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European Business Law

The amount of the subsidy is calculated on the basis of the benefit conferred as found to exist and determined for the investigation period (Regulation No 2016/1037, Article 5). The benefit exists only when the subsidy is used. Thus, the benefit arising from a subsidy scheme in the form of a credit granted when exporting a finished product, and used to offset the applicable customs duties at the t …

Basis of calculation

The amount of the subsidy is calculated on the basis of the benefit conferred as found to exist and determined for the investigation period (Regulation No 2016/1037, Article 5). The benefit exists only when the subsidy is used. Thus, the benefit arising from a subsidy scheme in the form of a credit granted when exporting a finished product, and used to offset the applicable customs duties at the time of the subsequent imports of inputs used in the production of that product only exists when the credit is actually used . On the other hand, the benefit may be calculated on the basis of the sum of the credits earned and not on the mere credits utilized where it results from a duty entitlement passbook scheme on post-export basis, and the time when the benefit is earned corresponds to that of the export transaction .

The calculation basis differs depending on the nature of the subsidy. In guidelines for the calculation of the amount of subsidy , the Commission gives examples of calculation for the main types of subsidies .

The amount of the subsidy in the form of grant corresponds to the total amount of the grant corrected for any differences between the point in time of its receipt and the investigation period. Since non-repayable grants are not available commercially, the calculation of the benefit conferred upon the recipient of a subsidy implies that an interest on the nominal subsidy amount is added , which generally corresponds to the average commercial interest rate applied in the investigation period . Where the grant is allocated over a longer period, the interest will also be applied on a longer period. The concept of grant must be understood in the broad sense as including subsidies granted in the form of a transfer or foregoing of revenues equivalent to a grant, such as income tax or duty exemption, tax rebates (including import duties, social security contributions and redundancy payments), forgiveness of debt, accelerated depreciation, interest rate subsidies, money saved from preferential provision of goods and services or gained from excessive prices for the purchase of goods .

The amount of the subsidy does not in this case correspond to the total sum lent, but to the amount of the interest that the borrower would pay for a comparable commercial loan , defined by the guidelines as loan of a similar repayment period with a similar amount obtainable by the recipient from a representative private bank operating on the domestic market .

Having initially considered that the amount of the subsidy corresponded to the principal amount of the loan and more precisely its nominal value allocated over the normal life of the assets, as from the date on which the non-repayment has been established , the Council - which at the time shared implementing powers in matters relating to anti-subsidies with the Commission - endorsed the observations of a WTO panel. According to the latter, a loan, a loan guarantee and a debt-to-equity swap that requires the recipient to repay the money or to surrender an ownership share in the company are not the same as a grant, even if the provider of the financial contribution does not expect to see his money back. Subsidy is not about the cost to the provider of the financial contribution, it is about the benefit to the recipient. However, for that recipient, a loan has a different value than a grant as it involves a debt that is owned to a third party and will appear as such in the company's balance sheet. Likewise, the issuance of new equity, directly or through a debt-to-equity swap dilutes the ownership claims of existing shareholders. To assess the existence of a benefit, it is the perspective of the recipient that is important, not that of the provider of the financial contribution. The starting point initially adopted by the Council in the calculation of the amount of benefit was thus erroneous as it focused on the expectation of the provider of the funds to see his money back . Reverting over its position, the Council thus specified that the subsidy granted in the form of a refinancing of debt to an undertaking in difficulty is calculated as a loan for the purposes of the calculation of the benefit and the amount of the arising benefit for an undertaking in difficulty of the debt-to-equity swap corresponds to the total amount of the swap, where it may be taken for the debt extinction .

Council Regulation (EU) No 2450/98 of 13 November 1998, imports of stainless steel bars (India), LawLex200900002490JBJ; No 1601/1999 of 12 July 1999, imports of stainless steel wires (India, Korea), LawLex200900002507JBJ.

Council Regulation (EU) No 1628/2004 of 13 September 2004, imports of certain graphite electrode systems (India), LawLex200900002516JBJ.

WTO, Report of the panel No WT/DS299/R adopted on 3 August 2005, paragraph 7.212.

Council Regulation (EU) No 320/2008 of 7 April 2008, imports of certain electronic microcircuits known as DRAMs (Korea), LawLex200900002485JBJ.

Commission Guidelines No 98/C 394/04 of 17 December 1998 for the calculation of the amount of subsidy in countervailing duty investigations, OJ C 394 of 17 December 1998, 6.

For example, subsidies in the form of loan guarantees (c), provision of goods and services by the government (d), purchases of goods by government (e) and government provision of equity capital (f); See Commission Guidelines No 98/C 394/04 of 17 December 1998 for the calculation of the amount of subsidy in countervailing duty investigations, OJ C 394 of 17 December 1998, 6, E.

Council Regulation (EU) No 2597/1999 of 6 December 1999, imports of polyethylene terephthalate (PET) film (India), LawLex200900002518JBJ.

See, for example, Commission Regulation No 1092/2000 of 24 May 2000, imports of styrene-butadiene-styrene thermoplastic rubber (Taiwan), LawLex200900002871JBJ, which considers that the amount of the subsidy granted in the form of exemption from import duties, is equal to the amount of those duties allocated over the normal service life of the imported machinery in the industry concerned, i.e. eight years, adding the average commercial interest rate applied during the investigation period.

Commission Guidelines No 98/C 394/04 of 17 December 1998 for the calculation of the amount of subsidy in countervailing duty investigations, OJ C 394 of 17 December 1998, 6, E, a).

Commission Guidelines No 98/C 394/04 of 17 December 1998, see above.

See, also, Council Regulation (EU) No 1010/2008 of 13 October 2008, imports of sulphanilic acid (China, India), LawLex200900002481JBJ, which considers, as regards a subsidy in the form of a deferred loan repayment, that the benefit is considered equivalent to an interest-free loan granted for a period corresponding to the difference between the actual repayment period and the repayment period of a comparable commercial loan.

Council Regulation (EU) No 1480/2003 of 11 August 2003, imports of certain electronic microcircuits known as DRAMs (Korea), LawLex200900002542JBJ, which relies on Article E(b)(viii) of the Guidelines No 98/C 384/04 which recommends an amount of subsidy equal to the amount of the grant, minus any repayments.

European Business Law

494. Basis of calculation

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494. Basis of calculation

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise