The Spanish Ministry of Foreign Affairs and AECID (Development Cooperation Agency) do not yet have a general policy in regards to exemptions for ODA taxation. The Ministry is in the process of developing it after launching a pilot study to analyse current practices in our development co-operation.
At present, there is not sufficient information to assess the current coverage of the exemptions that are being requested and for this reason it has been decided to carry out the transparency exercise (pilot study).
Spain and the Spanish cooperation, as a general principle, are favourable not to claim tax exemptions on ODA projects based on the priorities of the UN guidance on tax exemptions for ODA projects (e.g. start with VAT and custom duties).
The future Spanish policy on tax exemptions will take into account the evolution of the EU position on the issue. The EU has taken an important step in the direction of eliminating certain exemptions. For example, the new post-Cotonou framework does not include the Most Favoured Nation (MFN) provision that required any tax agreement or exemption that one partner country offered to another (donor) country be extended to all other countries. Spain values this as a step forward for the countries covered by this framework.