WORLD TRADE  
ORGANIZATION   
G/SCM/N/220/GTM 
G/SCM/N/226/GTM 
5 July 2011 
 (11-3302) 
Committee on Subsidies and 
Countervailing Measures Original:   Spanish 
 
 
 
SUBSIDIES 
 
New and Full Notification Pursuant to Article XVI:1 
of the GATT 1994 and Article 25 of the Agreement 
on Subsidies and Countervailing Measures 
 
Continuation of Extension under SCM Article 27.4 of the Transition Period for the 
Elimination of Export Subsidies Pursuant to the Procedures Contained in the 
General Council Decision in Document WT/L/691 
 
GUATEMALA 
   The following notification, dated 30 June 2011, is being circulated at the request of the 
delegation of Guatemala. 
 
_______________ 
 
  Pursuant to Article XVI:1 of the General Agreement on Tariffs and Trade (GATT) 1994 and 
Articles 25 and 27.4 of the Agreement on Subsidies and Countervailing Measures ("the 
SCM Agreement") and in accordance with the pro cedures laid down in the General Council Decision 
in document WT/L/691 of 31 July 2007 ("the Decision" ), Guatemala hereby submits this notification 
for the period 1 July 2010 to 30 June 2011.   Guatemala did not increase the favourabilit y of the notified programmes in the 
above-mentioned period. 
  Furthermore, with regard to the notified programmes, Guatemala hereby advises the Committee on Subsidies and Countervailing M easures ("the Committee") of the following: 
 
 Pursuant to paragraph 1(f) of the Decision,  on 30 June 2010 Guatemala notified its action 
plan for the elimination of the export subsidies contained in the three programmes which come under 
Article 27.4 of the SCM Agreement.   In this action plan, under the heading "Descrip tion of future action", Guatemala established a 
work programme which sets out the tasks (together with the related estimated time-frames) to be 
undertaken with a view to conducting the work requi red to eliminate the export subsidies before the 
expiry of the transition period established in the Decision;  i.e. by 31 December 2015.  G/SCM/N/220/GTM 
G/SCM/N/226/GTM Page 2 
 
 
   At the time of this notification and pur suant to the work programme, Guatemala has 
embarked upon and is currently tackling the first th ree such tasks, in relation to which it wishes to 
report the following:  
(a) Analysis by the working group of the Ministry of the Economy ("the Working Group") of the 
amendments required to national legislation 
 The Working Group, which is headed by the Vice-Minister of the Economy, has been 
meeting regularly since 1 July 2010.  Over the last two months, the dynamics of this Group 
have been such that it has been holding at leas t one technical level mee ting per week, as well 
as a weekly meeting with the authorities of the Ministry of the Economy to receive guidelines 
and discuss the status of the work.  The results of this work are being set out in a draft report, which seeks to outline the Working Group reco mmendations which will form the basis for 
future action, including the preparation of necessary draft legislation. 
 
(b) Recruitment of a subsidies expert 
 In November 2010, the Ministry of the Economy commenced the recruitment process for a 
subsidies expert responsible fo r reviewing and validating the work of the Working Group;  
holding talks with other public sector instituti ons, chambers of commerce, trade associations 
and users of the special regimes, inter alia ;  and developing a proposal establishing alternative 
incentives consistent with commitments under th e WTO.  In March 2011, the Working Group 
drew up and approved a mandate for this expert  and, in April, the Vice-Minister of the 
Economy began a search for sources of funding for the appointment.  The selection of prospective candidates fitting the mandate prof ile got underway in April and two potentially 
suitable candidates have been identified to date.  It is hoped that a subsidies expert will be 
appointed in the second half of 2011, once the Ministry of the Economy's internal 
administrative procedures have been completed. 
 (c) Discussion and validation by the Inter-Institutional Group of the work of both the Ministry of 
the Economy and the subsidies expert 
 Although the work programme envisages the i nvolvement of the Inter-Institutional Group 
once work has reached a more a dvanced stage, the authorities of the Ministry of the Economy 
considered it appropriate for the Inter-Institu tional Group to become involved earlier on and 
to hold regular meetings with the Working Group.  The Working Group and the Inter-Institutional Group have therefore been mee ting at least twice a month since early 2011.  
The two groups will be advised by the subsidies expert following his/her appointment.  This 
expert will advise both parties on the drafting of  the recommendations referred to in the work 
programme, rather than being r esponsible merely for reviewing and validating the work of the 
Working Group, which would then be s ubmitted to the Inter-Institutional Group for 
discussion and validation.  The consensus recomme ndations are expected to be ready by the 
end of the first half of 2012 at the latest. 
  As can be seen, Guatemala is actively involved in the first three tasks in its work programme, 
which reflects its strong commitment to eliminating the export subsidies before the expiry of the 
transition period.  Guatemala remains at the disposal of WTO Members to clarify or expand on the information contained in this notification.  G/SCM/N/220/GTM 
 G/SCM/N/226/GTM 
 Page 3 
 
