. /.  WORLD TRADE  
ORGANIZATION  G/SCM/Q2/BGR/7 
16 November 2005 
 (05-5340) 
Committee on Subsidies and  
Countervailing Measures Original:   English 
 
 
 
 
SUBSIDIES 
 
Replies to Questions from the UNITED STATES1 Regarding the  
New and Full Notification of BULGARIA2 
 
 
 The following communication, dated 14 November 2005, is being circulated at the request of 
the Delegation of Bulgaria.  
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VII.   Assistance to Economic Development and Structural Adjustment 
 1.   Rescheduling of Tax Liabilities Related to Investment 
 
Q1. Is the assistance to Varnensko Pivo Company under this particular programme being 
provided exclusively to the company, or is  the same assistance available under the same 
authority to other companies in Bulgaria?  
Reply
 
  In general, all companies in Bulgaria can a pply for such assistance provided that they abide 
by the rules and procedures foreseen in the Ta x Procedure Code, State Property Act, Law on the 
Ownership and Use of Agricultural Land and state aid legislation.  In 2004 such assistance was 
granted to the companies mentioned. 
 
Q2. Please explain the form of the subsidy in  more detail, particularly in regard to the 
following:   -   What sort of taxes are being rescheduled? 
 -   Are any of the tax liabilities being forgiven, or any of the penalties being waived? 
 -   Is the interest rate charged comparable to a commercial interest rate? 
 
Reply
 
 
 The rescheduled taxes related to corporate in come taxes, local taxes and fees, value added 
taxes and excise taxes.  In the case in question there were no tax liabilities forgiven and penalties 
waived.  An interest charge up to the amount of the base interest rate was agre ed to be collected for 
the period of the deferral agreement. 
 
                                                      
1 G/SCM/Q2/BGR/6 
2 G/SCM/N/123/BGR G/SCM/Q2/BGR/7 
Page 2  
 
VII.   Assistance to Economic Development and Structural Adjustment 
 2.   Rescheduling of Tax Liabilities Related to Structural Adjustment  
 
Q3. Is the assistance to Vidachim Company under this particular programme being 
provided exclusively to the company, or is  the same assistance available under the same 
authority to other companies in Bulgaria?  
Reply
 
 
 See answer to Question 1. 
 
Q4. Please explain the form of the subsidy in  more detail, particularly in regard to the 
following:  
 - What kinds of liabilities are being reduced or rescheduled? 
 - Are any of these liabilities being forgiven, or any of the penalties being waived?  - Are the interest rates charged on th e rescheduled liabilities comparable to 
commercial interest rates? 
 
Reply
 
 
 In this case, the reduced and rescheduled liabilities were as follows:  tax and customs 
liabilities, social security liabilities, charges due to th e state.  Any of those liabilities were not forgiven 
and penalties were not waived.  The interest rates charged on the rescheduled liabilities were the base 
interest rate plus an interest charged on it. 
 
VII.   Assistance to Economic Development and Structural Adjustment 
 3.   Support to Regional Investment  Q5. Is the assistance to Trakia Glass Bulgar ia Company under this particular programme 
being provided exclusively to the company, or is the same assistance available under the same 
authority to other companies in Bulgaria?  
Reply
 
 
 See answer to Question 1. 
 
Q6. What does Bulgaria mean by "gratuitous transfer"?  Is the actual ownership of the land 
being transferred, or is the company simply being given the right to use the land?  
Reply
 
 
 In the case mentioned, the actual ownership of the land has been transferred to the company 
in accordance with the provision of Article 54(1) of the Sate Property Act ( "Gratuitous transfer of 
ownership over a property shall be carried out by a decision of the Council of Ministers, at the 
proposal of the Minister of Regional Developmen t and Public Works.  The regional governor shall 
conclude a contract for gratuitous transfer, which shall be registered in the entries office" ) and in 
connection with Article 24(1) of the Law on the Ownership and Use of Agricultural Land. 
 
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