sized enterprises  
  Training for administrative managers of fore ign-affiliated firms:  Institute of the Ja pan Small Business Cor poration offers tra ining 
programmes on personnel management and business practices in Japan, etc. for administrative managers etc;  of small and medium-
sized foreign-affiliated firms.  The participants  are subsidized on two thirds of the training fee.  
V. Venture support measures  
  Loan guarantees for loans using collateral of intellectual property rights for venture enterprises:  the ISIF provides loan gua rantees 
for up to 80% (usually 70%) of business funds, and does not requi re a guarantee backer of a capita lized enterprise if the colla teral of 
the loan is intellectual property rights.  
  Investment for venture enterprises:  in a ddition to a company that has been operating or has submitted an application for a pat ent 
less than five years earlier (currently three years), a company that  establishes know-how in five years is able to take investm ents 
from the New Business Investment Company Limited.  
  Introducing a stock option system:  the Government of Japan ex pands the term of exercise fo r the company's executives or 
employees to accept new stock shares of the company at a lower pr ice, from six months to within ten years, based on the resolut ion 
of a general meeting of stockholders.  
Source: Information provided by the Japanese authorities.  
P. 50, para. 74  
Japan has notified various specific subsidy programm es to the WTO.  Its latest notification, in 
July 2005, indicated 92 subsid y schemes to assist industry, finance , agriculture, forestry, and 
fisheries, and transport  sectors.96  Energy and mining, agriculture, research, and small and medium-
sized enterprises (SMEs) have accounted for the majo rity of the subsidies notified by Japan since 
1998. 
P. 79, para. 56  
In order to mitigate the a decrease in the num ber of Japanese-flag carriers, the Government 
provides support for Japanese-flag carriers (the so-called International Ship Regime).  The 
Government has been providing such support meas ures, including tax breaks in respect of ship 
registration tax and local property tax, to incr ease the competitiveness of Japanese vessels vis-à-vis 
those of other countries that provide preferential tax treatment for their registered ships ;  in the tax 
reform of FY 2006, the preferential registration ta x rate under the International Ship Regime was 
raised to 2.5% from 2.0% previously (compa red with 4.0% charged to ordinary vessels).97  According 
to the authorities, no exclusive rights or subsidi es are given to Japanese flag-carriers;  there are no 
discriminatory measures preventing foreign partic ipation in the supply of auxiliary services. 
Argentina - WT/TPR/S/176 
 
P. 127, para. 130  
The banks  can receive financial assistance from the BCRA for temporary illiquidity, if, 
among other requirements, the liquidity ratio of the requesting entity is less than 25 per cent.  
                                                      
96 WTO document G/SCM/N/123/JPN, 7 July 2005. 
97 The property tax on ships subject to the International Ship Regime equals two fifths of the tax 
charged to ordinary vessels. S/WPGR/W/25/Add.5 
Page 64  
 
  Assistance is offered for a period of 90 days, which can be renewed for periods of the same length.  
Law No. 25.780, O.J. of 8 September 2003, stipulates th at the BCRA is authorized to exclude certain 
assets and liabilities from a bank's restructuring process.  This Law also provides that when a financial 
entity goes into liquidation, priority should be give n to the refunding of the deposits made by natural 
and/or legal persons up to the amount of Arg$50,000 , followed by larger deposits and by liabilities 
originating in commercial facilities granted to the entity  that directly affect international trade.  Bank 
deposits are protected by the Deposit Guarantee F und, in accordance with Law No. 24.485, O.J. of 
18 April 1995.  The Fund is administered by Seguro de Depósitos S.A.  (SEDESA), a limited company 
created by Decree PEN No. 540/95.  The Fund covers  several types of deposits in pesos and foreign 
currency up to Arg$30,000 per depos itor and entity.  The Fund dealt with 27 cases between October 
1996 and November 2005 (16 since 1999), disbursing a total of Arg$2,135.4 million.  On 30 June 
2006, the available balance in the Fund amount ed to Arg$1,440.3 million (some US$480 million).
98 
European Communities - WT/TPR/S/177 
 