 
   
TABLE OF CONTENTS 
 
 
 Page 
 I. Exemption from company tax;  exemption from customs duties and other import taxes, 
including value-added tax (VAT), on impor ts of machinery, equipment, parts, 
components and accessories required for the production process of companies under 
special customs regimes ……………………………............................................................ 3 
 II. Exemption from company tax;  exemption from customs duties and other import taxes, 
including value-added tax (VAT), on impor ts of machinery, equipment, parts, 
components and accessories required for the production process relating to activities of 
managers and users of Free Zones ………………………………………………………… 4 
 III. Exemption from company tax;  exemption from customs duties and other import taxes, 
including value-added tax (VAT), on impor ts of machinery, equipment, parts, 
components and accessories required for the production process of commercial and industrial enterprises operating in the Indus trial and Trade Free Zone (ZOLIC) …………. 6 
 
I. PROGRAMME 
1. Description 
 
(a) Exemption from company tax on income from the export of goods produced or assembled in 
Guatemala and exported under special customs regimes to non-Central American countries. 
 (b) Exemption from customs duties and other import taxes, including value-added tax (VAT), on 
imports of machinery, equipment, parts, components and accessories required for the production process. 
 2. Period of notification 
 
 1 July 2010 to 30 June 2011.  
3. Objective 
 
 To promote, encourage and develop the produc tion in the national customs territory of goods 
for export outside the national territory.  
4. Background and authority 
  Background: 
 
 The Government of Guatemala considers th at appropriate conditions for encouraging 
investment of national and foreign capital need to  be promoted in order to reduce the high poverty 
levels stemming, inter alia , from the internal armed conflict, as well as to raise employment levels 
and improve the distribution of income. 
 G/SCM/N/220/GTM 
G/SCM/N/226/GTM Page 4 
 
 
   Authority: 
 
 Legislative Decree No. 29-89 of 23 May 1989 and amendments thereto. 
 5. Form of the subsidy 
 
 The subsidy takes the form of a tax exemption, but its effect is greatly reduced given the other 
national taxes payable.  6. To whom and how the subsidy is provided 
 
 The subsidy is granted to companies by way of an exemption from company tax on income from the export of goods produced or assembled in  Guatemala and exported under special customs 
regimes outside national customs territory. 
 
 To be eligible for the programme, companies must be recognized by the Ministry of the 
Economy.  
7. Subsidy per unit or, in cases where this is  not possible, the total or annual amount 
budgeted for this subsidy 
 
 Subsidies are granted in accordance with the ex porters' income;  they cannot therefore be 
quantified given that they vary each fiscal year.  
8. Duration of the subsidy and/or any other time-limit which could affect it, including the 
date of inception/commencement 
 
 This subsidy programme is applicable for up to ten years.  
9. Statistical data 
  No such statistical information is available. 
 
II. PROGRAMME 
1. Description 
(a) Exemption from company tax on income exclusively from the activities of managers and 
users of the Free Zone. 
 (b) Exemption from customs duties and other import taxes, including value-added tax (VAT), on 
imports of machinery, equipment, parts, components and accessories required for the production process. 
 2. Period of notification 
 
 1 July 2010 to 30 June 2011.   G/SCM/N/220/GTM 
 G/SCM/N/226/GTM 
 Page 5 
 
 
  3. Objective 
 
 To promote and regulate the establishment in  Guatemala of Free Zones, the activities of 
which, in particular measures to boost foreign tr ade, create employment and stimulate technology 
transfer, serve to encourage national development. 
 
