UN tax convention

From the zero-draft text prepared by the Co-Lead.

Article 1
Objectives

The objectives of this Convention are to:

(a) Establish fully inclusive and effective international tax cooperation in terms of substance and process;

(b) Establish a system of governance for international tax cooperation capable of responding to existing and future tax and tax-related challenges on an ongoing basis;

(c) Establish an inclusive, fair, transparent, efficient, equitable, and effective
international tax system for sustainable development, with a view to enhancing the legitimacy, certainty, resilience, and fairness of international tax rules, while addressing challenges to strengthening domestic resource mobilization.

From the Terms of Reference adopted by the UN:

Objectives

7. A United Nations framework convention on international tax cooperation should include a clear statement of its objectives. In that regard, it should:

(a) Establish fully inclusive and effective international tax cooperation in terms of substance and process;

(b) Establish a system of governance for international tax cooperation capable of responding to existing and future tax and tax-related challenges on an ongoing
basis;

(c) Establish an inclusive, fair, transparent, efficient, equitable and effective international tax system for sustainable development, with a view to enhancing the
legitimacy, certainty, resilience and fairness of international tax rules, while addressing challenges to strengthening domestic resource mobilization.

From the zero-draft text prepared by the Co-Lead.

Article 2
Principles

The present Framework Convention shall be guided by the following general principles:

(a) Universality in approach and scope, fully considering the different needs, priorities, and capacities of all countries, including developing countries, in particular countries in special situations;
(b) Recognition that every Member State has the sovereign right to decide its tax policies and practices, while also respecting the sovereignty of other Member States in such matters;
(c) Alignment, in the pursuit of international tax cooperation, with States’ obligations under international human rights law;
(d) A holistic, sustainable development perspective that covers in a balanced and integrated manner economic, social and environmental policy aspects;
(e) Sufficiently flexible, resilient and agile approaches to ensure equitable and effective results as societies, technology and business models and the international tax cooperation landscapes evolve;
(f) Contributing to achieving sustainable development by ensuring fairness in allocation of taxing rights under the international tax system;
(g) Providing for rules that are as simple and easy to administer as the subject matter allows;
(h) Ensuring certainty for taxpayers and governments;
(i) Requiring transparency and accountability of all taxpayers.

From the Terms of Reference adopted by the UN:

Principles

8. A United Nations framework convention on international tax cooperation should include a clear statement of the principles that guide the achievement of its objectives.

9. Efforts to achieve the objectives of the framework convention therefore should:

(a) Be universal in approach and scope and should fully consider the different needs, priorities, and capacities of all countries, including developing countries, in particular countries in special situations;

(b) Recognize that every Member State has the sovereign right to decide its tax policies and practices, while also respecting the sovereignty of other Member States in such matters;

(c) Be aligned, in the pursuit of international tax cooperation, with States’ obligations under international human rights law;

(d) Take a holistic, sustainable development perspective that covers in a balanced and integrated manner economic, social and environmental policy aspects;

(e) Be sufficiently flexible, resilient and agile to ensure equitable and effective results as societies, technology and business models and the international tax cooperation landscapes evolve;

(f) Contribute to achieving sustainable development by ensuring fairness in allocation of taxing rights under the international tax system;

(g) Provide for rules that are as simple and easy to administer as the subject matter allows;

(h) Ensure certainty for taxpayers and governments;

(i) Require transparency and accountability of all taxpayers

From the zero-draft text prepared by the Co-Lead.

Article 3
Definitions

For the purposes of this Convention, unless otherwise specified,

(1) the term “competent authorities” means the persons or authorities authorized to perform functions specified in this Convention under procedures to be established by the Conference of the Parties;

(2) the term “tax-related illicit financial flow” means a financial flow that is illicit in origin, transfer or use, that reflects an exchange of value and that crosses country borders (an “illicit financial flow”) where the principal purpose, or one of the principal purposes of such flow, is the avoidance or evasion of a legitimate government revenue claim. It does not include illicit financial flows that consist primarily of non-tax crimes (e.g., trafficking or smuggling) even if the crime would also give rise to a revenue claim;

[additional definitions as needed]

From the zero-draft text prepared by the Co-Lead:

Article 10
Mutual Administrative Assistance

1. States Parties shall cooperate to promote mutual administrative assistance in tax matters to facilitate the administration of taxes, combat tax evasion and avoidance and support domestic resource mobilization, including through:
(a) exchange of information;
(b) assistance in tax collection;
(c) simultaneous tax examination;
(d) tax examination abroad;
(e) service of documents; and
(f) any other form of mutual administrative assistance as may be agreed by the States Parties from time to time;

in each case, under procedures to be specified in future protocols or other instruments.

