WORLD TRADE  
ORGANIZATION  G/SCM/N/155/JOR/Suppl.1
G/SCM/N/177/JOR 3 July 2008 
 
(08-3187) 
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  
 
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  
 
JORDAN 
  
 The following communication, dated 27 June 2008,  is being circulated at the request of the 
Delegation of Jordan.    
_______________ 
 
 
 In accordance to Article XVI:1 of the GATT 1994 and Article 25 of the Agreement on 
Subsidies and Countervailing Measures, the Governme nt of Jordan is pleased to provide the WTO 
Committee on Subsidies and Countervailing Measures w ith its notification, in compliance with the 
"procedures for continuation of Extensions pursuant to Article 27.4 of the  SCM Agreement of the 
transition period under Article 27.2(b) of the SC M Agreement for certain developing countries" 
(document WT/L/691), and with reference also to  document G/SCM/39, on which Jordan was granted 
an extension for the elimination of export subsidies programme which take the form of full or partial 
exemptions from import duties and internal taxes and which were in existence under the programme 
on 1 September 2001.    
The decision was made in recognition that Jordan was a developing country Member, whose 
share of world merchandise export trade was not gr eater than 0.10 per cent and whose total Gross 
National Income for the year 2000 as published by the World Bank, was at or below US$20 billion, 
and was otherwise eligible to request an extens ion pursuant to Article 27.4 of the Agreement on 
Subsidies and Countervailing Measures ("SCM Agreement").    G/SCM/N/155/JOR/Suppl.1 
G/SCM/N/177/JOR Page 2 
 
 
  1. Title of the subsidy programme
 
 
Partial or Total Exemption from Income Tax for Profits on Certain Export.   
 2. Period covered by the notification
 
 
The period covered is the year 2007.   
 
3. Policy objective and/or purpose of the subsidy  
 
The main rationale for introducing this export subsidy programme was to offset the negative 
effects of the 1991 Gulf war, and the loss of Jordan 's main trading partner Iraq, the programme was 
introduced then to stimulate export performance, a nd to promote diversification in traditional and 
non-traditional products and markets.   
 
Jordan's export markets were depressingly affected by the 1991 and 2003 gulf wars, and 
SMEs were deprived from attaining wide-reaching ec onomic state, added to this, the increase in oil 
prices that have rocked up in the last two years and which has changed the prices of energy resources 
thus increasing the cost of outputs, all of which has been reflected in slower activity of the small and 
medium enterprises who are already facing moun ting competitive pressures as a result of trade 
liberalization and of the significant effects of the prevailing political situations in the Middle East.    
The programme was necessary in the year 2007 in order to ensure the sustainability of the 
domestic industry's performance and to  improve its export potential.   
 
4. Background and authority for the subsidy
 
 
(a) Background 
 
The programme was established in 1995, exempting profits gained from exporting activities 
in a trial to remedy the harmful effects of the econom ical and social factors that affected Jordan by 
opening up the economy in light of the mentioned political circumstances.  98 per cent of the 
domestic exporting industrial companies which were of  small-sized nature, suffered from the lack of 
market accessibility, obstructing them by such from reaching economies of scale, which led to higher 
costs of production and hence limiting their competition capabilities in global markets.   
  (b) The Authority Responsible 
 
The Income Tax Department / Ministry of finance.   
  (c) Legislation 
 
 The concerned legislation is "Income Tax Law No. 25 for the year 2001 amending Income 
Tax Law No. 57 for the Year 1985".     The only related provision in the Law menti oned above in connection with the Exemption 
from Income Tax is Article 3(c) of the same which is translated as follows:   
 
"(c) Income earned from exports or re-e xports shall be deemed to have been 
generated in the Kingdom, and the Council of Ministers, may upon the recommendation of the Minister, exempts from the tax wholly or partially the net 
income earned from certain types of local production for exportation."    G/SCM/N/155/JOR/Suppl.1 
 G/SCM/N/177/JOR 
 Page 3 
 
 
   The other matter related to the subject is the decision of the Council of Ministers No. 3394 for 
the year 1994, which excludes some exports from be nefiting from this Law.  The translation of the 
Decision is as follows:    
"Based on Article 3(c) of the Income Tax Law No. 57 the following exports are not 
entitled to the exemption mentioned therein:   
 
• Potash & fertilizers exports; 
• Phosphate exports; and 
• Exports subject to Protocol Trade." 
 
