WORLD TRADE  
ORGANIZATION   
G/SCM/N/220/TPKM/Rev.1 
18 August 2011 
 (11-4123) 
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 
 
THE SEPARATE CUSTOMS TERRITORY OF TAIWAN,  
PENGHU, KINMEN AND MATSU 
 
Revision 
 
 
 The following notification, dated 16 August 2011, is being circulated at the request of the Delegation of the Separate Customs Territo ry of Taiwan, Penghu, Kinmen and Matsu. 
 
 
_______________ 
 
 
TABLE OF CONTENTS 
  Page 
I.  AGRICULTURE ................................................................................................................... .... 2 
A.  SUPPORT FOR RICE  ....................................................................................................................... 2  
B.  SUPPORT FOR SORGHUM AND FEED CORN  ................................................................................... 3  
C.  SUPPORT FOR DIVERSIFIED CROPS  ............................................................................................... 4  
D.  SUPPORT FOR TOBACCO LEA VES  .................................................................................................. 6  
E.  SUPPORT FOR SUGAR  ................................................................................................................... 7  
F.  INTEREST SUBSIDY  ...................................................................................................................... 8  
II.  FISHERIES ..................................................................................................................... .......... 9 
A.  FISHING VESSELS BUY -BACK PROGRAMME  ................................................................................. 9  
B.  REWARD FOR CLOSING FISHERY SEASON  .................................................................................. 12  
C.  FISHING VESSELS MARINE INSURANCE REWARD  ....................................................................... 12  
III. INDUSTRY ...................................................................................................................... ........ 13 
A.  LOANS - LOANS FOR SMALL AND MEDIUM -SIZED ENTERPRISES (SMES ) .................................... 13  
1.  Specific and urgent financing and loans intended for recovery plans from 
damage caused by disasters ....................................................................................................  13 G/SCM/N/220/TPKM/Rev.1 
Page 2 
 
 
  2.  Medium- and long-term loans for pro duct marketing and loans for overseas 
investment and construction projects ................................................................................... 15  
B.  LOANS FOR PRIVATE ENTERPRISES  ............................................................................................ 16  
1.  Loans for small and medium-sized ent erprises and private enterprises ........................... 16  
C.  DUTY AND TAX EXEMPTIONS GRANTED TO  ENTERPRISES LOCATED WITHIN A 
DESIGNATED ZONE  .................................................................................................................... 18  
1.  Duty and tax exemptions for high-technology industries .................................................... 18  
2.  Duty and tax exemptions for in-zone enterprises ................................................................. 20  
D.  SUBSIDIES FOR THE ESTABLISHMENT AND OPERATION COSTS OF PETROLEUM 
FACILITIES , AND PRODUCTS CONSUMPTION COSTS IN THE MOUNTAIN AREAS AND 
OFFSHORE ISLAND AREAS  ......................................................................................................... 21  
IV.  RESEARCH AND DEVELOPMENT .................................................................................. 23  
A.  FUNDS GRANTED FOR DEVELOPMENT OF NEW LEADING INDUSTRIES  ....................................... 23  
B.  FUNDS GRANTED FOR PROMOTING DEVELOPMENT OF INDUSTRIAL TECHNOLOGY  ................... 25  
C.  FUND GRANTED FOR ENCOURAGING EXPLORATION AND DEVELOPMENT OF OIL AND 
NATURAL GAS RESERVES  .......................................................................................................... 26  
 
 I. AGRICULTURE 
A. 
SUPPORT FOR RICE  
1. Title of the programme 
 
 Support for rice.   
2. Period covered by the notification 
  2007-2009. 
 3. Policy objective and/or purpose 
  The policy objectives are to en sure the security of the food supply by balancing supply and 
demand for rice, and to stabilize rice prices for the maintenance of farmers' income. 
 
4. Background and responsible authorities 
 
(a) Law and regulation:   Agriculture Development Act. 
    Food Administration Act. 
 
(b) Responsible authority: Council of Agriculture. 
5. Form of the subsidy/to whom and how the subsidy is provided 
 
 There are three types of rice purchase - planned purchase, supplementary purchase and 
additional purchase.  The planned purchase is made  at guaranteed prices which are determined by 
taking into account production costs.  The prices have been set at NT$23 per kilogram for Japonica- G/SCM/N/220/TPKM/Rev.1 
 Page 3 
 
 
  type rice and NT$22 for Indica-type rice.  The qua ntity of the planned purchase has been limited 
to 1,920kg per hectare for the first crop and 1,440kg for the second crop respectively.  Supplementary 
purchases have been made to supplement shortag es on the planned purchase quantity.  Supplementary 
rice purchase prices are set at NT$20 per kilogram for Japonica-type rice and NT$19 for Indica-type 
rice respectively.  The quantity of the supplementa ry purchase has been limited to 1,200kg per hectare 
for the first crop and 800kg for the second crop resp ectively.  An additional purchase was made from 
the second crop in 2003.  The prices for additional purchase are set at NT$18.6 per kilogram for 
Japonica-type rice and NT$17.6 for Indica-type rice.  The quantity of the additional purchase has been 
limited to 3,000kg per hectare for the first cr op and 2,360kg per hectare for the second crop 
respectively. 
  Planned, supplementary and additional rice purchases are made only for the farmers who 
produce rice in paddy fields and follow the irrigational rotation scheme for planting and not planting.  
For those who produce rice in the upland areas or pr oduce in the paddy fields but do not follow the 
government scheduling for planting, are only eligib le for supplementary and additional purchases.  
Farmers are free to decide whether they want  to sell products to the Government or not. 
 6. Amount of the subsidy 
  NT$563 million, NT$452 million and NT$382 millio n for 2007, 2008 and 2009 respectively. 
 
7. Duration of the subsidy and/or any other time-limits attached to it 
 
 The duration of the subsidy is not specified. 
 
8. Statistical data 
Unit:  1,000 MT. 
Item Year Production Consumption Import Export 
Rice 2007 1,098.3 1,304.5 161.6 53.6 
2008 1,178.2 1,315.9 122.0 66.1 
2009 1,276.5 1,317.9 103.3 8.4 
 
B. SUPPORT FOR SORGHUM AND FEED CORN  
1. Title of the programme 
 
 Support for sorghum and feed corn.   
 2. Period covered by the notification 
  2007-2009.    
3. Policy objective and/or purpose 
 
 The policy objectives are to ma intain sorghum and feed corn production and to facilitate the 
adjustment of paddy field utilization.   
 
