WORLD TRADE
ORGANIZATIONG/SCM/N/48/CRI
G/SCM/N/60/CRI
21 July 2000
(00-3016)
Committee on Subsidies
and Countervailing MeasuresOriginal:  Spanish
SUBSIDIES
Updating Notifications Pursuant to Article XVI:1 of the
GATT 1994 and Article 25 of the SCM Agreement
COSTA RICA
The following communication, dated 17 July 2000, has been received from the Permanent
Mission of Costa Rica.
_______________
1999 Notification
A. G RANTING OF TAX CREDIT CERTIFICATES
1. Description of subsidy
The Tax Credit Certificate (CAT) is a subsidy granted solely to enterprises that signed an
export contract before 2 December 1992 and which, through an addendum to this contract, received a
reduction of 30 per cent of the amount of the Certificate prior to 1996, calculated on the basis of the
f.o.b. value of the exports.
CATs granted to enterprises that meet the two criteria set out in the preceding paragraph give
the right to the following:
(a) A CAT of 10.5 per cent when the product exported includes 35 to 50.50 per cent of
national content and is exported to third markets;
(b) a CAT of 14 per cent when the product exported has 50.51 per cent or more of
national content and is exported to third markets other than the United States and
Puerto Rico.
CATs are freely negotiable non-interest bonds valid for 24 months after the date of maturity.
They are issued by the Central Bank of Costa Rica in national currency and are used to pay direct or
indirect taxes collected by the Central Bank as the State Treasurer.
2. Period of notification
Updating of the notification to 30 June 1999.G/SCM/N/48/CRI
G/SCM/N/60/CRI
Page 2
3. Policy objective
No change.
4. Background and authority
No change.
5. Form of the subsidy
No change.
6. Beneficiaries and mechanism
No change.
7. Estimated amount of the subsidy
CATs granted to enterprises that meet the two criteria set out in paragraph 1 give the right to
the following:
(a) A CAT of 10.5 per cent when the product exported includes 35 to 50.50 per cent of
national content and is exported to third markets;
(b) a CAT of 14 per cent when the product exported has 50.51 per cent or more of
national content and is exported to third markets other than the United States or
Puerto Rico.
An estimate has been made of the amount lost to  Costa Rica's budget as a result of the CATs,
based on the number of CATs granted in previous years which will mature during the period coveredby the estimate.
8. Duration of the subsidy
Tax Credit Certificates (CATs) end in 1999.  For some firms, the date of expiry was
30 September 1999, when the ordinary fiscal period for 1999 ended.  The tax authorities authorized
special fiscal periods for other firms and their date of expiry was when these periods ended.  The
special fiscal period ended on 31 December 1999.
In other words, these exemptions ended at the latest on 31 December 1999.
9. Trade effects of the subsidy
No specific studies have been carried out to determine the direct impact of the subsidy on
growth in exports.  Nevertheless, it should be noted that the export sector is one of the most vigorous
sectors of Costa Rica's economy, mainly due to sales of non-traditional products to third markets.  The
share of non-traditional exports in total exports rose from 33.8 per cent in 1986 to 79.3 per cent in
1998, underlining the importance of the trend in the export sector towards this type of product.G/SCM/N/48/CRI
G/SCM/N/60/CRI
Page 3
B. EXEMPTIONS AND OTHER INCENTIVES GIVEN TO ENTERPRISES EXPORTING NON -TRADITIONAL
PRODUCTS TO THIRD MARKETS WHICH SIGNED AN EXPORT CONTRACT BEFORE
30 SEPTEMBER  1996 AND, PRIOR TO THAT , REQUESTED EXTENSION OF THE CONTRACT
Exemption covers the payment of any taxes or fees, sales and consumption tax on imports or
local purchase of raw materials, processed or semi-processed products, components and parts,wrapping materials and packaging, as well as other materials and goods necessary for the functioning
of the beneficiary enterprise or used as a component in the products exported.
