./.RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/Q2/THA/9
3 August 1999
(99-3268)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Questions from the UNITED STATES Regarding the
New and Full Notification of THAILAND1
The following communication, dated 2 August 1999, has been received from the Permanent
Mission of the United States.
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The following are questions regarding the notification of Thailand made pursuant to
Article XVI:1 of the GATT 1994 and Article 25 of the Agreement on Subsidies and Countervailing
Measures, in document G/SCM/N/38/THA.
1. The United States is aware of a number of programmes which do not appear to be included in
Thailand’s notification.  Please provide information on these programmes according to the
agreed notification format, or explain why the programmes were not notified.
· Exemptions from VAT Under Section 21(4) of the VAT Act :  Prior to 1992,
sections 28 and 30 of the Invest Promotion Act enabled the Board of Investment to
exempt promoted companies from business and local taxes in addition to exemptions
from payment of import duties.  In 1992, this system was replaced by a VAT system.
Under Section 21(4) of the VAT act, the exemption from business and local taxes was
replaced by a VAT exemption for the designated companies.
· Import Duty Exemptions for Industrial Estates : The Industrial Estates Authority
of Thailand Act (IEAT) allows firms located in “industrial estates” designated by this
Act to receive tax and duty exemptions for machinery used for factory construction
and operation, and on raw materials and other inputs.
· Export Processing Zone Incentives :  Many estates under the Industrial Estates
Authority of Thailand Act (IEAT) contain Export Processing Zones (EPZ) that
provide incentives beyond those conferred by IEAT status to companies located in
such zones and which export a minimum percentage of their production.  Such
incentives include an exemption from export duties on products/by-products and anexemption/refund of import taxes on any goods sent into the EPZ, regardless of
whether they are incorporated into the end product.
· Tax Certificates for Export :  Under the Tax and Duty Compensation of Exported
Goods Produced in the Kingdom Act, the Ro yal Thai Government issues to exporters
                                                     
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Page 2
transferable certificates that rebate indirect taxes and import duties levied on imports
used to produce exports.
· Trust Receipt Financing for Raw Materials :  The Thai EXIM Bank has provided
$250 million in financing for exporters to buy raw materials under a “Trust Receipt
Financing” plan at loan rates of 10 per cent.
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