4. Background and responsible authorities 
 
(a) Law and regulation:   
Regulation for the Purchase and the Sale of Dry-land Food Crops.  G/SCM/N/220/TPKM/Rev.1 
Page 4 
 
 
  (b) Responsible authority:  Council of Agriculture.   
5. Form of the subsidy/to whom and how the subsidy is provided 
 
 Purchase prices are determined by adding the ne t profits to the production costs of each.  The 
purchase prices have been set at NT$15 per kilogram  for feed corn and NT $14 for sorghum.  The 
purchase quantities are limited to 5,000 kilograms per hectare for feed corn and sorghum.  When the 
actual yield per hectare is above the purchase quantity  ceiling, farmers may sell their products to the 
Government at the import prices.  
 Purchases at the set prices are made for the farmers whose production of sorghum or feed 
corn had been purchased by the Government in the base year (1994-96) or the year preceding the 
current year.  The purchase of sorghum has been lim ited to the first crop grown in the western plain 
area of Taiwan.  The first and second crops of f eed corn have been pur chased for the western 
mountainous area and the eastern region, while on ly the second crop has been purchased for the 
western plain area.  The farmers are free to decide whether or not they want to sell products to the 
Government. 
 6. Amount of the subsidy 
  NT$218 million, NT$149 million and NT$107 millio n for 2007, 2008 and 2009 respectively. 
 
7. Duration of the subsidy and/or any other time-limits attached to it 
 
 The duration of the subsidy is not specified. 
  
8. Statistical data 
 
 Unit:  1,000 MT. 
Item Year Production Consumption Import Export 
Feed corn 2007 33.9 4,644.3 4,427.8 0.4 
2008 37.3 4,449.1 4,343.6 0.9 
2009 46.0 4,428.3 4,625.0 0.9 
Sorghum 2007 4.9 72.8 67.9 0.0 
2008 2.5 91.2 88.6 0.0 
2009 0.7 69.7 68.9 0.0 
 
C. SUPPORT FOR DIVERSIFIED CROPS  
1. Title of the programme 
 
 Support for diversified crops. 
 
2. Period covered by the notification 
 
 2007-2009.   
 3. Policy objective and/or purpose 
  The policy objectives are to facilitate the adju stment of paddy field utilization and to 
strengthen the farmland environmen tal conservation plan for sustainable use of farmland as the 
structure of agricultural production undergoes adjustment.  G/SCM/N/220/TPKM/Rev.1 
 Page 5 
 
 
   
4. Background and responsible authorities 
 
(a) Law and regulation:  Agriculture Development Act. 
(b) Responsible authority:  Council of Agriculture. 
5. Form of the subsidy/to whom and how the subsidy is provided 
 
 (1) Diversion payment:  
 The diversion payment is granted to the fa rmers who follow the diversion programme from 
rice production to the production of diversion cr ops and cohere with any of the following case: 
 
(a) Growing rice in the base year (1994-2003);  or, 
(b) Growing guaranteed price purchase crops of feed corn, sorghum or sugarcane in the 
base year;  or, 
(c) Registering as set-aside or diversion under "Rice Production and Rice field 
Diversion Projects" in the base year. 
 Diversion crops are selected according to s upply and demand conditions for such crops as 
sweet potatoes, peanuts, vegetable, forage and other miscellaneous crops. Diversion payments are 
made at NT$22,000 per hectare.  
 (2) Bonus payment:  
  In addition to the diversion payment, there is a bonus payment of NT$4,000 per hectare for 
the group diversion.  
 
6. Amount of the subsidy 
 
 NT$880 million, NT$889 million and NT$1,214 million for 2007, 2008 and 2009 
respectively. 
 7. Duration of the subsidy and/or any other time-limits attached to it 
  The duration of the subsidy is not specified.  
8. Trade effect 
 
 After the three stages of the rice diversion programme as well as set-aside programme had 
been implemented, the acreage planted in rice went down from 645,855 hectares to 255,415 hectares;  
that is a decrease of 60.5 per cent between 1983 (the year prior to the implementation of the projects) 
and 2009.  The production of rice was also down from 2.48 million tons to 1.28  million tons, a decline 
of 48.4 per cent.  The quantity of rice purchased  by the Government was reduced from 1.1 million 
tons to 0.18 million tons, a decrease of 83.64 per cen t.  Measures relating to sweet potatoes, peanuts, 
vegetable, forage and other mis cellaneous crops had contributed to  reductions in the production of 
rice.  G/SCM/N/220/TPKM/Rev.1 
Page 6 
 
 
  D. SUPPORT FOR TOBACCO LEA VES  
1. Title of the subsidy programme 
 
 Support for tobacco leaves. 
 
2. Period covered by the notification 
  Crop years 2006/2007-2008/2009  
3. Policy objective and/or purpose 
 
 The purposes of the programme are to mainta in the tobacco farmers' income level and 
improve the quality of tobacco leaves produced. 
 4. Background and responsible authorities 
 
(a) Law and regulation:   
The Tobacco and Alcohol Administration Act (The former is The Provisional Statute 
for Monopoly of Tobacco and Wine in Taiwan Province). 
(b) Authorities:  Ministry of Finance. 
Note:  The Provisional Statute for the Monopoly of Tobacco and Wine in Taiwan Province was 
abolished on 1 January 2002.  The Taiwan Tobacco and Wine Monopoly Bureau was replaced by the 
Taiwan Tobacco & Liquor Corporation from 1 July 2002.  
5. Form of the subsidy/to whom and how the subsidy is provided 
  A purchase under restricted price tendering: 
  The Taiwan Tobacco & Liquor Corporation now makes a purchase under restricted price 
tendering according to the Government Procurement Act.  The amount of subsidy is the purchase 
quantity multiplied the price difference between the purchase price and external reference price which 
is based on average of the price in 1990-1992. 
 