P. 71, para. 101 and 102  
 
 In 2005, the latest year for which data are available, there were around 764 registered cases 
relating to state aid;  84 of these were initiated by  the Commission.  There were 21 cases found to be 
incompatible with the internal market princi ples.  In 2004, around €62 billion were granted 
throughout the EC in state aid (excluding aid to railways), representing about 0.6% of EC GDP.99  In 
2004, state aid (excluding aid to railways) varied widely between Member St ates, from 0.4% of GDP 
or less in Belgium, the Czech Republic, Estonia, Greece, Latvia, Luxemburg, the Netherlands and the 
United Kingdom, to 1.5% or more in Cyprus, Malta, Poland, and Finland (Table III.13).  In terms of 
state aid granted (excluding aid to agriculture, fisheri es, and transport), Estonia, Lithuania, and Latvia 
accounted for the lowest levels (0.09%, 0.13% a nd 0.16% of GDP respectively), and Malta, Cyprus, 
and Poland for the highest (2.71%. 1.06% and 1.01 %).  Germany granted the highest amount of aid 
(€17 billion), followed by France (€9 billion) and Ital y (€7 billion).  Sector-wise, around 65% of state 
aid was channelled to manufacturing activities a nd various service subsectors, some 24% to 
agriculture and fisheries, 9% to coal, and 2% to transport  (Table III.13).  There are wide differences 
in sectoral allocation of state-aid across Member States.  For example, in Estonia and Lithuania 24% and 16% of their state-aid was granted to manufacturing (respectively), and 76% and 81% to agriculture; in Italy and the United Kingdom sectoral allocation was almost exactly the opposite. 
 
Table III.13 
State aid in the EC, 2004 
Country Total aid as % of national 
GDP % of total aid by sectora Total aid  
 Excluding 
railways Excluding 
agriculture, 
fisheries and 
transport M S A F C T OM (€ million)  
Austria  0.61 0.22 32 4 63 0 0 0 0 1.427 
Belgium  0.34 0.24 65 4 26 0 0 2 2 972 
Cyprus  1.48 1.06 35 24 29 0 0 0 12 184 
Czech Rep.  0.41 0.19 37 5 47 6 4 0 0 352 
Denmark  0.71 0.52 71 2 20 1 0 6 0 1.375 
Estonia  0.39 0.09 24 0 76 0 0 0 0 35 
Finland 1.66 0.38 22 1 74 0 0 3 0 2.483 
France  0.54 0.39 54 7 26 1 10 2 0 8.915 
Germany  0.78 0.69 66 4 12 0 18 0 0 17.236 
Greece  0.29 0.20 66 3 28 2 0 0 1 473 
                                                      
98 See http://www.sedesa. com.ar/saldo_fgd.php. 
99 COM (2005) 624 final of 9 December 2005,  State Aid Scoreboard  – Autumn 2005 update .  S/WPGR/W/25/Add.5 
 Page 65 
 
 
  Country Total aid as % of national 
GDP % of total aid by sectora Total aid  
 Excluding 
railways Excluding 
agriculture, 
fisheries and 
transport M S A F C T OM (€ million)  
Hungary  1.26 0.87 63 1 31 0 5 0 0 1.015 
Ireland  0.65 0.27 33 8 58 0 0 0 0 951 
Italy  0.52 0.40 72 5 16 2 0 6 0 7.037 
Latvia  0.39 0.16 25 15 60 0 0 0 0 44 
Lithuania  0.68 0.13 16 0 81 1 0 0 3 122 
Luxemburg 0.31 0.17 48 8 45 0 0 0 0 78 
Malta  3.10 2.71 87 0 13 0 0 0 0 134 
Netherlands  0.39 0.18 47 0 45 0 0 8 0 1.813 
Poland  1.47 1.01 51 0 31 0 17 0 1 2.873 
Portugal  1.09 0.83 13 61 24 1 0 0 2 1.475 
Slovenia  0.96 0.53 46 1 45 0 6 0 2 250 
Slovakia  0.64 0.63 98 0 2 0 0 0 0 212 
Sweden 0.99 0.80 75 4 12 0 0 7 2 2.745 
United Kingdom 0.32 0.25 71 0 18 2 1 2 6 5.442 
           
