Regulation (EU) 2016/1037 of the European Parliament and of the CouncilShow full title

(a)

The provision by governments of direct subsidies to a firm or an industry contingent upon export performance.

(b)

Currency retention schemes or any similar practices which involve a bonus on exports.

(c)

Internal transport and freight charges on export shipments, provided or mandated by governments, on terms more favourable than for domestic shipments.

(d)

The provision by governments or their agencies either directly or indirectly through government-mandated schemes, of imported or domestic products or services for use in the production of exported goods, on terms or conditions more favourable than for provision of like or directly competitive products or services for use in the production of goods for domestic consumption, if (in the case of products) such terms or conditions are more favourable than those commercially available(1) on world markets to their exporters.

(e)

The full or partial exemption, remission, or deferral(2) specifically related to exports, of direct taxes(3) or social welfare charges paid or payable by industrial or commercial enterprises.

(f)

The allowance of special deductions directly related to exports or export performance, over and above those granted in respect of production for domestic consumption, in the calculation of the base on which direct taxes are charged.

(g)

The exemption or remission, in respect of the production and distribution of exported products, of indirect taxes(4) in excess of those levied in respect of the production and distribution of like products when sold for domestic consumption.

(h)

The exemption, remission or deferral of prior-stage cumulative indirect taxes(4) on goods or services used in the production of exported products in excess of the exemption, remission or deferral of like prior-stage cumulative indirect taxes on goods or services used in the production of like products when sold for domestic consumption; provided, however, that prior-stage cumulative indirect taxes may be exempted, remitted or deferred on exported products even when not exempted, remitted or deferred on like products when sold for domestic consumption, if the prior-stage cumulative indirect taxes are levied on inputs that are consumed in the production of the exported product (making normal allowance for waste)(5). This item shall be interpreted in accordance with the guidelines on consumption of inputs in the production process contained in Annex II.

(i)

The remission or drawback of import charges(4) in excess of those levied on imported inputs that are consumed in the production of the exported product (making normal allowance for waste); provided, however, that in particular cases a firm may use a quantity of home market inputs equal to, and having the same quality and characteristics as, the imported inputs as a substitute for them in order to benefit from this provision if the import and the corresponding export operations both occur within a reasonable time period, not to exceed two years. This item shall be interpreted in accordance with the guidelines on consumption of inputs in the production process contained in Annex II and the guidelines in the determination of substitution drawback systems as export subsidies contained in Annex III.

(j)

The provision by governments (or special institutions controlled by governments) of export credit guarantee or insurance programmes, of insurance or guarantee programmes against increases in the cost of exported products or of exchange risk programmes, at premium rates which are inadequate to cover the long-term operating costs and losses of the programmes.

(k)

The grant by governments (or special institutions controlled by and/or acting under the authority of governments) of export credits at rates below those which they actually have to pay for the funds so employed (or would have to pay if they borrowed on international capital markets in order to obtain funds of the same maturity and other credit terms and denominated in the same currency as the export credit), or the payment by them of all or part of the costs incurred by exporters or financial institutions in obtaining credits, in so far as they are used to secure a material advantage in the field of export credit terms.

Provided, however, that if a Member of the WTO is a party to an international undertaking on official export credits to which at least 12 original such Members are parties as of 1 January 1979 (or a successor undertaking which has been adopted by those original Members), or if in practice a Member of the WTO applies the interest rates provisions of the relevant undertaking, an export credit practice which is in conformity with those provisions shall not be considered an export subsidy.

(l)

Any other charge on the public account constituting an export subsidy in the sense of Article XVI of the GATT 1994.

(1)

‘Commercially available’ means that the choice between domestic and imported products is unrestricted and depends only on commercial considerations.

(2)

Deferral may not amount to an export subsidy where, for example, appropriate interest charges are collected.

(3)

For the purposes of this Regulation:

• ‘direct taxes’ means taxes on wages, profits, interests, rents, royalties, and all other forms of income, and taxes on the ownership of real property,

• ‘import charges’ means tariffs, duties, and other fiscal charges not elsewhere enumerated in this footnote that are levied on imports,

• ‘indirect taxes’ means sales, excise, turnover, value added, franchise, stamp, transfer, inventory and equipment taxes, border taxes and all taxes other than direct taxes and import charges,

• ‘prior-stage’ indirect taxes are those levied on goods or services used directly or indirectly in making the product,

• ‘cumulative’ indirect taxes are multi-staged taxes levied where there is no mechanism for subsequent crediting of the tax if the goods or services subject to tax at one stage of production are used in a succeeding state of production,

• ‘remission’ of taxes includes the refund or rebate of taxes,

• ‘remission or drawback’ includes the full or partial exemption or deferral of import charges.

(4)

See footnote 2 to point (e).

(5)

Point (h) does not apply to value added tax systems and border-tax adjustment in lieu thereof; the problem of the excessive remission of value added taxes is exclusively covered by point (g).