6. Amount of the subsidy 
 
 NT$ 174.4 million, NT$ 193.2 million and NT$ 234.7 million for the crop years 2006/2007, 
2007/2008 and 2008/2009 respectively.  
7. Duration of the subsidy and/or any other time-limits attached to it 
 
 The duration of the subsidy is not specified. 
 
8. Statistical data 
  Unit:  MT. 
Item Year Production 
(Crop year) Consumption Import Export 
Tobacco leaves 2007 1,672 12,271 12,826 2,227 
2008 1,725 16,230 14,505 0.0 
2009 1,928 16,152 14,224 0.1  G/SCM/N/220/TPKM/Rev.1 
 Page 7 
 
 
   
E. SUPPORT FOR SUGAR  
1. Title of the subsidy programme 
 
 Support for sugar. 
 
2. Period covered by the notification 
 
 Crop years 2008-2010. 
 
3. Policy objective and/or purpose 
 
 The purpose of the programme is to develop the sugar industry in cooperation with the 
farmers.    
4. Background and responsible authorities 
 
(a) Law and regulation:  Regulation for the Sugarcane Planting Contract.   
(b) Authorities:   The Taiwan Sugar Corporation.   
    Ministry of Economic Affairs.   
 
5. Form of the subsidy/to whom and how the subsidy is provided 
 
 (1) Guaranteed purchase:   
 
 The Taiwan Sugar Corporation made contract s with farmers for the purchase of sugarcane 
and sugar sharing.  The sugarcane farmers obtain 55 per cent of the sugar made from sugarcane.  If 
the domestic selling price of sugar is higher than the prepaid contract price, the sugarcane farmers are 
paid the domestic selling price.  If the domestic selling price is lower than the prepaid contract price, 
the farmers are paid the prepaid contract price.  The contract price was set after taking domestic 
selling price and the marketing costs into account.  It has been frozen since 1990.    
 (2) Other grants:  
  The corporation provides grants to sugarcane fa rmers such as interest s ubsidy for loans for the 
purchase of inputs, insurance premium for sugar cane farms, fees for pest and disease control, 
inspection fees for sugar brix, and others.    
6. Amount of the subsidy 
 
 NT$ 125.5 million, NT$ 94.3 million and NT$ 56.7 million for the fiscal years 2008, 2009 
and 2010 respectively. 
 
7. Duration of the subsidy and/or any other time-limits attached to it 
 
 The duration of the subsidy is not specified. 
 G/SCM/N/220/TPKM/Rev.1 
Page 8 
 
 
  8. Statistical data 
 
  Unit:  1,000 MT.  
Item Year Production Co nsumption Import Export 
Raw Sugar 2008 67.8 601.6 549.5 11.5 
2009 45.7 606.8 564.0 0 
2010 56.8 554.2 419.4 0 
 
F. INTEREST SUBSIDY  
1. Title of the subsidy programme 
 
 The policy-oriented special agricultural loan.  
2. Period covered by the notification 
 
 2007-2009. 
 
3. Policy objective and/or purpose 
  The overall objective is to assist farmers and businesses in agricultural industries to raise the 
funds needed for them to be able to operate smoot hly.  This plan was devised to help them update 
their equipment, improve developmental skills an d innovation, increase the added-value in their 
products, and strengthen product sales and their competitiv eness in the world.  In addition, the plan 
helped farmers who were affected by natural di sasters to rebuild their homes and their livelihoods, 
thus helping to raise their standard of living. 
 4. Background and responsible authorities 
 
(a) Law and regulation:   Agriculture Devel opment Act.  Agriculture Finance Act. 
Regulation of Agricultural Development Fund 
(b) Authorities:  Council of Agriculture. 
5. Form of the subsidy/to whom and how the subsidy is provided 
 
 Preferential interest rate loans:  the loan capital was provided from credit departments of 
farmers' associations and fishermen's associations or The Agricultural Bank of Taiwan.  The source of 
finance for the interest subsidies is  the Agricultural Development Fund. 
 
6. To whom and how assistance is provided 
 
(a) These preferential interest rate loans are available to all farmers and fishermen, and 
are not limited to a specific indus try or enterprise of agriculture. 
(b) Different ceilings are set for different typ es of loan. Each application (for the loan) 
is subject to the given loan ceiling. The amount of loan granted is decided by the bank, based on the financial situation of the applicant. 
7. Amount of the subsidy 
 
 The amount of interest subsidy was NT$2,083.1 million, NT$2,485.5 million and 
NT$ 2,803.1 million for the fiscal y ears 2007, 2008 and 2009 respectively.  G/SCM/N/220/TPKM/Rev.1 
 Page 9 
 
 
   
8. Duration 
 
 The duration of the subsidy is not clearly specified.   
 
9. Trade effects or related statistical data 
 
(a) Trade effects:   
The programme is mainly used to promote the upgrading of the industry.  Given the 
scope and nature of the programme, it is not possible to determine what, if any, 
trade effects may result directly from this programme.  
(b) Related statistical data:   
Interest subsidy for loans granted in 2007, 2008 and 2009 
 
  Unit:  1,000 NT$ 
Name of Project 2007 2008 2009 
Loans for expanding the family farm;  to support 
farmers buying land 76,831 101,007 122,073 
Loans for farm machinery 141,938 145,818 145,777 
Loans for natural agricultura l disasters 60,388 54,870 63,666 
Loans for accelerating rural construction 1,803,937 2,183,819 2,471,600 
Total 2,083,094 2,485,514 2,803,116 
 
Note:  Loans for accelerating rural construction include such items as:   
1. Loans in the agricultural food industry to provide  guidance and assistance to 
management.   
2. Loans in the livestock and poultry industry for improving management 
efficiency.   
3. Loans to farmers to provide guida nce, assistance and management 
improvement.   
4. Preferential loans extended to those bus inesses that move into the agricultural 
technology park.   
5. Loans for agriculture production and marketing groups.   
 II. FISHERIES 
A. 
FISHING VESSELS BUY -BACK PROGRAMME  
1. Title of the programme 
 
 Fishing Vessels Buy-back Program.    G/SCM/N/220/TPKM/Rev.1 
Page 10 
 
 
  2. Period covered by the notification 
 
 January 2009-December 2010.    
3. Policy objective and/or purpose  
 
 Due to severe overfishing worl dwide, the UN has been urgently calling on nations to reduce 
their fishing capacities.  This programme seeks to  alleviate pressures on the fishery resources and 
ensure their sustainability.   
 