EC-25 0.60 0.44 59 5 23 1 9 2 1 61.617 
EC-15 0.57 0.43 59 5 22 1 9 2 1 56.410 
10 new M.S. 1.09 0.70 53 2 33 0 11 0 1 5.207 
a M:  manufacturing;   S:  services (including tourism, finan ce, media and cultural services); A:   agriculture;  F:  fisheries;   C: coal; 
T:  transport, excluding railways;  and OM:  other non-manufacturing. 
Note: Due to rounding of figures, the percentages of total aid by sector do not generally add up to 100. 
Source : COM (2005) 624 final,  State Aid Scoreboard ;  and calculations by the WTO Secretariat. 
In 2004, around half of EC Member States awarded more than 90% of their state aid for 
non-sector specific objectives.  Excluding allocations to agriculture, fisheries and transport, around 
76% of EC state aid (€34.6 billion) was aimed at horizontal objectives (an increase of 7% over the 
2000-02 period).  The four main objectives were envir onment and energy savings (25% of total aid), 
regional economic development (18%), research and development (12%) and medium and small 
enterprises (12%).  During 2002-04, grants were the ma in instrument of state aid to the manufacturing 
and services sectors (47.9% of total state aid), foll owed by tax exemptions (32.4%);  guarantees 
accounted for 10.3%, soft loans repr esented 5%, tax deferrals 3.1%, a nd equity participation 1.3%.  
More than 800 measures were covered by block exemp tions relating to state aid to medium and small 
enterprises, employment, and training.   
Australia - WT/TPR/S/178 
 P. 55, para. 78
 
The EMDG scheme is administered by Austra de and aims to promote exports by SMEs.100  In 
2004/05, the scheme distributed grants worth $A 123.9 million to 3,277 ex porters, among which 77% 
were small business with annual incomes of $A 5 mi llion or less.  Under the scheme, the Government 
reimburses up to 50% of specified export promotion expenditures above a threshold of $A 15,000.  
The criteria to obtain grants include:  having an annual income of not more than $A 30 million;  
spending at least $A 15,000 on eligible export pr omotion during the financial year before the 
application;  and being the owner of the product or  service being promoted (some exceptions apply).  
                                                      
100 Austrade online news on 24 January 2006.  Vi ewed at:  http://www.aus trade.gov.au/corporate/ 
layout/0,,0_S1-1_CORPXID0054-2_-3_PWB110745194-4_-5_-6_-7_,00.html [4 May 2006]. S/WPGR/W/25/Add.5 
Page 66  
 
  A local-content requirement was removed in J une 2006 as a result of a review (see below).
101  The 
EMDG also applies to services , and intellectual property or know-how that resulted mainly from 
work in Australia, but excludes legal, migr ation, and real estate purchasing services.  
P. 62, para. 101 and 102  
Since its previous Review, Australia has c ontinued to provide assistance to domestic 
producers, not just in the form of tariff conces sions and other tax incenti ves (sections (2)(ii)(e) 
and (3)(iv)), but also grants and concessional loans.   
Of the $A 4.6 billion in total budgetary assi stance provided in 2004/05, budgetary outlays 
amounted to almost three fifths;  the rest involved tax expenditures.  Support has focused largely on R&D (42% in 2004/05).
102  Budgetary assistance varies marked ly between sectors;  the largest 
proportion is directed to the manufacturing sector.  Services accounted for 30% of total budgetary 
assistance in 2004/05;  of the total assistance to services, property and business services , finance 
and insurance , and cultural and recreational services  accounted for 21%, 16%, and 14%, 
respectively.103  
P. 89, para. 71  
The estimated level of support provided to th e services sector through direct financial 
assistance, tax expenditures, and funding to public-sector institutions has been increasing 
(Table AIV.3);  budgetary outlays aimed at enc ouraging investment, R&D, and exports have been 
allocated mainly to property and business services,  finance and insurance, cultural and recreational 
services, and communication services, accounting for 21%, 16%, 14.3%, and 10.7% of total 
budgetary assistance, respectively. 
P. 127, table AIV.3  
Table AIV.3 
Developments in selected domestic support to services, 2002-05 
($A million) 
 Typea 2002/03 2003/04 2004/05b 
Electricity, gas & water supply     
Industry-specific measures     
Renewable Energy Commercialization  DFA 9.2 9.2 1.7 
Renewable Energy Equity Fund  DFA 2.6 1.0 0.5 
General investment measures     
Infrastructure Bonds Scheme TE 10.4 10.4 10.4 
                                                      