4. Background and authority 
 
 Background: 
  In an endeavour to encourage the development of regions which have been marginalized as a 
result of the internal armed conflict and to re duce poverty levels, a Free Zone system has been 
established as an instrument to create employme nt, attract investment and encourage technology 
transfer. 
 
Authority: 
 
Legislative Decree No. 65-89 of 14 November 1989. 
 
5. Form of the subsidy 
 
 The subsidy takes the form of a tax exemption.  
6. To whom and how the subsidy is provided 
  The beneficiaries of this incentive are the managers and users of Free Zones. 
  To be eligible for these fiscal benefits, compan ies must be fully authorized by the Ministry of 
the Economy.  
7. Subsidy per unit or, in cases where this is  not possible, the total or annual amount 
budgeted for this subsidy 
 
 Subsidies are granted in accordance with the ex porters' income;  they cannot therefore be 
quantified given that they vary each fiscal year.  8. Duration of the subsidy and/or any other time-limit which could affect it, including the 
date of inception/commencement 
 
 This subsidy programme is applicable for up to ten years.  
9. Statistical data 
 
 No such statistical information is available. G/SCM/N/220/GTM 
G/SCM/N/226/GTM Page 6 
 
 
  III. PROGRAMME 
1. Description 
 
(a) The Industrial and Trade Free Zone (ZOLIC) operates in a non-customs area located within 
the perimeter established in the regulatory plan of the Santo Tomás de Castilla Port in the 
Department of Izabal, and in non-customs areas which can be fitted out  for its public special 
economic development areas, which may be lo cated in any part of national territory. 
 (b) Users which are established and operate in the ZOLIC enjoy exemption from the following:  
(i) 100 per cent of company tax for ten years, cal culated as of the date on which the enterprise 
starts up operations in the ZOLIC;  (ii) valu e-added tax, customs duties and other charges 
applicable to imports entering the ZOLIC;  (iii) value-added tax on taxable actions and 
procedures carried out in the ZOLIC;  and (i v) stamp tax on documents containing deeds or 
contracts relating to goods or business in the ZOLIC. 
 
(c) Users are also exempt from the payment of import duties, value-added tax, taxes and other 
fiscal charges levied in relation to the entry into  and stay in the ZOLIC of all goods and other 
articles or negotiable instruments, raw materi als, inputs, materials, semi-processed goods, 
intermediate goods, packaging and containers, as  well as machinery, equipment, spare parts, 
accessories and other goods intended for industr ial or commercial production activities or the 
provision of services. 
 
2. Period of notification 
 
 1 July 2010 to 30 June 2011. 
 
3. Objective 
 
 To promote industrial and commercial developm ent in Guatemala in order to create further 
sources of employment.  4. Background and authority 
 
Background: 
 
Measure to encourage investment as a mechanism for promoting development. 
 
Authority: 
  Decree No. 22-73 of the Congress of the Republic  of Guatemala of 21 March 1973 and the 
amendment thereto introduced by Decree No. 30-20 08 of the Congress of the Republic of Guatemala, 
in effect as of 1 July 2008. 
 
5. Form of the subsidy 
 
 The subsidy takes the form of a tax exemption.  6. To whom and how the subsidy is provided 
 
 The beneficiaries of these incentives are comme rcial and/or industrial enterprises operating 
under this special regime.  G/SCM/N/220/GTM 
 G/SCM/N/226/GTM 
 Page 7 
 
 
   
7. Subsidy per unit or, in cases where this is  not possible, the total or annual amount 
budgeted for this subsidy 
  Subsidies are granted in accordance with the bene ficiaries' income;  they cannot therefore be 
quantified given that they vary each fiscal year.  
8. Duration of the subsidy and/or any other time-limit which could affect it, including the 
date of inception/commencement 
 
 Exemption from company tax is applicable fo r up to ten years.  ZOLIC operations, however, 
are unlimited in duration.  
9. Statistical data 
 
 No such statistical information is available.  
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