4. Background and responsible authorities 
 
(a) Law and regulation:   
Regulation for the Fishing Vessels Buy-back Procedures (2009-2010).   
(b) Authority:  Fisheries Agency, Council of Agriculture.   
5. Form 
 
 Grant.   
 
6. To whom and how assistance is provided 
 
(a) Beneficiaries:  Owners of all varieties of  fishing vessels with valid fishing licences, 
including recreational fishing vessels.   
(b) Content:  
1. The following are the buy-back amounts of  fishing vessels of deep-sea fishery, 
calculated and accumulated in 2009:   
 NT $70,000 for each gross ton for the 1st to 5th ton; 
 NT $60,000 for each gross ton for the 6th to 10th ton; 
 NT $50,000 for each gross ton for the 11th to 20th ton; 
 NT $40,000 for each gross ton for the 21st to 50th ton; 
 NT $35,000 for each gross ton for the 51st to 100th ton; 
 NT $18,000 for each gross ton over 100 tons; 
Total amount for each eligible vessel is unlimited. 
2. The following is the buy-back amount of  fishing vessels of inshore fisheries, 
calculated and accumulated in 2009-2010:   
 NT $50,000 for each gross ton for the 1st to 5th ton; 
 NT $40,000 for each gross ton for the 6th to 10th ton;  G/SCM/N/220/TPKM/Rev.1 
 Page 11 
 
 
   NT $30,000 for each gross ton for the 11th to 20th ton; 
 NT $25,000 for each gross ton for the 21st to 50th ton; 
 NT $20,000 for each gross ton for the 51st to 100th ton; 
 NT $18,000 for each gross ton over 100 tons;  with 
The highest total amount for each eligible vessel being NT $7.9 million.   
3. The following is the buy-back amount of fishing rafts calculated in 2006:   
 NT $200,000 for below 6 M; 
 NT $300,000 for 6-below 10 M; 
 NT $450,000 for 10-below 15 M; 
 NT $600,000 for 15-below 20 M; 
 NT $700,000 for 20 M and over. 
4. The following is the buy-back amount of fishing rafts calculated in 2007:   
 NT $190,000 for below 6 M; 
 NT $285,000 for 6-below 10 M; 
 NT $427,500 for 10-below 15 M; 
 NT $570,000 for 15-below 20 M; 
 NT $665,000 for 20 M and over. 
5. Since 2008, the buy-back of fishing rafts were  calculated according to the length of 
raft, the pipe diameter and the power of main engine respectively.   
7. Amount 
 
 Funds spent on buying back fishing vessels and rafts in 2009 totalled NT $607.623million;  
funds spent in 2010 totalled NT $ 118.245 million.   
 
8. Duration 
 
 The duration of the subsidy is not clearly specified.  
  9. Trade effects or related statistical data 
  N/A G/SCM/N/220/TPKM/Rev.1 
Page 12 
 
 
   
B. REWARD FOR CLOSING FISHERY SEASON  
1. Title of the programme  
 
 Reward for Closing Fishery Season.   
 
2. Period covered by the notification 
 
 January 2009-December 2010.   
 
3. Policy objective and/or purpose  
 
 Due to the global overfishing problem, the UN is calling on nations to reduce their catches.  
This programme seeks to alleviate pressures on fish ery resources and ensure their sustainability.   
 
4. Background and responsible authorities 
 
(a) Law and regulation:  Regulation for the Voluntary Closing Fishery in 2010.   
(b) Authority:  Fisheries Agency, Council of Agriculture.   
5. Form 
 
 Grant.   
 6. To whom and how assistance is provided 
  Any fishing vessels with valid fishing licences that correspond with the related regulations of 
closing fishery except recreational fishing charter boats.   
 7. Amount 
  The budget for the programme totalled NT $159.151 million in 2009 and NT$166.670 million 
in 2010.   
 
8. Duration 
 
 The duration of the subsidy is not clearly specified.  
  9. Trade effects or related statistical data 
 
N/A 
 
C. FISHING VESSELS MARINE INSURANCE REWARD  
1. Title of the programme 
 
 Fishing Vessels Marine Insurance Reward.    
2. Period covered by the notification  
 
 January 2009-December 2010.    G/SCM/N/220/TPKM/Rev.1 
 Page 13 
 
 
   
3. Policy objective and/or purpose 
 
 Insure fishing vessels agai nst marine disasters.   
 
4. Background and responsible authorities 
 
(a) Law and regulation:   
Regulation for the Insurance Reward for Owners of Fishing Vessels.   
(b) Authority:  Fisheries Agency, Council of Agriculture.   
5. Form 
 
 Grant.   
 6. To whom and how assistance is provided 
 
(a) Beneficiaries:  Owners of fishing vessels 
(b) Content:  The programme provides grants to cover part of the costs of insurance for 
fishing  vessels in case of damage at sea.  
7. Amount 
 
 The budget for the programme totalled NT $87.413 million for 2009 and NT$103.655 million 
in 2010.    
8. Duration 
  Ongoing since 1987.   
 9. Trade effects or related statistical data  
  N/A  
 
III. INDUSTRY 
A. 
LOANS - LOANS FOR SMALL AND MEDIUM -SIZED ENTERPRISES (SMES ) 
1. Specific and urgent financing and loans in tended for recovery plans from damage 
caused by disasters 
1. Title of the programme 
 
 Specific and urgent financing and loans inte nded for recovery plans from damage caused by 
disasters.   
 
2. Period covered by the notification 
  Fiscal year 2008-2009.   G/SCM/N/220/TPKM/Rev.1 
Page 14 
 
 
   
3. Policy objective and or/purpose 
 
 Qualified SMEs are entitled to apply for fina ncing and loans that are provided for helping 
enterprises restructure during periods of replacing machinery and purchasing new automated 
equipment.  
  