101 Previously, for a firm to obtain grants under the EMDG scheme, the goods it intended to export 
needed to be made in Australia with at least 50% Australian content;  or, if the goods were made outside 
Australia, at least 75% of the value of the components used in the making of the goods had to be attributable to goods that met the 50% Australian content rule.  Goods that did not meet these requirements could also be 
eligible if Austrade determined that the Australian input in those goods was sufficient to ensure that Australia 
derived a significant net benefit from their export.  
102 Industry-specific assistance accoun ted for 27% of total support and export promotion for 14%.  In 
May 2004, a new assistance package was announced for R&D and related activities, the Backing Australia's 
Ability (BAA) – Building our Future through Science and Innovation Scheme.  It is estimated that the new scheme will cost $A 5.3 billion, which, together with the BAA plan announced in 2001, committed total funding 
of $A 8.3 billion up to 2011.  The package covers assi stance for R&D, its commercialization, and related skills 
development.  "Commercialization" here refers to the development of new commercial products, processes, and 
services resulting from the application of R&D activities (Productivity Commission, 2004). 
103 Productivity Commission (2006e), Table A.4.  S/WPGR/W/25/Add.5 
 Page 67 
 
 
   Typea 2002/03 2003/04 2004/05b 
Infrastructure borrowing tax offset scheme TE 7.7 7.2 2.9 
General R&D measures     
Cooperative Research Centres FI 8.6 7.0 6.7 
R&D Start  DFA 5.9 3.2 1.5 
R&D tax concession TE 4.0 4.9 5.2 
Other measures     
Greenhouse gas abatement programme DFA 1.8 7.5 6.7 
Total  56.3 52.6 38.0 
Construction     
General R&D measures     
Cooperative Research Centres FI 2.0 2.5 2.5 
CSIRO research FI 22.7 12.8 14.9 
R&D tax concession TE 8.4 10.3 10.8 
R&D Tax offset for small companies DFA 2.2 3.2 4.0 
Other measures     
Small business capital gains tax exemption TE 4.4 4.9 7.3 
Total  45.9 39.6 42.7 
Wholesale trade     
General export measures     
Export Market Development Grants Scheme DFA 12.6 12.4 10.2 
TRADEX TE 1.0 0.9 4.8 
General R&D measures     
Premium R&D Concession TE 3.8 6.3 5.9 
R&D tax concession TE 24.6 30.1 31.4 
R&D Tax offset for small companies DFA 5.1 7.2 9.0 
Other measures     
Small business capital gains tax exemption TE 10.6 12.1 17.7 
Total  59.0 71.3 79.9 
Retail trade     
General R&D measures     
R&D tax concession TE 4.7 5.8 6.1 
R&D Tax offset for small companies DFA 3.1 4.4 5.5 
Other measures     
Small business capital gains tax exemption TE 19.0 21.5 31.7 
Total  30.1 35.1 47.2 
Accommodation, cafes & restaurants     
General export measures     
Export Market Development Grants Scheme DFA 8.0 7.5 4.7 
Total  11.9 11.5 10.7 
Transport & storage     
General export measures     
Export Market Development Grants Scheme DFA 8.6 7.6 5.4 
TRADEX TE 3.2 2.7 1.1 
General investment measures     
Infrastructure Bonds Scheme TE 9.6 9.6 9.6 
Infrastructure borrowing's tax offset scheme TE 7.3 11.6 8.4 
General R&D measures     
R&D tax concession TE 3.3 4.1 4.3 
Total  44.7 38.7 33.0 
Communication services     
General R&D measures     S/WPGR/W/25/Add.5 
Page 68  
 
