Sweden is in some partner countries claiming tax exemptions, regarding VAT and import duties, with respect to ODA projects. Tax exemptions were a standard clause in procedural agreements signed at the country level until 2011.

Since 2011 Sweden is generally not claiming tax emptions in new or renewed procedural agreements.

However, the situation regarding e.g. corruption, violations of human rights or ongoing conflicts is taken into consideration in these decisions.

Sweden has not decided on a list of countries where we keep on claiming tax exemptions or on a universal approach. Regarding feedback from the implementers, our experience is that the financial implications from not claiming tax exemptions are relatively small. Sweden’s missions abroad have so far not tended to signal any urgency with respect to signing- or renewing procedural agreements on the basis of tax exemptions.

In the case of a new- or renewed procedural agreement, a decision to claim tax exemptions is likely to involve both Sida and the Ministry of Foreign Affairs.

According to generally accepted practice, humanitarian aid is exempt from tax and customs duties and is not affected in Swedish procedural and other agreements with partner countries.

Sweden will also take into account guidelines by the UN Subcommittee on Tax Treatment of ODA (ECOSOC) when deciding on future tax arrangements with partner countries.

Most recent review: 2018

In 2018 the Swedish International Development Cooperation Agency (Sida) finished an internal document with guidelines on situations where tax exemptions are still to be sought:

1. In the case of high- or very high levels of corruption, as tax revenues would then have a high risk of being used for personal gain or in other unintended ways,
2. In the case of serious restrictions on democracy, human rights and/or violations of international law. This includes states where the rule of law is regularly violated. It can also be a matter of situations where a Swedish unilateral decision to abandon tax exemption gives (significant) unwanted legitimacy to a state with a strong democratic deficit,
3. In states where the host government is involved in an armed conflict as this may be financed from tax revenues.

However, as Sida is often working in countries with a democratic deficit, the above criteria do not automatically lead to tax exemptions being claimed. Rather, high levels of corruptions or serious restrictions on democracy, human rights and/or international law, signals to us that an individual assessment should be made. Cases of armed conflicts precludes state-to-state development cooperation regardless.

Not available.