5. Form of the subsidy (i.e. gr ant, loan, tax concession, etc.)
 
 
Tax concession.   
 6. To whom and how the subsidy is provided (w hether to producers, to exporters, or others; 
 
through what mechanism;  whether a fixed or fluctuating amount per unit;  if the latter, how 
determined)  
  (a) To whom and how the subsidy is provided  
 Domestic industrial companies are entitled to benefit from this program in addition to 
domestic exporting companies specialized in expor ting local goods and products.  Large enterprises 
exporting phosphate, potash and fertilizers that account  for about 70 per cent of the country's exports 
are not entitled to beneficiaries of this programme.    
Exemptions are granted through submitting official  documents to the income tax department, 
verifying the amount of profit resulting of exports activities.   
 
(b) Amount  
  The amount of exemption is determined accordi ng to the imputed percentage of net profits 
resulting from export activities.  The normal income ta x to be paid in absence of the programme, is an 
average of 15 per cent or less on the profits generate d from all operations irrespective of the nature of 
sales.   
 7. Subsidy per unit or in cases where this is not possible, the total amount or the annual amount 
budgeted for that subsidy (indicating, if possi ble, the average subsidy per unit for the 
preceding year).  Where provision of per unit subs idy information (for the year covered by the 
notification, the previous year, or both) is not possible, a full explanation  
 
The normal income tax to be paid in absence of  the programme, is an average of 15 per cent 
or less on the profits generated from all operations  irrespective of the nature of sales and hence 
subsidy per unit amounts to 1.5 per cent or less for each Jordanian Dinar.   
 8. Duration of the subsidy and/or any other time limits attached to it, including date of 
inception/commencement  
  This programme has been in effect since the year 1995.    G/SCM/N/155/JOR/Suppl.1 
G/SCM/N/177/JOR Page 4 
 
 
  9. Statistical data permitting an assessment of the trade effects of the subsidy.  The specific 
nature and scope of such data is left to the judgment of the notifying Member.  To the extent 
possible, relevant and/or determinable, however, it is desirable that such information include 
statistics of production, consumption, imports and exports of the subsidized product(s) or 
sector(s) :   
 
Trade effects 
 
 In the year 2007, the value of exports entitled for exemption was US$533,965,829.45 while the approximate calculated value of exemption amounted for US$8,009,487.44.  This figure gives us an indicator that the programme is still imperative in  endorsing beneficiaries' efforts to explore further 
export opportunities.    
As a matter of fact the total amount of exemption of US$8,009,487.44 constitutes just only 
0.14 per cent of Jordan's national exports.  This impli es that the income tax relief still has a very slight 
effect on Jordan's international trade, and realizi ng that Jordan is a developing country with a share 
not greater than 0.10 per cent of world's export trade, it is clear that no harmful effects have been introduced on the international trade as a result of the subsidy programme.   
 
(a) For the three most recent years fo r which statistics are available;   
(b) For a previous representative year, which, where possible and meaningful, should be 
the latest year preceding the introduction of the subsidy or preceding the last major 
change in the subsidy.   
 
Income Tax 
Relief in US$ Total Exports 
Value in US$ Total Exports Value 
benefiting from this 
programme in US$ Income Tax Relief 
in US$ 
2004  US$3.95 b US$76,682,351. US$1,150,235 
2005  US$4.3 b US$70,753,276 US$1,061,299 
2006  US$4.8 b US$2,148,014,729.00. US$32,220,220.94 
 
  G/SCM/N/155/JOR/Suppl.1 
 G/SCM/N/177/JOR 
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  Table 1-Income Tax Relief under Law No. 57 of 1985, as amended  
Classified by HS Chapters in US$ for the year 2007  
 Total Exports Value:   US$5.7 b 
Total Exports Value benefiting from this programme:   US$533,965,829.45 
Income Tax Relief:   US$8,009,487.44 
 
Income tax relief Export Value Chapters 
35,791.13 2,386,075.11 10-13 
32,812.37 2,187,491.18 15 
1,469,455.80 97,963,720.18 16-24 
242,727.28 16,181,818.44 25 
52,414.23 3,494,282.08 27 
130,840.32 8,722,688.13 28-30 
302,897.99 20,193,199.21 32-35 
34,702.46 2,313,497.11 37-38 
351,345.02 23,423,001.55 39-40 
296.48 19,765.64 42-43 
12,275.18 818,345.33 44 
161,173.74 10,744,916.00 47-49 
2,295.72 153,048.14 50-51 
4,126.34 275,089.65 54-56 
4,069,216.73 271,281,115.35 58-63 
1,820.20 121,346.89 64 
142,647.73 9,509,848.93 68-70 
1,380.77 92,051.39 71 
456,885.28 30,459,018.78 72-76 
487.08 32,472.12 80 
8,862.77 590,851.33 82-83 
307,710.48 20,514,032.19 84-85 
3,954.89 263,659.47 86-87 
3,238.46 215,897.22 90-91 
133,508.79 8,900,585.91 94 
6,342.65 422,843.43 96 
40,277.53 2,685,168.71 98 
8,009,487.44 533,965,829.45 Total 
 
 
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