   Typea 2002/03 2003/04 2004/05b 
Cooperative Research Centres FI 5.8 5.8 5.7 
CSIRO research FI 21.5 57.2 62.2 
ICT Centre of excellence FI 10.3 11.3 17.2 
Innovation Investment Fund DFA 6.8 2.3 2.0 
Premium R&D Concession TE 2.5 4.1 3.9 
R&D Start  DFA 4.6 8.4 10.9 
R&D tax concession TE 15.4 18.8 19.7 
R&D Tax offset for small companies DFA 2.5 3.5 4.4 
Other measures     
Small business capital gains tax exemption TE 6.1 7.0 10.2 
Total  94.3 124.7 140.3 
Finance & insurance     
General investment measures     
Infrastructure borrowing tax offset scheme TE 5.0 6.3 3.8 
Offshore Banking Unit tax concession TE 45.0 50.0 75.0 
General R&D measures     
Premium R&D Concession TE 5.8 9.5 9.0 
R&D Start  DFA 1.2 3.5 2.4 
R&D tax concession TE 39.4 48.1 50.3 
R&D Tax offset for small companies DFA 2.3 3.3 4.1 
Other measures     
Pooled development funds TE 6.0 6.0 7.0 
Small business capital gains tax exemption TE 14.7 16.6 24.5 
Venture capital limited partnerships TE - 20.0 25.0 
Total  120.7 164.6 209.8 
Property & business services     
General export measures     
Export Market Development Grants Scheme DFA 27.1 27.6 24.9 
TRADEX TE 3.6 2.9 0.6 
General R&D measures     
Biotechnology Innovation Fund DFA 3.7 4.7 3.6 
COMET programme DFA 3.7 2.9 2.3 
Cooperative Research Centres FI 5.6 10.9 13.3 
Innovation Investment Fund DFA 3.3 2.1 4.8 
Premium R&D Concession TE 9.1 14.9 14.1 
R&D Start  DFA 20.9 24.6 30.6 
R&D tax concession TE 57.1 69.7 72.9 
R&D Tax offset for small companies DFA 55.7 79.2 98.4 
Total  191.7 239.6 274.3 
Education     
General export measures     
Export Market Development Grants Scheme DFA 7.8 8.0 6.6 
General R&D measures     
R&D tax concession TE 1.8 2.2 2.3 
R&D Tax offset for small companies DFA 1.1 1.5 1.9 
Other measures     
Small business capital gains tax exemption TE 5.9 6.7 9.9 
Total  17.3 19.4 21.7 
Health & community services      S/WPGR/W/25/Add.5 
 Page 69 
 
 
   Typea 2002/03 2003/04 2004/05b 
General R&D measures     
Biotechnology Innovation Fund DFA 3.2 3.1 2.8 
Cooperative Research Centres FI 7.2 13.6 15.1 
Innovation Investment Fund DFA - 5.8 3.9 
Preseed fund FI - 2.5 0.5 
R&D Start  DFA 10.6 9.3 11.2 
R&D Tax offset for small companies DFA 1.7 2.4 3.0 
Total  26.9 40.0 41.6 
Cultural & recreational services     
Industry-specific measures     
Australian Film Commission DFA 20.5 22.5 48.6 
Australian Film Finance Corporation DFA 57.5 60.5 65.6 
Exemption of film tax offset payments TE 1.0 3.0 15.0 
Refundable tax off set for large scale film productionc TE 5.0 35.0 35.0 
General export measures     
Export Market Development Grants Scheme DFA 11.3 12.2 11.3 
General R&D measures     
Cooperative Research Centres FI 2.4 4.1 4.7 
Total  102.9 142.6 187.0 
Government administration & defence  2.6 2.0 3.1 
Personal and other services  2.9 3.4 4.6 
Unallocated services     
Industry-specific measures     
Building IT Strengths DFA 24.8 18.2 20.6 
General export measures     
Australian Tourist Commission/Tourism Australiad FI 99.9 97.9 138.4 
Total  141.7 120.6 174.2 
Total outlays  556.5 622.7 750.8 
Total tax expenditures  392.5 482.8 557.2 
Total budgetary assist ance  949.0 1105.5 1308.0 
- Nil.  Figures may not add to total due to rounding. 
a DFA:  direct financial assistance;  FI:  f unding to institutions;  TE:  tax expenditures. 
b Estimates are derived primarily from Australian Government budget papers, depa rtmental annual reports and Treasury's 
2005 TES. 
c Estimate for 2004/05 based on the previous year's funding.  d Funding for the Australian Tourist Commission (ATC) was previous ly allocated across services industries based on internationa l 
visitor expenditure data, while other tourism assistance measures  were allocated to 'unallocated  other'.  For the 2004/05 Revie w, 
funding for the ATC/Tourism Australia together with other touris m-related assistance has been allo cated to 'unallocated service s'.  
The Commission intends to revise its treatment of t ourism assistance in the context of 2005/06 Review. 
Source:  Productivity Commission (2006e), Table A4.  
P. 95, para. 94  
The universal service regime consists of the uni versal service obligation (USO) and the digital 
data service obligation (DDSO).  Telstra Corporation Ltd (Telstra) is the universal service provider, 
although any other service provider can be so designated.104  Telstra receives a USO and DDSO 
subsidy, which is determined by the Communications  Minister on the advice of ACMA.  The subsidy 
                                                      