2. The States Parties shall identify barriers to effective mutual administrative assistance in tax matters and cooperate to eliminate them if and as appropriate

From the Terms of Reference adopted by the UN:

Commitments

10. The framework convention should include commitments to achieve its objectives. Commitments on the following subjects, inter alia, should be:

(a) Fair allocation of taxing rights, including equitable taxation of multinational enterprises;

(b) Addressing tax evasion and avoidance by high-net worth individuals and ensuring their effective taxation in relevant Member States;

(c) International tax cooperation approaches that will contribute to the achievement of sustainable development in its three dimensions, economic, social and environmental, in a balanced and integrated manner;

(d) Effective mutual administrative assistance in tax matters, including with respect to transparency and exchange of information for tax purposes;

(e) Addressing tax-related illicit financial flows, tax avoidance, tax evasion and harmful tax practices;

(f) Effective prevention and resolution of tax disputes

Zero draft text 

The text of the commitment on mutual administrative assistance in the draft convention read as follows: 

“1. States Parties shall cooperate to promote mutual administrative assistance in tax matters to facilitate the administration of taxes, combat tax evasion and avoidance and support domestic resource mobilization, including through:  

(a) exchange of information;  

(b) assistance in tax collection;  

(c) simultaneous tax examination;  

(d) tax examination abroad;  

(e) service of documents; and  

(f) any other form of mutual administrative assistance as may be agreed by the States Parties from time to time;  

in each case, under procedures to be specified in future protocols or other instruments.  

2. The States Parties shall identify barriers to effective mutual administrative assistance in tax matters and cooperate to eliminate them if and as appropriate.” 

Floor discussion 

Textual changes throughout 

India broadly agreed with the draft text of the article, although it wondered what exactly was meant with “other instruments” besides protocols that would serve to specify the procedures for administrative assistance in line with the article. India also wondered whether all items in the list in the first paragraph, as concepts like ‘simultaneous tax examinations’ and ‘tax examinations abroad’ have been dealt with separately in the dispute resolution protocol. 

Zambia and the African Group also supported the current draft of the article, although these countries believed the first paragraph could be made stronger by saying that state parties “shall promote” rather than “shall cooperate to promote” administrative assistance. With regard to the “other instruments”, Zambia suggested to include language on the development of guidance or additional instruments that may be necessary for the effective implementation of the protocol. 

Belgium, Austria and South Korea suggested to change the terms “shall cooperate to promote” into “shall cooperate to enhance”, just to show recognize the relevance of existing frameworks on administrative assistance and avoid duplication. 

Kenya believed the conditional terms of “if and as appropriate” in the second paragraph should be deleted. The purpose of the article is to identify and effectively eliminate all barriers to assistance. 

Relationship with existing instruments 

A recurring question raised by countries was the nature of the intended relationship between the draft article and existing instruments like the multilateral Mutual Administrative Assistance Convention (MAAC). The United Kingdom, for example, wondered whether the MAAC was understood as being able to be the realization of the principles expressed in the article. 

Germany believed the text should explicitly recognize that existing instruments like the MAAC already provide comprehensive frameworks for administrative assistance. The article should build upon existing mechanisms rather than establishing parallel legal obligations. 

Senegal noted that point of the article was not to reinvent the wheel. Existing instruments have good components that should be used to build upon. But the point for the article is to identify vacuums, shortcomings of the existing instruments that need to be fleshed out. The point of the Framework Convention is to enforce international tax cooperation and this cannot be achieved if the Convention ignores the matter of administrative assistance.  

Kenya repeated its principled stance that it had also expressed in relation to other commitment articles: the mandate of the negotiation committee is to establish fully inclusive and effective international tax cooperation, a standard which the existing mechanisms and frameworks do not meet because not all UN member countries in the room were involved in their development. Existing mechanisms can be considered, but outright conformity with those mechanisms should therefore not be supported. 

Need for a high-level commitment 

Senegal believed that what was needed for this article to play its role was a high-level commitment, representing the legal basis for implementation. The Senegalese delegate added the implementation should be obligatory because administrative assistance is a fundamental component of the convention. 

The United Kingdom expressed support for the inclusion of high-level principles relating to mutual administrative assistance and transparency. Brazil, too, supported the idea of replacing the list with specific forms of assistance with a general provision for states parties to afford one and another mutual administrative assistance. The specific modalities of cooperation would be developed through protocols or other instruments.  

The idea to keep the article more general was also supported by Sweden, Japan and Switzerland. In the same vein, Russia and a few other countries argued that the list of administrative assistance measures was superfluous. Some countries would likely not adopt all types of assistance measures. Omitting the list would make the article more high-level. Morocco and Austria too, preferred to remove the list, simply to make clear that article is a high-level commitment, and that there is no exhaustive list of mechanisms that could be looked at in future protocols. Morocco added that the current approach of a list and mention of procedures to be inserted in future protocols, seems to indicate that the protocol has operational force, which should not be the case. Protocols should determine both the mechanism to be pursued and the procedures to be followed. 