4. Background and responsible authorities 
 
(a) Law and regulation:   
Statute for Development of Small and Medium-Sized Enterprises (Articles 9, 15, 17 
and 18).   
Procedure for Income-Expenditure Safe guarding and Utilization of the SME 
Development Fund.   
The SME Development Fund was established based on Article 9 of the Statute for 
Development of Small and Medium-Sized Enterprises.   
(b) Authority:  The Ministry of Economic Affairs.   
Note:  The cumulative amount reached by the end of fiscal year 2009 for the SME Development Fund 
was NT$ 6.87 billion.   
 5. Form 
  Financing and loan.    
6. To whom and how assistance is provided 
  All enterprises which meet the "Standards for Identifying a Small and Medium-Sized 
Enterprise" are eligible to apply.    
 According to the "Standards for Identifying a Small and Medium-Sized Enterprise" published 
by the Ministry of Economic Affairs, an SME is a company or commercial enterprise registered in 
accordance with the law with capital or operati ng revenue below the following thresholds:   
 
(a) For enterprises engaged in manufacturing, construction, mining or  excavating, paid-in 
capital of less than NT$ 80 million.   
 
(b) For enterprises engaged in other econom ic activities such as agriculture, logging, 
fishing, the raising of livestock, utiliti es, commerce, trans port, warehousing, 
communications, finance, insurance, real estate, commercial, social or individual 
services, an annual operating revenue of less than NT$ 100 million.   
 
 The loan granted is provided by the SME Deve lopment Fund.  The ceiling interest rate is 1 
per cent plus a flat rate of the 2-year postal fixed savings rate.   
 
7. Amount 
 
 Statistics for Specific Programmes:   
  G/SCM/N/220/TPKM/Rev.1 
 Page 15 
 
 
  Loaned by the SME Development Fund 
 
  Unit:  million NT$.   
Title of Programme 2008-2009 
Urgent financing for major natural disasters 354.9 
 
8. Duration 
 
 The above-mentioned programme loaned by the SME Development Fund ceased to apply 
after 2009.   
 9. Trade effects or related statistical data 
  Given the fact that in the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, 
98 per cent of enterprises can meet the criteria and t hus be termed SMEs, it is difficult to estimate the 
trade effects of these programmes.   
 
2. Medium- and long-term loans for product ma rketing and loans for overseas investment 
and construction projects 
1. Title of the programme 
 
 Medium- and long-term loans for product mark eting, and loans for overseas investment and 
construction projects.    
2. Period covered by the notification 
  Fiscal year 2008-2009.   
 3. Policy objective and or/purpose 
  Those programmes are implemented with the purpose of providing SMEs with financial 
assistance in exploring new markets for their machinery and equipmen t, in investing and establishing 
plants in foreign countries, and in undertaki ng overseas contracts for construction projects.   
 4. Background and responsible authorities 
 
(a) Law and regulation:  
Statute for Development of Small and Medi um-Sized Enterprises (Articles 9, 15, 
and 16).   
Procedure for Income-Expenditure, Safe guarding and Utilization of the SME 
Development Fund.   
 
(b) Authority:  The Ministry of Economic Affairs.   
 
5. Form 
 
 Loan.   
 G/SCM/N/220/TPKM/Rev.1 
Page 16 
 
 
  6. To whom and how assistance is provided 
 
(a) All enterprises which meet the "Standard s for Identifying a Small and Medium-Sized 
Enterprise" are eligible for application.   
 
(b) The approval of loan applications is pe rformed by commercial banks.  However, the 
capital needed is provided entirely by the SME Development Fund.   
 7. Amount 
  Loaned by the SME Development Fund.    FY 2008-2009:  NT$ 1 billion.   
 
8. Duration of subsidy 
 
 The programmes are not subject to any fixed completion date.   
 9. Trade effects or related statistical data 
  Given the fact that in the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, 
98 per cent of enterprises can meet the criteria and t hus be termed SMEs, it is difficult to estimate the 
trade effects of these programmes.   
 B. 
LOANS FOR PRIVATE ENTERPRISES  
1. Loans for small and medium-sized enterprises and private enterprises 
1. Title of the programme 
 
 Loans for small and medium-sized en terprises and private enterprises.   
 
2. Period covered by the notification 
 
 The fiscal years 2009 and 2010.   
 
3. Policy objective and/or purpose 
 
 The programme is implemented with the purpose of improving production technology and 
product quality, promoting industria l upgrading and to assist in the upgrading of small and medium-
sized enterprises and private enterprises.   
 
4. Background and responsible authorities 
 
 (a) Law and regulation:   
 
  1.  Prior to 12 May 2010 – The Statute for Upgrading Industries, sub-paragraphs 
(2) and (3), paragraph 1 of Article 21. 
 
  2.  The Statute for Upgrading Industries,  sub-paragraphs (2) and (3), paragraph 1 
of Article 21 was superseded by Article  30 of the Industrial Innovation Act, 
promulgated on 12 May 2010. 
 
  G/SCM/N/220/TPKM/Rev.1 
 Page 17 
 
 
   (b) Authorities:   
 
 The guidelines for the loan programme are produced by the Development Fund.   
 
5. Form 
  Loans:  each loan is provided by the Development Fund (25 per cent) and the bank 
(75 per cent).  
6. To whom and how assistance is provided 
 
The loans are available to all enterprises a nd are not limited to a specific industry or 
enterprise.   
 7. Amount 
  There are no official statistics with respect to the programme.    
8. Duration 
 
 The projects will be implemented until the expiration of the Industrial Innovation Act.   
 
9. Trade effects or related statistical data 
 
(a) Trade effects: 
 
 The programme is mainly used to promote industry upgrading.  In light of the scope 
and nature of the programme, it is not possible to determine what, if any, trade effects may result.   
 
(b) Related statistical data:   
 
Total amount of loans granted in 2009 
 
Name of Project Number of granted cases Total amount of  
granted loans  
(hundred million NT$) 
Loans to assist in the upgrading of small 
and medium-sized enterprises 336 36.55 
 
Total amount of loans granted in 2010 
 
Name of Project Number of granted cases Total amount of granted 
loans  
(hundred million NT$) 
Loans to assist in the upgrading of small 
and medium-sized enterprises 485 58.24 
 G/SCM/N/220/TPKM/Rev.1 
Page 18 
 
 
  C. DUTY AND TAX EXEMPTIONS GRANTED TO ENTER PRISES LOCATED WITHIN A DESIGNATED 
ZONE  
1. Duty and tax exemptions for high-technology industries 
1. Title of the programme 
 
 Duty and tax exemptions for high-technology industries.   
 
