WORLD TRADE  
ORGANIZATION   
G/SCM/N/220/EEC/Add.3 
16 November 2011 
 (11-5215) 
Committee on Subsidies and 
Countervailing Measures Original:   English 
 
 
 
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 
 
EUROPEAN UNION 
 
Addendum 
   The following addendum to the notification of  the European Union relates to subsidy 
programmes of Bulgaria . 
 
_______________ 
 
 G/SCM/N/220/EEC/Add.3 
Page 2  
 
  BULGARIA 
 
TABLE OF CONTENTS 
 
Page 
 
 
I.  SUPPORT THROUGH NATIONAL INNOVATION FUND .............................................. 3  
1.  Scheme for support of innovative undertakings through the National Innovation 
Fund .......................................................................................................................... ................. 3  
2.    Scheme "Financial assistance for training for acquisition of professional 
qualification" ................................................................................................................ ............. 4  
II.   ASSISTANCE TO ECONOMIC DEVELOPMENT AND STRUCTURAL 
AJUSTMENT ..................................................................................................................... ....... 5 
1.   Support to regional development ............................................................................................ 5  
2.   Support to environmental protection ...................................................................................... 6  
III.  OPERATIONAL PROGRAMME "DEVELOPMENT OF THE 
COMPETITIVENESS OF THE BULG ARIAN ECONOMY 2007-2013" .......................... 8  
IV.  OPERATIONAL PROGRAMME "HUMAN RESOURCES DEVELOPMENT 
2007-2013" .................................................................................................................... ........... 10  
  G/SCM/N/220/EEC/Add.3 
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  I. SUPPORT THROUGH NATIONAL INNOVATION FUND 
1. Scheme for support of innovative undertakings through the National Innovation Fund  
 
1.  Period covered by the notification 
 
 2009;  2010.  
 2.  Policy objective and/or purpose of the subsidy  
  3.1.  Scheme, applicable in the pe riod May 2005 - December 2009 for supporting the 
research and development activities of the enterp rises working in collaboration with research 
organizations;  
  3.2.  Scheme on support of SMEs' part icipation to international fairs;  
 
3.  Background and authority for the subsidy (incl.  identification of the legislation under which it 
is granted) 
 
 In 2009  – background for the schemes on p. 3.1. and 3.2.: 
  - Law on the State Budget for 2009, promulgated in the State Gazette No. 110/30.12.2008, 
with amendments;  
 - Council of Ministers' Decree No. 27 of 09.02.2009 on the 2009 State Budget 
Implementation;  
 - Small and Medium Sized Enterprises Act, SG No. 84/1999 (art. 14 and art. 15); with 
amendments; 
 - Investment Promotion Act, SG No . 37/2004, amended and supplemented; 
 - Regulations for application of the Invest ment Promotion Act, adopted by Council of 
Ministers Decree No. 221/2007, SG No. 76/2007; amended and supplemented; 
 - Council of Ministers' Decision No. 723 of  08.09.2004 for adoption of Innovation strategy 
of the R. Bulgaria and measures for its realisation; 
 - Council of Ministers' Decree No. 15 of 31.01.2005 for providing funds from 2005 State 
Budget to the Ministry of Economy for establishing the National Investment Fund (NIF); 
 - NIF Management Rules and Guidance on application for funding of innovative 
enterprises, approved by the Orders No . RD-16-82/2005, RD- 16-464/2005 and RD-16-
1402/2006, issued by the Minister of Economy; 
 - Council of Ministers' Decision of 2009 for approval of yearly program within the 
National strategy for encouragement of SMEs  development, followed by the program's 
approval by the Minister of Economy and Energy  for SMEs participation in international 
fairs; 
 - Orders No. RD-20/2005 and No. RD-12-0-10/ 2007 for the application rules for funding 
(issued by the SMEs Promotion Agency Execu tive Director) of SMEs' participation in 
international fairs; 
 
 In 2010  - background for the schemes on p. 3.1.: 
 