104 Telstra is required by the USO to provide standard telephone services, public payphones and 
prescribed carriage services to all residents of Australia on  an equitable basis, wherever  they reside or carry on 
business.  The DDSO requires Telstra to provide "reasonable and equitable"  access to a digital data service with 
a data speed broadly equivalent to 64 kbps upon request.   The ACMA approves and regulates how Telstra fulfils its USO and DSSO obligations, and decides wh ether Telstra provides "reasonable and equitable" access 
to other service providers.   S/WPGR/W/25/Add.5 
Page 70  
 
  is funded by a levy on all carriers, including Telstra, in proportion to their eligible 
telecommunications  revenue.
105   
Canada - WT/TPR/S/179 
 
P. 66, para. 193  
As reported by the authorities, the main focus of the Government of Canada's efforts to 
stimulate economic activity and the competitiv eness of the Canadian economy is through tax 
measures and through supporting innovation, particul arly given relatively weak levels of private 
sector research and development.  Canada mainta ins a number of assistance programmes that include:  
tax incentives;  assistance targeted  at research and development;  support for regional development;  
repayable and non-repayable financial contributions;  as well as sector-specific programmes in 
shipbuilding, textiles (Chapter IV(4)), defence, fisheries, and energy .  Other programmes support 
cultural priorities related to promoting language, literature, film, TV , new media, and music.  Various 
programmes are also operated by provincial governme nts, and some are cost-shared with the Federal 
Government.  This section focuses on non-agri-f ood sectors (for agri-food, see Chapter IV(2)). 
P. 70, para. 209  
Most provinces offer tax incentives to businesses that may take the form of tax credits, tax 
exemptions or tax holidays, in areas such as the film and TV industry , to generate employment or 
stimulate investment, manufacturing capacity, minera l exploration or to assist SMEs.  In addition a 
number of provinces and territories (e.g. Alberta,  Manitoba, New Brunswick, Nunavut, Yukon) offer 
fuel tax exemptions or rebates for certain commerc ial activities (Table AIII.5).  Most provinces also 
provide funding for resear ch and development.106 
P. 166-167, table AIII.5  
 
Table AIII.5 
Main provincial and territor ial tax credit programmes, 2006 
Province Provincial and territorial tax credit programmes 
Newfoundland and Labrador Non- Refundable Measures Deductible from Basic Tax:  Political Contribution Tax Credit; 
Direct Equity Tax Credit 
Refundable Measures:  Research and Developm ent Tax Credit;  Film and Video Industry Tax 
Credit 
Tax Holidays:  Economic Diversification and Growth Enterprises Tax Holiday;  New Small 
Business Tax Holiday 
Prince Edward Island Non-Refundable Measures Deductible from Basic Tax:  Political Contributions Tax Credit;  
Manufacturing and Processing Investment Tax Credit 
Refundable Measures:  Innovati on and Development Tax Credit;  Enriched Investment Tax 
Credit 
Tax Holidays:  Aviation -Related Business Tax Holiday 
Nova Scotia Non-Refundable Measur es Deductible from Basic Tax:  Political Contributions Tax Credit 
Refundable Measures:  Research and Deve lopment Tax Credit; Film Industry Tax Credit 
Tax Holidays:  New Small Business Tax Holiday 
New Brunswick Non-Refundable Measur es Deductible from Basic Tax:  Political Contributions Tax Credit 
Refundable Measures:  Research and Devel opment Tax Credit;  New Brunswick Film Tax 
Credit 
Manitoba Non-Refundable Measures Deductible from  Basic Tax:  Research and Development Tax 
Credit; Manufacturing Investment Tax Credit;  Odour Control Tax Credit 
Refundable Measures:  Film and Video Produc tion Tax Credit;  Co-ope rative Education Tax 
Credit; Odour Control Tax Credit – Agricultural Corporations 
Saskatchewan Non-Refundable Measures Deductible from  Basic Tax:  Royalty Tax Rebate; Research and 
                                                      