2. Period covered by the notification 
 
 Fiscal year 2009-2010.   
 3. Policy objective and/or purpose 
  This programme is implemented with a view to stimulating the research and innovation of 
industrial technology and to promote the developm ent of advanced technology in the Separate 
Customs Territory of Taiwan, Penghu, Kinmen and Ma tsu.  The "Science-Based Industrial Park"("the 
Park") has been established by introducing sophi sticated industries and personnel with advanced 
technological backgrounds into a designated zone.   
 
4. Background and responsible authorities 
 
 (a) Law and regulation:   
 
 Statute for the Establishment and Administ ration of a Science-Based Industrial Park 
(Article 20);   
 Implementing Regulation of Statute for th e Establishment and Administration of a 
Science-Based Industrial Park (Article 17).   
  (b) Authorities:   The Park is managed by the Science Park Administration;   
    The policy-making body is the National Science Council.   
 5. Form 
  The subsidy programme will be implemented in  the form of duty and tax exemptions.   
 
6. To whom and how assistance is provided 
 
 (a) Effective from 1 January 2000, the merged  Park entities in acco rdance with domestic 
Company Law, or surviving or new Park entities after mergers, shall succeed to the 
tax benefits, which are not yet terminated nor fully offset, originally enjoyed by the dissolving science-based industry before mergers.  As for succeeding to the 
exemption of profit-seeking income tax as investment incentives from the dissolving 
Park entities, the surviving Park entities with in the scope of science-based industries 
under the merger/consolidation projects sha ll continue to produce products or to 
provide services identical to those produced or provided by the dissolving Park entities and such tax benefits shall apply only to the portion of income derived from 
products or services independently produced or provided by the original dissolving 
Park entities.  If the tax benefits are provide d in the manner of investment offset or 
deduction, such tax benefits shall appl y only to the payable tax portion of the 
surviving or new Park entities after merger s of the dissolving science-based industries 
(Article 18).    G/SCM/N/220/TPKM/Rev.1 
 Page 19 
 
 
   
 (b) All Park enterprises are entitle d to the following exemptions:   
 (i) Customs duties, commodity tax, and business tax on imported machinery and 
equipment, raw materials, commodities, fuel, and semi-finished products, and 
 
  (ii) Commodity tax and business tax on exported goods or labour services.   
 Note 1:  Park enterprise refers  to the science-based industry a nd to an enterprise approved and 
established in the Park able to provide services in respect of operational, management or technical 
support to science-based industries.    
 A research and development institution or a ve nture capital investment incubatory centre may 
also apply for establishment and operation in the Park.    
 The venture capital investment incubatory centr e eligible for establishm ent in the Park shall 
be limited to one that engages in research a nd development activities, does not engage in mass 
production and has been approved by the Park Administra tion.  It will stay in the Park for a period of 
not more than three years.  
  Note 2:  According to Section 2, paragraph 1, Artic le 3 of the Commodity Tax Statute and Article 7 of 
the Value-added and Non Value-added Law, exports  can be exempted from commodity tax and the 
business tax rate on exported goods is zero.  These tax treatments are not specific to enterprises 
located in the Park, as they are generally availabl e for exported goods, regardless of whether or not 
the manufacturers are located in the Park.   
 
7. Amount 
 
2009-2010 Business Tax Exemption for all Imports 
  Unit:  NT$ million 
Year Total Import Value Total Amount of Business 
Tax Exemption 
2009 450,930 22,546 
2010 757,636 37,881 
 8. Duration 
  There is no time limit attached to the programme.    
9. Trade effects or related statistical data 
 
  Unit:  NT$ million 
Year 2009 2010 
Number of approved park enterprises 
(accumulated numbers) 686 721 
Total import value 450,930 757,636 
Total export value 886,478 1,227,250 
 
 In light of the scope and nature of the progra mmes granted, it is not yet possible to determine 
what, if any, trade effects may result from this subsidy programme.   
 G/SCM/N/220/TPKM/Rev.1 
Page 20 
 
 
  2. Duty and tax exemptions for in-zone enterprises 
1. Title of the programme 
 
 Duty and tax exemptions for in-zone enterprises.   
 
2. Period covered by the notification 
  Fiscal years 2009-2010.    
3. Policy objective and/or purpose 
 
 Export Processing Zones have been established for the purpose of promoting investment and 
international trade.   
 4. Background and responsible authorities 
  (a) Law and regulation: 
 Statute for Establishment and Administration of Export Processing Zones (the 
EPZ Law), (Articles 1, 5 and 13).   
 Measures for the Screening of Application for Establishment of Enterprises in Export 
Processing Zones.   
  Categories of Industry eligible to be  established in Export Processing Zones.   
  (b) Authorities:   
  Export Processing Zones are managed by the Export Processing Zone Administration.   
  The policy-making body is the Ministry of Economic Affairs.   
  The task for reviewing the eligibility of enterprises established in Export Processing 
Zones shall be undertaken by the Export  Processing Zone Administration together 
with the other government agencies involved.   
 
Note:  In-zone enterprises include industries author ized to be engaged in manufacturing, processing, 
assembly, research and development, trade, c onsulting, technical services, warehousing, 
transportation, loading and unloading, packing, re pairs and other related businesses approved by the 
Ministry of Economic Affairs for Export Processing Zones.    
5. Form 
 
 Duty and tax exemptions.   
 
6. To whom and how assistance is provided 
 
 All in-zone enterprise industries are en titled to the following exemptions:   
 
 (a) Import duty, commodity tax and busin ess tax on imported machinery and equipment. 
   
(b) Import duty, commodity tax, and bus iness tax on imported raw and consumption 
materials, fuels, semi-finished products, samples, and finished products for 
transhipment by traders and warehousing operators.  
  