 - Law on the State Budget for 2010 promulgated in the State Gazette No. 99 of 
15.12.2009, with amendments;  
 - Council of Ministers' Decree No. 324 of 30.12.2009 on the 2010 State Budget 
implementation,   SG No. 3/ 12.01.2010, with amendments;  
 - Small and Medium Sized Enterprises Act, SG No. 84/1999 (art. 14 and art. 15); with 
amendments; G/SCM/N/220/EEC/Add.3 
Page 4  
 
   - Council of Ministers' Decision No. 723 of  08.09.2004 for adoption of Innovation strategy 
of the R. Bulgaria and measures for its realisation; 
- Council of Ministers' Decree No. 15 of 31.01.2005 for providing funds from 2005 State 
Budget to the Ministry of Economy for establishing the National Investment Fund (NIF); 
- NIF Management Rules and Guidance on application for funding of innovative 
enterprises, approved by the Orders No . RD-16-82/2005, RD- 16-464/2005 and RD-16-
1402/2006, issued by the Minister of Economy. 
 
Authority responsible for the subsidy: Small a nd Medium Enterprises Promotion Agency at the 
Ministry of Economy and Energy (Ministry of Economy, Energy and Tourism after 27.07.2009). 
 
4. Form of the subsidy  
  Grant.  
5.  To whom and how the subsidy is provided 
 
 - to innovative enterprises from all sectors a nd regions, research institutes, organizations 
and universities for support of research activities;  
 -  to small and medium sized enterprises from different economy's sectors for participation 
in international fairs and exhibitions in 2009.  
 
6.  Subsidy per unit or in case where it is not possible, the total amount or the annual budgeted 
for that subsidy 
 
  - in 2009:  
 under point 3.1. – payments effectuated at  the amount of BGN 6.67 mln. to 142 
research and development projects, appr oved during the NIF's sessions in 2009;  
 
 under point 3.2. - BGN 1.42 mln. for support of the participation of 186 SMEs to 
international fairs.       
  - in 2010:  
 under point 3.1. – based on the contracts signed in 2009, payments effectuated in 
2010 at the amount of BGN 4.34 mln. to 87 research and development projects; 
 under point 3.2. – no actionable subsidies.       
7.   Duration of a subsidy and/or any other time limits attached to it   
 
 2009; 2010   8.   Statistical data permitting an assessment of the trade effects of the subsidy  
 
 Information on the trade effects of  the subsidy is not available. 
 
2.   Scheme "Financial assistance for training for acquisition of professional qualification" 
1.  Period covered by the notification 
 
 2010 
  G/SCM/N/220/EEC/Add.3 
 Page 5 
 
 
  2.  Policy objective and/or purpose of the subsidy 
 
 Carried out of a specific training in order to receive the professional qualification.  3.  Background and authority for the subsidy (incl.  identification of the legislation under which it 
is granted) 
 
 - Investment Promotion Act, SG No . 37/2004, amended and supplemented; 
 - Regulations for application of the Invest ment Promotion Act, adopted by Council of 
Ministers Decree No. 221/2007, SG No. 76/2007; amended and supplemented; 
 - Council of Ministers Decision No. 828/2010 for application of investment promotion 
measures according to the procedure establis hed by the Investment Promotion Act. 
 4.   Form of the subsidy 
 
Grant. 
 
5.   To whom and how the subsidy is provided 
  To companies from all sectors, eligible for receiving assistance for training in the 
municipalities with an unemployment higher than the medium one for the R. Bulgaria during the year 
preceding the award an "class A" investment certificate.  
 6.   Subsidy per unit or in case where it is not possible, the total amount or the annual budgeted   
for that subsidy 
 
 In 2010 – granted BGN 1.64 million. 
 7.   Duration of a subsidy and/or any other time limits attached to it   
 
 2010 – 31.12.2013.  
8.   Statistical data permitting an assessment of the trade effects of the subsidy 
 
It is considered that the trade effects ar e minimal in view of the amount granted. 
 
