Since the beginning of 2016, the Netherlands refrains from asking for tax exemptions for import levies or custom duties and Value Added Tax (VAT) on goods and services provided under all new government-to-government ODA projects and programmes, provided locally through missions, as well as private sector instruments. FMO, the Dutch Entrepreneurial Development Bank, also stopped requesting such tax exemptions. This measure does not apply to emergency and humanitarian aid or income tax. In case of serious deficiencies in the tax structures of the recipient countries, tax exemption from import duties are permissible. Where the Netherlands participate in multi-donor trust funds or co-funding through multilateral organisations, the rules of the trust fund or multilateral organisation apply.

Most recent review: 2021

The Dutch government conducted a policy evaluation on its policies and activities contributing to strengthening tax systems in developing countries, including the treatment of ODA taxation. Further information on the policy evaluation can be found in the “Further Information” section below.

The Netherlands has concluded technical or economic co-operation agreements with a number of partner countries. These agreements establish that the goods and services provided as part of a bilateral project are exempt from customs duties and VAT. Additional administrative agreements are often necessary to arrange the actual exemption for each project.