(c) Deed tax when acquiring a new standard plant building in the Export Processing Zone 
or acquiring a building from the Export Processing Zone Administration.    G/SCM/N/220/TPKM/Rev.1 
 Page 21 
 
 
   
 It should be noted that, within five years of import, all machinery and equipment is not 
entitled to duty and tax exemptions when shipped to leviable areas from Export Processing Zones.  
Moreover, products manufactured by in-zone ente rprises shall be subject to customs duties, 
commodity taxes and business taxes when they are sh ipped to leviable areas.  While customs duties 
would be applied on the basis of ex-factory pri ces minus value-added resulting from manufacturing or 
processing activities in the EPZs, other taxes w ould be based on the ex-factory price.   
 7. Amount 
 
2009-2010 Business Tax Exemption for all Imports 
 
  Unit:  US$ Thousand 
Year Total Import Value Total Amount of Business 
Tax Exemption 
2009 6,164,645 308,232 
2010 9,086,176 454,309 
 8. Duration 
  There is no time limit attached to the programme.    
9. Trade effects or related statistical data 
  In light of the scope and nature of the progra mmes granted, it is not yet possible to determine 
what, if any, trade effects may result from this subsidy programme.  
D. 
SUBSIDIES FOR THE ESTABLISHMENT AND OPER ATION COSTS OF PETROLEUM FACILITIES , AND 
PRODUCTS CONSUMPTION COSTS IN THE MOUNTAIN AREAS AND OFFSHORE ISLAND AREAS  
1. Title of the programme 
 
 Subsidies for the establishment and operation costs of petroleum facilities, and products 
consuming costs in the mountain areas and offshore island areas.   
 
2. Period covered by notification  
 
 (1)  The Facilities Costs －the years 2009-2010 
 
  (2)  Household Liquefied Petroleum Gas (LPG) costs －from August 19, 2010 
 
3. Policy objective 
 
 (1)  To encourage the facilities operators ma intaining products supplies in such areas. 
 
(2)  To reduce the pricing level differences between cities and such areas. 
 
4. Background and responsible authorities 
 
 (1) Law and regulation:  Petroleum Admini stration Act and its relative regulations.   
  (2) Responsible authority:  Bureau of Energy, Ministry of Economic Affairs.   G/SCM/N/220/TPKM/Rev.1 
Page 22 
 
 
   
5. Form 
 
 Grant.   
 
6. To whom and how the subsidy is provided 
  (1) Owners and/or operators of the petrol eum facilities in these areas are entitled to apply 
for the following items:   
  
(a) Subsidy for the establishment of petroleum facilities in mountain and offshore 
island areas. 
(b) Subsidy for maintenance cost of petr oleum facilities in mountain and offshore 
island areas. 
(c) Subsidy to offset the cost of shipping petroleum or LPG to mountain and 
offshore island areas. 
(d) Subsidy for extra personnel costs in th e operation of petroleum facilities in 
mountain or offshore island areas. 
 (2) Subsidy to diminish the price difference of Household LPG between the mountain 
Areas and urban or/and suburban areas. 
 
7. Amount for the past three years 
 
 Statistics for specific subsidies:   
  Unit:  thousand NT$ 
 
Title of Subsidy Year 2009 2010 
Subsidy for the establishment of petroleum 
facilities in mountain and offshore island areas2 6,948 
Subsidy for maintenance cost of petroleum 
facilities in mountain and offshore island areas8,593 7,834 
Subsidy to offset the cost of shipping 
petroleum or LPG to mountain and offshore 
island areas 141,287 149,353 
Subsidy for extra personnel costs in the 
operation of petroleum facilities in mountain or offshore island areas 28,671 28,160 
Subsidies to diminish the price difference of 
Household LPG between the mountain Areas 
and urban or/and suburban areas - 2,252 
Total 178,553 194,547 
 
8. Duration 
  (1) The Programme was initiated in 2002, but the household LPG subsidy in mountain 
areas was started since August 19, 2010. 
 
(2) Not subject to any fixed deadline date.    G/SCM/N/220/TPKM/Rev.1 
 Page 23 
 
 
   
9 Trade effects or related statistical data 
 
 The Programme is based on an nual budgetary from Petroleum Fund. In light of the scope and 
nature of the activities may be financially supporte d by these subsidies, it is not yet possible to 
determine what, if any, trade effects may eventually result from this programme.   
 
IV. RESEARCH AND DEVELOPMENT 
A. FUNDS GRANTED FOR DEVELOPMENT OF NEW LEADING INDUSTRIES  
1. Title of the programme 
 
 Grants for development of new leading industries.   
 
2. Period covered by the notification 
 
 The fiscal years 2009 and 2010.   
 3. Policy objective and/or purpose 
  In order to encourage research and developm ent on new leading products and upgrade the 
technical capability of the leading industries, the pr ogramme grants funds for private enterprises.   
 
4. Background and responsible authorities 
 
 (a) Law and regulation:   
 
  Measures for Assistance in the Development of New Leading Products were 
promulgated on 26 April 1991 and were supe rseded by the Subsidy and Assistance 
Regulations for Promoting Industry Innovatio n by the  Ministry of Economic Affairs 
on 15 November 2010. 
  (b) Authority:   
 
  The Industrial Development Bureau, Ministry of Economic Affairs.   
 
5. Form 
 
 Grant.   
 
6. To whom and how assistance is provided 
 
(a) Any company incorporated under the Company Law with sound financial standing 
and without ever having a record of refu sal or bounced cheque through a bank in the 
Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, may apply for 
the assistance fund relating to the developmen t of a new leading product. The product 
should possess great market potential and its core technology should surpass the 
current level of domestic industrial technology.   
 
(b) The assistance funds granted are a total of no more than fifty percent (50 per cent) of 
the amount of the following expenses incurred exclusively for the development of 
new leading products:   G/SCM/N/220/TPKM/Rev.1 
Page 24 
 
 
   
1. Costs incurred for full-time and/or part-time research personnel;   
2. Costs of consumable instruments and raw materials;   
3. Costs for use and maintenance of R&D equipment;   
4. Costs for technology transfer.   
7. Amount 
 
 (a) Since the programme's inception, the cumulative amount of grant stands at NT$ 
14,558,429,854 at the end of fiscal  year 2010 (fiscal years 1992-2010). 
 