II.  ASSISTANCE TO ECONOMIC DEVELOPMENT AND STRUCTURAL 
ADJUSTMENT 
 
1.  Support to regional development 
1.  Title of the subsidy programme 
 
Scheme for tax relief constituting regional aid,  subject to fulfilment of the conditions under 
Art. 189 of the Corporate Income Tax Act (CITA) 
 
2.  Period covered by the notification  
 
2009; 2010.   
 
3.  Policy objective and/or purpose of the subsidy 
 
 Regional aid for initial investment and jobs creation linked to the investment.  G/SCM/N/220/EEC/Add.3 
Page 6  
 
  4.  Background and authority for the subsidy (incl.  identification of the legislation under which it 
is granted) 
 
 Art. 189 of the Corporate Income Tax Act - taxa ble persons must fulfil specified conditions in 
order to receive a regional aid, connected with th e initial investment in municipalities where the rate 
of unemployment for the year of retention is by 35 % or higher than the national average for the same 
period.   
Authority responsible for the subsidy: National Revenue Agency at the Ministry of Finance. 
 
5.  Form of the subsidy 
 
 Tax relief.   
6.  To whom and how the subsidy is provided 
 
Any taxable person who has fulfille d specified conditions in the art. 189 of CITA can retain 
corporation tax and must invest it in material and immaterial assets as a part of an initial investment within 5 years after the beginning of the year fo r which the tax was retained. The initial investment 
must be made in municipalities where the rate of une mployment for the year of retention is by 35% or 
higher than the national average for the same period; the activity related to the initial investment must 
continue to be implemented in the respective municipality for at least 5 years after the year of 
completion of the initial investment  (this circumst ance shall be declared annually by the annual tax 
returns until the lapse of the five-year period); at least  25% of the value of the material and immaterial 
assets forming part of the initial investment must be self-financed or debt-financed by the taxable person; etc. 
 
7.  Subsidy per unit or in case where it is not possible, the total amount or the annual budgeted 
for that subsidy 
 
  In 2009 - BGN 3.69 million.  
 In 2010 - information not available by the time fixed for presentation of the 2010 WTO 
notification (due to the technological time for pr ocessing of all 2010 submitted tax declarations). 
 
8.  Duration of a subsidy and/or any other time limits attached to it  
 
     In 2009; in 2010 – information is not available. 
 9.   Statistical data permitting an assessment of the trade effects of the subsidy  
 
It can be assumed that the trade effects are minimal. 
 
2.  Support to environmental protection 
1.  Title of the subsidy  
 
     Scheme for tax reduction for biofuels    
 2.  Period covered by the notification 
 
     2010     G/SCM/N/220/EEC/Add.3 
 Page 7 
 
 
  3.  Policy objective and/or purpose of the subsidy  
 
 The reduced excise duty  for biofuels blends containing 4-5% biofuels is an effective way to 
preserve the environment, to stimulate using the bi ofuels in order to decrease the country's energy 
independence, to achieve a sustainable developmen t of rural regions, supplementary income and new 
employment in the agricultural sector.   
 4.  Background and authority for the subsidy (incl.  identification of the legislation under which it 
is granted) 
 
 - Excise Duties and Tax Warehouses Act, promulgated State Gazette (SG) 
No. 91/15.11.2005, amended and supplemented; 
 - Renewable and Alternative Energy S ources and Biofuels Act, promulgated SG 
No. 49/19.06.2007, amended and supplemented;  
 - Clean Ambient Air Act, promulgated in SG No. 45/28.05.1996, corrected, amended and 
supplemented; 
 - Ordinance for requirements of liquid o ils' quality, conditions, order and manner of 
control, SG No. 69/2005, accepted with the Council of Ministers' Decree No. 
156/15.07.2003, promulgated and supplemented; 
 - National long-term program 2008-2020 for en couragement the consumption of biofuels 
in transport sector, accepted with the Counc il of Ministers' Decision of 15.11.2007; 
 - Community guidelines on state aid for environmental protection, OJ C 82/01.04.2008. 
 - Authorities responsible for the subsidy: Council of Ministers; Ministry of Finance.  5.  Form of the subsidy  
 
     Tax reductions for biofuels. 
 6.  To whom and how the subsidy is provided 
  To all producers and importers of biofuels s upplied to the market for transport purposes, to 
traders, to consumers. 
 
