On 20 July 2026, the Co-Leads of Workstream 3 on the Protocol on the Prevention and Resolution of Tax Disputes, the second early protocol under the upcoming United Nations Framework Convention on International Tax Negotiation (UNFICTC).In this primer, the author provides an first analysis of the draft protocol. The report highlights some of the refinements that can be made to the draft to better achieve its goal of a streamline, inclusive and forward-looking regime for the prevention and resolution of cross-border tax disputes.
The report recommends redrafting the dispute prevention mechanisms in order to retain only the provisions necessary to create a legal ground, while leaving implementation details to flexible competent authority agreements overseen by the Conference of Parties.Regarding the dispute resolution mechanism, the report cautions the transplanting of norms and practices from OECD and EU dispute resolution frameworks, including mandatory binding arbitration. The report also points out critical omissions like measures on MAP transparency in process and decisions made.