(b) For the fiscal year 2009:  the amount of  grant was NT$ 500,578,340.  A breakdown 
of the products involved is shown below:   
  Unit:  thousand NT$ 
Name of Project (or Sector) Grant 
3C Industry 68,757 
Medical and health care  38,824 
Precision machinery and automation  76,427 
Pollution Prevention 7,897 
Specialty chemicals and pharmaceuticals  53,730 
Aerospace 7,756 
Advanced materials 94,686 
Semi-conductors 54,962 
Culture industry 97,539 
Total 500,578 
 
 (c) For the fiscal year 2010:  the amount of grant was NT$ 799,902,154.  A breakdown 
of the products involved is shown below:   
  Unit:  thousand NT$ 
Name of Project (or Sector) Grant 
3C Industry 133,395 
Medical and health care 84,788 
Precision machinery and automation 85,954 
Precision Machinery 52,351 
Pollution Prevention 44,009 
Specialty chemicals and pharmaceuticals 94,407 
Aerospace 46,159 
Advanced materials 80,898 
Semi-conductors 145,924 
Culture industry 32,017 
Total 799,902 
 
8. Duration 
  There is no time-limit attached to the programme.   
  G/SCM/N/220/TPKM/Rev.1 
 Page 25 
 
 
  9. Trade effects or related statistical data 
 
 It is not yet possible to determine what, if any, trade effects may result from this subsidy 
programme.   
 
B. FUNDS GRANTED FOR PROMOTING DEVELOPMENT OF INDUSTRIAL TECHNOLOGY  
1. Title of the programme 
 
 Technology Development Programme for Enterprise.   
 
2. Period covered by the notification 
 
 Fiscal year 2009-2010 (Jan 2009 to Dec 2010).   
 3. Policy objective and/or purpose  
  The programme's objective is to encourage businesses to engage in the development of 
technological innovations and applications for th e purpose of reinforcing domestic enterprises' 
capabilities, especially in the field of research and development.   
 4. Background and responsible authorities 
  (a) Law and regulation:    
Regulations of Subsidization for Encour aging Enterprises R & D Activities were  
promulgated on 27 November 2002 and were  superseded by the Subsidy and 
Assistance Regulations for Promoting Industry Innovation by the Ministry of 
Economic Affairs on 15 November 2010.   
 
 (b) Authority:   
 
Department of Industrial Technology, Ministry of Economic Affairs.   
 
5. Form 
 
 Fund assistance for advanced research and development.   
 6. How assistance is provided and to whom 
  (a) Any company established according to Co mpany Law with sound financial standing 
and a Research and Development Department that has made significant achievements 
in the past, and which is currently staffed by competent specialists, in the Separate 
Customs Territory of Taiwan, Penghu, Kinmen and Matsu, may apply for this fund to 
offset the costs of the following activities:   
 
1. The planning or development of industrial technologies that may be aptly 
characterized as vital, innovative or integrative.   
2. Development of innovative or integrative manufacturing technology by small 
and medium-sized businesses.   
3. Development of innovative IT application systems.   G/SCM/N/220/TPKM/Rev.1 
Page 26 
 
 
  4. Development of innovative business m odels by strategic services-oriented 
research.   
5. Cooperate with major national techno logy-related policies and create an 
environment conducive to the developmen t of technology and industry within 
civilian business enterprises.   
 (b) The assistance funds to be granted shall not exceed 50 per cent of the total amount of 
the following expenses: 
 
1. Costs incurred for full-time and/or part-time research personnel;   
2. Costs of consumable instruments and raw materials;   
3.  Costs for use and maintenance of R&D equipment;   
4.  Costs for technology transfer;  and 
5. Domestic and overseas travel expenses. 
7. Amount 
 
 The total amount of grant in the fiscal year 2009-2010 was NT$ 6,563,000,000.   
 8. Duration 
  There is no time-limit attached to the programme.    
9. Trade effects or related statistical data 
 
 It is not yet possible to determine what, if any, trade effects may result from this subsidy 
programme.   
 
C. FUND GRANTED FOR ENCOURAGING EXPLORATION AND DEVELOPMENT OF OIL AND NATURAL 
GAS RESERVES  
1.  Title of the programme 
 
 Fund Granted for Encouraging Exploration and Development of Oil and Natural Gas 
Reserves.   
 
2. Period covered by notification  
 
  2009-2010.   
 3. Policy objective and/or purpose 
 
 The policy objectives of the programme are to  secure oil supply and stabilize the domestic oil 
market.   
 
4.  Background and responsible authorities 
  (a) Law and regulation:  Petroleum Administration Act.   
 (b) Responsible authority:  Bureau of Energy, Ministry of Economic Affairs.   
  G/SCM/N/220/TPKM/Rev.1 
 Page 27 
 
 
  5. Form 
 
 Grant.    
6. How assistance is provided and to whom 
  Companies limited by shares incorporated under the Company Law that engage in the 
exploration and development of oil and natural gas reserves are eligible for the grant.   
 
 The grant is used only in support of the following activities: 
 
(1) The implementation of geological, geophy sical, and/or geochemistry surveys and 
research necessary for the exploration of oil and natural gas.  
 (2) Drilling for the exploration and/or developm ent of oil and/or natural gas reserves.   
 
(3) Any other necessary pertinent activities that have been reviewed and approved by the 
authorities.   
 
 The total subsidy allocated for an applicant's exploration proposal is not to exceed 50 per cent 
of the budget in the applicant's proposal.  The tota l subsidy allocated for an applicant's development 
proposal is not to exceed 12 per cent of the budget in the applicant's proposal.   
 7. Amount 
   Unit:  thousand NT$ 
Year 2005 2006 2007 2008 2009 2010 
Total 192,380 194,380 150,510 212,250 294,125 308,751 
 
8. Duration 
 
 The programme was initiated in 2002.  It is not subject to any fixed completion date.   
 
9 Trade effects or related statistical data 
 
 In light of the scope and nature of the activ ities that may be financially supported by the 
subsidy, it is not yet possible to determine what, if any, trade effects may eventually result from this 
programme.   
 
 
__________