7.  Subsidy per unit, or in case where it is not possible, the total amount or the annual budgeted 
for that subsidy 
   In 2010 – tax relief was at the amount of BGN 2.01 million. 
 
8.   Duration of a subsidy and/or any other time limits attached to it   
 
  23.11.2009 – 23.11.2011.  9.   Statistical data permitting an assessment of the trade effects of the subsidy  
  It can be assumed that the trade effect is minimal.  G/SCM/N/220/EEC/Add.3 
Page 8  
 
  III.  OPERATIONAL PROGRAMME "DEVELOPMENT OF THE COMPETITIVENESS 
OF THE BULGARIAN ECONOMY 2007-2013" 
 
1.  Title of the subsidy programme 
  Priority axis 2 "Increasing efficiency of  enterprises and promoting supportive business 
environment" , schemes - "Technological modernization of enterprises" (case XS299/2007), "Upgrade 
of technologies in small and medium-sized enterp rises" (case X74/2008); "Upgrade of technologies in 
large enterprises" (case X 73/2008), "Support for implementation in the production of innovative 
products and services" (case X 75/2008) . 
 
2.  Period covered by the notification  
 
 2009;  2010.  
 
3.   Policy objective and/or purpose of the subsidy 
 
 Primary objective - upgrade of technologies in enterprises; secondary objective – support of small and medium sized enterprises.   4.  Background and authority for the subsidy (incl.  identification of the legislation under which it 
is granted) 
 
   -  EC legislation:   Council Regulations (EC) No. 1080/2006 , No. 1081/2006, No. 1082/2006; Council 
Regulation (EC) No. 1083/2006 (with amendmen ts); Council Regulation (EC) No. 1084/2006; 
Commission Regulation (EC) No. 1828/2006; Commission Regulation (EC) No. 800/2008; Commission Regulation (EC) No. 846/2009; 
  -  Bulgarian legislation:  
 Law on the State Budget for 2009, State Gazette No. 110/30.12.2008, with amendments; 
Council of Ministers' Decree No. 27 of 09.02.20 09 on the 2009 State Budget Implementation; Law on 
the State Budget for 2010, SG No. 99/15.12.2009, with amendments; Council of Ministers' Decree No. 324 of 30.12.2009 on the 2010 State Budget implementation, SG No. 3/12.01.2010, with amendments; Council of Ministers' Decision No. 312/2002 on adoption of strategy for the 
participation of Bulgaria in the EU Structural Funds and the Cohesion Fund; Council of Ministers' 
Decree No. 55/12.03.2007 on conditions and contract award procedure conducted by beneficiaries of 
agreed grant from the EU Structural Funds a nd from the PHARE Programme of the EU, with 
amendments; Council of Ministers' Decision No. 62/21.03.2007 on the adoption of national rules on 
eligibility of  expenditure under the Operational pr ogrammes co-financed by the EU Structural Funds 
and the Cohesion Fund in relation to the 2007-2013 Financial Framework, with amendments; Council 
of Ministers' Decree No. 121/2007 on determin ing the procedure on grant awarding under the 
Operational Programmes, cofinanced from the Struct ural Funds and the Cohesion Fund of the EU and 
under the PHARE Programme of the European Union,  SG No. 45 of 2007, with amendments; Council 
of Ministers' Ordinance No. 18/04.02.2003 on establishing a Council for the co-ordination of combating against irregularities, concerning the fina ncial interests of the EU, SG 13/11.02.2003, with 
amendments; Council of Ministers' Ordinance on de termination of procedures for administrating of 
irregularities concerning funds and programs co -financed  from the EU, (SG 97/2009, with 
amendments); Council of Ministers' Decree No. 202/2009 on establishing a coordination mechanisms 
of EU management funds;  Small and Medium-Sized Enterprises Act (SG 84/1999, with amendments); 
Regional Development Act (SG No. 14/20.02.2004, w ith amendments); State Aid Act (State Gazette  G/SCM/N/220/EEC/Add.3 
 Page 9 
 