These exemptions end in 1999.  For some firms, the date of expiry was 30 September 1999,
when the ordinary fiscal period for 1999 ended.  The tax authorities authorized special fiscal periods
for other firms and their date of expiry was when these periods ended.  The special fiscal period ended
on 31 December 1999.
All the exemptions granted under this programme ended at the latest on 31 December 1999.G/SCM/N/48/CRI
G/SCM/N/60/CRI
Page 4
2000 Notification
A. G RANTING OF TAX CREDIT CERTIFICATES
1. Description of subsidy
The Tax Credit Certificate (CAT) is a subsidy granted solely to enterprises that signed an
export contract before 2 December 1992 and which, through an addendum to this contract, received a
reduction of 30 per cent of the amount of the Certificate prior to 1996, calculated on the basis of the
f.o.b. value of the exports.
CATs granted to enterprises that meet the two criteria set out in the preceding paragraph give
the right to the following:
(a) A CAT of 10.5 per cent when the product exported includes 35 to 50.50 per cent of
national content and is exported to third markets;
(b) a CAT of 14 per cent when the product exported has 50.51 per cent or more of
national content and is exported to third markets other than the United States and
Puerto Rico.
CATs are freely negotiable non-interest bonds valid for 24 months after the date of maturity.
They are issued by the Central Bank of Costa Rica in national currency and are used to pay direct or
indirect taxes collected by the Central Bank as the State Treasurer.
2. Period of notification
Updating of the notification to 30 June 2000.
3. Policy objective
No change.
4. Background and authority
No change.
5. Form of the subsidy
No change.
6. Beneficiaries and mechanism
No change.
7. Estimated amount of the subsidy
CATs granted to enterprises that meet the two criteria set out in paragraph 1 give the right to
the following:
(a) A CAT of 10.5 per cent when the product exported includes 35 to 50.50 per cent of
national content and is exported to third markets;G/SCM/N/48/CRI
G/SCM/N/60/CRI
Page 5
(b) a CAT of 14 per cent when the product exported has 50.51 per cent or more of
national content and is exported to third markets other than the United States or
Puerto Rico.
An estimate has been made of the amount lost to  Costa Rica's budget as a result of the CATs,
based on the number of CATs granted in previous years which will mature during the period covered
by the estimate.
8. Duration of the subsidy
Tax Credit Certificates (CATs) ended in 1999.  For some firms, the date of expiry was
30 September 1999, when the ordinary fiscal period for 1999 ended.  The tax authorities authorized
special fiscal periods for other firms and their date of expiry was when these periods ended.  Thespecial fiscal period ended on 31 December 1999.
In other words, these exemptions ended at the latest on 31 December 1999.
9. Trade effects of the subsidy
No specific studies have been carried out to determine the direct impact of the subsidy on
growth in exports.  Nevertheless, it should be noted that the export sector is one of the most vigorous
sectors of Costa Rica's economy, mainly due to sales of non-traditional products to third markets.  The
share of non-traditional exports in total exports rose from 33.8 per cent in 1986 to 85.2 per cent
in 1999, underlining the importance of the trend in the export sector towards this type of product.
B. EXEMPTIONS AND OTHER INCENTIVES GIVEN TO ENTERPRISES EXPORTING NON -TRADITIONAL
PRODUCTS TO THIRD MARKETS WHICH SIGNED AN EXPORT CONTRACT BEFORE
30 SEPTEMBER  1996 AND, PRIOR TO THAT , REQUESTED EXTENSION OF THE CONTRACT
Exemption covers the payment of any taxes or fees, sales and consumption tax on imports or
local purchase of raw materials, processed or semi-processed products, components and parts,
wrapping materials and packaging, as well as other materials and goods necessary for the functioning
of the beneficiary enterprise or used as a component in the products exported.
Like the Tax Credit Certificates (CATs), these exemptions ended in 1999. For some firms, the
date of expiry was 30 September 1999, when the ordinary fiscal period for 1999 ended.  The tax
authorities authorized special fiscal periods for other firms and their date of expiry was when theseperiods ended.  The special fiscal period ended on 31 December 1999.
In other words, all the exemptions granted under this programme ended at the latest on
31 December 1999.
__________