105 Productivity Commission (2006a).  In 2004/05, USO costs were set at $A 211 million, although 
Telstra considered this to be less than its actual costs. 
106 Industry Canada online information.  Viewed at:  http://strategis.ic.gc.ca/epic/internet/inrti-rti.nsf/ 
en/h_te02391e.html.  S/WPGR/W/25/Add.5 
 Page 71 
 
 
  Province Provincial and territorial tax credit programmes 
Development Tax Credit; Political  Contributions Tax Credit 
Refundable Measures:  Film Employment Tax Credit;  Manufacturing and Processing 
Investment Tax Credit 
British Colombia Political Contributions Tax Credit;  Loggi ng Tax Credit;  Small Business Venture Capital Tax 
Credit;  International Financial Activity Tax Refund 
Refundable Measures:  Film and Television  Credit;  Production Services Tax Credit;  Mineral 
Exploration Tax Credit;  Scientific Research a nd Experimental Developm ent Tax Credit;  Book 
Publishing Tax Credit;  Digital Anim ation or Visual Effects Tax Credit 
Yukon Non-Refundable Measures De ductible from Basic Tax:  Political Contribution Tax Credit 
Refundable Measures:  Mineral Exploration Tax Credit;  Research and Development Tax 
Credit 
Northwest Territories Non-Refundable M easures Deductible from Basic Tax:  Political Contributions Tax Credit;  
Risk Capital Investment Tax Credit 
Nunavut Non-Refundable M easures Deductible from Basic Tax:  Political Contributions Tax Credit;  
Risk Capital Investment Tax Credit 
Quebec Non-Refundable Measures Deductible from Basic Tax:  Logging Tax Credit; Tax Credit for 
Hiring Employees Specializing in Financial Derivatives 
Refundable Measures:  Research and Developmen t Tax Credit; Taxi Driver Tax Credit;  Forest 
Producers Real Estate Tax Refund; Film a nd Television Production Tax Credit, Design Tax 
Credit; On-the-job Training Tax Credit; Shipbu ilders Tax Credit; Production of Multimedia 
Titles Tax Credit;  Tip Reporting Tax Credit;  Film Dubbing Tax Credit;  Film Production 
Services Tax Credit;  Computer Animation and Special Effects Tax Credit; Technological 
Adaptation Services Tax Credit; Production of Sound Recordings Tax Credit;  Valée de 
l'aluminium Tax Credit; Gaspésie-Îles-de-la-Mad eleine and Certain Maritime Regions Tax 
Credit;  Book Publishing Tax Credit;  Tax Cr edit for Processing Activities in Resource 
Regions;  Biotechnology Development Centres Tax Credits;  Resources Tax Credit; Tax Credit 
for Major Employment-generating Projects;  Pr oduction of Ethanol Tax Credit; Tax Credit for 
Construction of Public Access Roads and Bridges in Forest Areas;  Tax Credit for the 
Acquisition of Pig Manure Treatment Facilities 
Tax Holidays:  International Financial Centres  Tax Holiday, Small and Medium-Size 
Manufacturing Enterprises in Remote Resource Regions Tax Holiday;  Tax Holiday for the 
Development of Stock Exchanges and Security  Clearing-House Corporations in Montréal 
Deductions To Arrive at Taxable Income:  Ré seau d'investissement social du Quebec Tax 
Deduction, Tax Relief for Employee Transit Passes 
Ontario Non-Refundable Measures Deductible from Basic Tax:  Small Business Tax Credit for Credit 
Unions 
Refundable Measures:  Qualifying Environm ental Trust Tax Credit; Innovation Tax Credit; 
Film and Television Tax Credit;  Co-operative Education Tax Credit;  Business Research 
Institute Tax Credit;  Book publishing Tax Cred it;  Computer Animation and Special Effects 
Tax Credit;  Production Services Tax Credit;  In teractive Digital Media Tax Credit;  Sound 
Recording Tax Credit;  Appren ticeship Training Tax Credit 
Deductions to Arrive at Taxable Income: Politic al Contributions Deduction;  Current Cost 
Adjustment for Pollution Control Equi pment;  New Technology Tax Deduction 
Alberta Non-Refundable Measures Deductible from Basic Tax:  Royalty Tax Deduction;  Political 
Contributions Tax Credit 
Source: Finance Canada 
 
__________