 
  No. 86/24.10.2006) and Rules for the application of the SAA (published in the SG 59/0707.2004, 
amended and supplemented by SG No. 10/06.02.2009); Ordinance No. 6 of the Minister of Finance  
concerning the procedures for monitoring and ensuri ng transparency of state aids (SG 77/2002); 
Decision No. 9/04 of the Council of Ministers of R.  Bulgaria for approving Bulgarian regional state 
aid map 2007-2013; Public Procurement Act (pub lished in the SG No. 28/06.04.2004, with 
amendments); Public Financial Inspection Act (S G 92/10.11.2000, with amendments); Law on the 
Bulgarian National Audit Office, adopted  December 2001, with amendments;  
 
5.   Form of the subsidy  
 
 Grant.   
6.    To whom and how the subsidy is provided 
  Through the Program's Contracting Authority and Intermediate Body (Small and Medium 
Enterprises Promotion Agency  at the Ministry of Economy and Energy) to beneficiaries (selected 
after fulfillment of rules and procedure prev iewed under the Operational program) from the 
manufacturing industry and activities related to the nanotechnology; 85% co-financing from the 
European Regional Development Fund (EFRD) and 15% co-financing from the state budget of the 
R. Bulgaria.  
 
7.  Subsidy per unit, or in case where it is not possible, the total amount or the annual budgeted 
for that subsidy 
 
 In 2009:  
 
 -  under case XS 299/2007 – payments made within 8 contracts at the amount of 
BGN 1.42 mln. (BGN 1.21 mln. from EFRD and BGN 0.21 million from BG co-financing); 
  -  under cases X 73/2008; X 74/2008; X 75/2008 th e contracts have been concluded at the 
amount of BGN 219.61 (BGN 188.73 mln. from EFRD and BGN 30.88 million from BG 
co-financing) / no payments have been effectuated. 
  In 2010:   
 -  under case XS 299/2007 – payments made w ithin 31 contracts at the amount of BGN 
8.15 million (BGN 6.93 million from EFR D and BGN 1.22 million from BG co-
financing); 
  -  under case X 73/2008 - payments made within 9 contracts at the amount of BGN 3.57 
million (BGN 3.03 million from EFRD and BGN 0.54 million from BG co-financing); 
 
 -  under case X 74/2008 - payments made within 4 contracts at the amount of BGN 2.07 
million (BGN 1.76 mln. from EFRD and BGN 0.31 million from BG co-financing); 
   -  under case X 75/2008 – no payments made. 
 
8.  Duration of a subsidy and/or an y other time limits attached to it 
 
 The terms are specified in th e Guidance for application for granting financial aid under the 
Priority axis 2 "Increasing efficiency of the enterprises and promoting supportive business 
environment", primary objective "Upgrade of technologies in enterprises".  G/SCM/N/220/EEC/Add.3 
Page 10  
 
   
9.   Statistical data permitting an assessment of the trade effects of the subsidy 
  It is considered that the trade effects are minimal in view of the purpose of the subsidy. 
 IV.  OPERATIONAL PROGRAMME "HUMAN RESOURCES DEVELOPMENT  2007-
2013" 
 
1.  Title of the subsidy 
  Scheme "Priority axis 2 - Raising the productiv ity and adaptability of the employed persons", 
Qualified services and training to employees-phase 2;  scheme "Priority axis 1 -Development". 
 
