US ignored as Sevilla ‘financing for development’ outcome is adopted by consensus

Notable progress on international tax and transparency principles but EU, UK water down ambition and block negotiations of urgently-needed debt convention

The Tax Justice Network welcomes the agreement reached by countries of the world at the United Nations on the Compromiso de Sevilla, the outcome document for the Fourth Financing for Development summit which will be hosted by Spain in two weeks’ time.¹ After months attempting to block progress, the United States gave up and withdrew, leaving the countries of the world to agree the closely negotiated text by absolute consensus, without the need for a vote. Many countries’ delegates referenced the success of multilateralism in their remarks.

The agreed text sets out a range of important elements for the international policy agenda on tax and transparency (these are summarised below). The G77+China group of countries has once again shown important leadership in a range of areas, and summarised the outcome as ‘a modest step forward’. But they also expressed disappointment, which must relate to the efforts of the EU, UK and other rich countries. Despite standing up to pressure from the United States to undermine the whole agreement, these countries also sought to weaken the ambition themselves.

The European Union, together with Australia, Canada, Japan, New Zealand, Switzerland and the UK, sabotaged efforts to tackle urgently the unsustainable levels of national debt faced by many Global South countries. Rather than immediately commencing the negotiation of a binding legal instrument, the final document agrees only to a process of dialogue ‘with a view to make recommendations for closing gaps in the debt architecture and exploring options to address debt sustainability’.²

Liz Nelson, Tax Justice Network director of advocacy and research, said:

“This cruel and unnecessary positioning by a small group of wealthy nations, dramatically delaying the establishment of a UN convention on debt, will exact a devastating human toll on people across the global South. The strangling of fiscal space by unsustainable and often illegitimate debt, just as the pressures of the climate crisis are laying waste to human rights in those same countries, could not be more urgent – but the EU, UK and their allies have delivered a talking shop instead of action.

“We can still celebrate that the Trump administration’s efforts to overthrow the entire process have been roundly defeated. The Compromiso de Sevilla maintains the possibility of a safety net for people the world over who are harmed by poverty, disease, and discrimination, and more optimistically offers the opportunity for human development and wellbeing for everyone in the world.  We rebuke the EU, UK and others for their weakening of the FfD4 outcomes. But it is significant that the world has collectively rejected the United States’ attempts to lead all nations towards a more brutish, nasty existence by demolishing our progressive commitments to one another.”

On international tax matters, the outcome document makes important new commitments in a range of areas. The commitments ‘to ensure that international tax cooperation is fully inclusive and effective, and beneficial to all’, and ‘to engage constructively in the negotiations on a United Nations Framework Convention on International Tax Cooperation’, confirms the re-establishment of the UN as the global forum for tax. The era of the OECD, a group of rich countries, setting international tax rules for all is firmly over.³

At the level of tax principles, ‘Governments will make sure that’ multinational companies are taxed ‘where economic activity occurs’. This is a core principle for the negotiations of the UN tax convention to build upon, ensuring that international tax rules are based not on the anachronistic arm’s length approach but instead upon the unitary approach which apportions taxing rights between countries according to the location of companies’ real economic activity.⁴

The FfD4 outcome document also makes important commitments in respect of international transparency and cooperation, which the UN tax convention will again be the vehicle to deliver. These include an effective commitment to ensure all countries – and not only OECD members – can be full participants in the benefits of information exchange.⁵ They also countenance the creation of two major public goods:

• ‘a central public database for country-by-country reports’ so that every multinational can be held accountable for any divergence between the location of their real activity and where profits are declared and tax paid;⁶ and
• ‘a global beneficial ownership registry’, which could bring together beneficial ownership information from multiple sources, providing a combination of public data and private information accessible to authorities, to combat the anonymous ownership which is at the heart of most crossborder corruption and offshore tax abuse by wealthy individuals.

Sergio Chaparro, Tax Justice Network’s international policy and advocacy lead, said:

“It’s disappointing that the EU and UK have failed to pursue the best interests of their own people here, or to meet their own global development commitments. It’s welcome that they have broken with the damaging stance of the United States, but they must do better – above all, in coming to the table for the negotiations of the UN tax convention with ambitious proposals to fight cross-border tax abuse and strengthen countries’ taxing rights, including their own.

“These commitments move the global tax justice agenda forward, once again. They provide a clear path for the negotiators of the UN tax convention to deliver fully on the international transparency and cooperation that is needed to defeat the cross-border tax abuse that costs the world half a trillion dollars each year.”

-ENDS-

Notes to Editor

1. The Fourth Financing for Development summit will take place in Sevilla, Spain, from 30 June to 3 July 2025. Further details can be found here. The first Financing for Development summit took place in 2001, in Monterrey, while the third and most recent was held in Addis Ababa in 2015. The outcome document for the Fourth FfD summit has been negotiated over the last year, with the vote coming today. The latest updates on the process can be found here. The outcome document for the Fourth Financing for Development summit, as approved by consensus, can be found here.
2. Earlier iterations of the text had carried the proposal, backed by the G77 group of countries and by international civil society, to begin the negotiation of a UN convention on debt, in order to move swiftly to a legally binding means to restructure unsustainable debts. The delay and dilution of this commitment will leave many countries and their peoples facing needless fiscal crises.
3. The OECD’s failings are surveyed in the report, ‘Litany of failure: the OECD’s stewardship of international taxation’, produced by Tax Justice Network in collaboration with the Center for Economic and Social Rights, Centro de Estudios Legales y Sociales (CELS), the Economic Policy Working Group at ESCR-Net, the Global Network of Movement Lawyers at Movement Law Lab, the Government Revenue and Development Estimations project (University of St Andrews/University of Leicester), Minority Rights Group, Tax Justice Network-Africa, and Steven Dean, Professor of Law, Boston University School of Law, which can be found here.
4. Unitary taxation requires a multinational corporation’s profits to be divvied up across the countries where it does business, so that each can tax their fair share. This makes tax havens redundant since multinational corporations don’t do real business in tax havens. More information about unitary tax is available here.
5. Automatic exchange of information prevents corporations and individuals from abusing bank accounts they hold abroad to hide the true value of their wealth and pay less tax than they should at home. More information is available here.
6. Public country by country reporting is an accounting practice designed to expose a multinational corporation whenever it shifts its profit into tax havens to pay less tax than it should. More information is available here.