2.  Period covered by the notification  
 
 2009;  2010  
 
3.   Policy objective and/or purpose of the subsidy 
 
 -  for the case X 272/2009 - raising the labour  productivity and crea tion of conditions of 
sustainable employment; improving the adapta bility of employed persons with focus on 
improving the employability, adaptability and employees' skills, prolonging their 
working life and adapting to the knowledge-based economy; 
  -  for the case X 311/2010 – training for acquisition or increasing the professional 
qualification of dismissed persons after 01.11.2 008 in result of restructuring/closing of 
the enterprise, decreasing of work volume or  partial closing of the manufacture, with 
view of their consequent inclusion in employment.   
 4.  Background and authority for the subsidy (incl.  identification of the legislation under which it 
is granted) 
 
   -  EC legislation: 
  Council Regulation No. 1083/2006; Council Re gulations No. 1080/2006, No. 1081/2006, No. 
1082/2006 of the European Parliament; Council Regulation (EC) No. 1084/2006; Commission Regulation (EC) No. 1828/2006; Commission Regulation (EC) No. 800/2008; 
 
 -  Bulgarian legislation:  
 Law on the State Budget for 2009, SG No. 110/30.12.2008,   with amendments; Council of Ministers' Decree No. 27 of 09.02.2009 on the 2009 State Budget Implementation; Law on the State Budget for 2010, SG No. 99/15.12.2009, with ame ndments; Council of Ministers' Decree No. 324 of 
30.12.2009 on the 2010 State Budget implementa tion, SG No. 3/12.01.2010, with amendments; 
Council of Ministers' Decision No. 312/2002 on adoption of strategy for the participation of Bulgaria 
in the EU Structural Funds and the Cohesion Fund; Council of Ministers' Decision No. 62 of 21.03.2007 on the adoption of national rules on e ligibility of  expenditure under the Operational 
programmes co-financed by the EU Structural Funds and the Cohesion Fund in relation to the 
2007-2013 Financial Framework; Small and Medium-Sized Enterprises Act (SG 84/1999, with 
amendments); State Aid Act (SG No. 86/24.10.20 06) and Rules for the application of the SAA 
(SG 59/2004, amended and supplemented by SG No. 10/06.02.2009); Ordinance No. N16 of the 
minister of finance concerning the procedures for m onitoring and ensuring tran sparency of state aids 
(SG 77/2002); Decision No. 9/2004 of the Council of Ministers of R. Bulgaria for approving of the  G/SCM/N/220/EEC/Add.3 
 Page 11 
 
 
  Bulgarian regional state aid map 2007-2013; Public Procurement Act (SG No. 28/06.04.2004, with 
amendments); Public Financial Inspection Act (S G 92/10.11.2000, with amendments); Law on the 
Bulgarian National Audit Office, adopted in December 2001, with amendments.  5.   Form of the subsidy  
 
 Grant.   
6.    To whom and how the subsidy is provided 
 
 Through the Intermediate Body (Employment Ag ency at the Ministry of Labour and Social 
Policy) to all enterprises for acquisition of  professional qualification, competences and re-
qualification of employed persons ; 85% co-financing from the European Social Fund (ESF) and 15% 
co-financing from the state budget of the R. Bulgaria.   
7.  Subsidy per unit, or in case where it is not possible, the total amount or the annual budgeted 
for that subsidy 
 
 In 2009 – contracts concluded at the amount  of BGN 1.53 million [BGN 1.30 million from 
ESF and BGN 0.23 million (from BG co-financing)], no payments made; 
 
 In 2010: 
  - under case X 272/2009  (based on the contracts concluded in 2009) the payments made at 
the amount of BGN 0.22 million (BGN 0.18 million from the ESF and BGN 0.032 BG co-financing); 
 
 -  under case X 311/2010 – contract concluded at the amount of BGN 250.00 million (BGN 
213 million from the ESF and BGN 37.00 million BG co-financing), payments made – BGN 45.01 million (BGN 38.26 million from the ESF and BGN 6.75 million BG co-financing). 
 
8.    Duration of a subsidy and/or a ny other time limits attached to it 
 
 Duration of the scheme X 272/2009 – from 26. 01.2009 till 31.03.2011; duration of the 
scheme X 311/2010 – from 30.12.2009 till 31.12.2012. Terms were specified in the Guidance for 
application of projects for granting financial aid based on the open competitive selection procedure 
under the abovementioned schemes.  
 9.   Statistical data permitting an assessment of the trade effects of the subsidy 
  It is considered that the trade effects are minimal in view of the purpose of the subsidy.  
 
__________