Germany and Switzerland too, raised concerns regarding the fundamental nature of the article and whether its operational language was undermining the optionality of future protocols. 

Allow reservations or make optional, clarify or delete 

Switzerland noted that expressed concerns regarding the nature of the article, giving rise to obligations on countries to undertake certain types of assistance which it simply cannot live up to under its domestic law. 

For Germany, the need to recognize existing instruments like the MAAC also implied the recognition of the need, in this article, to include reservations and limitations on administrative assistance mechanisms, just like the MAAC allows. Belgium supported the idea of the option to reserve the right to provide assistance in the collection of certain types of taxes. The Belgian delegate challenged the draft convention’s principled stance in its draft article 25 that no reservations should be possible under the convention. 

China, too, believed that the text of the article, as it stands, required the addition of reservation clauses. Otherwise, many countries will not be able or willing to sign the Convention. This sentiment was echoed by Isreal and Czechia. Singapore added that constitutional constraints may make it impossible for some countries to sign up the convention, given this article’s apparent creation of binding obligations in the field of administrative assistance. If the text is not changed, reservations should be allowed. Alternatively, the text should make clear that both type and procedure of assistance mechanisms should be left to be decided in optional protocols. U.A.E. too noted that countries should be given the option to opt-out of individual types of assistance mechanisms, just like under the MAAC. 

France noted that unless paragraph two of the draft article could be given a reasonable explanation of what it actually entails, it should be deleted.

The discussion on the commitment on mutual administrative assistance (MAA) opened with the Co-Lead presenting a streamlined Article 9 built around a broad obligation to provide “the widest measure” of assistance, with illustrative forms (including exchange of information via Article 10, assistance in collection, simultaneous examinations, service of documents, and other forms to be developed through protocols or other instruments), plus language on removing administrative barriers and acting “as soon as possible” on requests (including providing reasons when declining).

From the outset, the main tension was between delegations that viewed this breadth as necessary to make MAA meaningful—especially for countries currently underserved by existing arrangements—and those warning that the wording risks creating an open-ended obligation that outpaces domestic legal frameworks, capacity, and safeguards.

A first cluster—including Zambia (for the African Group), Tanzania, Ghana, Nigeria, and Algeria—framed MAA as central to the Convention’s credibility and to effective cooperation against evasion and avoidance, while pushing back against treating existing instruments as sufficient for all countries. Within this group, several concrete ambition-preserving moves emerged: Nigeria and Ghana supported broadening the purpose beyond “assessment” to “administration” (so MAA clearly covers collection/enforcement and not only assessments), and cautioned that subjective qualifiers like “effective” can create asymmetries between administrations with different capacities.

The most direct ambition-raising proposal came from the African Group (Zambia) on paragraph 3: it supported deleting the highly operational “as soon as possible / reasons for refusal” provision, but argued this should be replaced with a stronger implementation mandate—“State Parties shall develop guidelines, protocols or additional instruments necessary for the implementation of this article.” This approach was explicitly backed by Nigeria (including the view that the replacement would provide a clear basis for protocols to operationalise paragraph 1), and reinforced by Ghana, which emphasised that COP-driven additional instruments are essential so MAA can evolve with changing circumstances.

Several developing-country interventions reinforced that the Convention should not be framed as duplicative of existing instruments when, in practice, those instruments do not deliver effective assistance for all, and that relationship questions should be addressed later through the Convention’s relationship/implementation architecture.

Related ambition points from other developing countries supported broadening the scope beyond “assessment” (toward “administration”) and cautioned against subjective qualifiers that could weaken implementation. India argued that “assessment” is too limited and suggested reframing toward broader “administration and enforcement,” while also questioning whether “widest measure” creates an open-ended unconditional obligation and if an enumerated list could create confusion or unintended constraints. A related important nuance raised by Saint Kitts and Nevis was that concerns about differential capacities can be addressed without narrowing cooperation: it warned that paragraph 1 could be read as unconditional, and suggested moving capacity-sensitive language so it applies across all listed measures.

A second cluster—predominantly OECD and like-minded delegations—did not dispute the importance of MAA, but pushed to rein in the scope and/or shift detail to protocols. Switzerland explicitly supported India’s concern that “the widest measure” needs limits and called for a clearer standard, while also urging explicit reservation possibilities (by forms of assistance and by taxes covered) for legal certainty. Germany stressed “factual realities”: domestic legal constraints and taxpayer rights, the prevalence of reservations under the Multilateral Convention (especially on assistance in collection), and the need to build in principles such as subsidiarity/exhaustion of domestic remedies, proportionality, reciprocity, confidentiality, and taxpayer protections. Israel, Singapore, Japan, Belgium, Spain, Peru, and the UAE repeatedly returned to the same points: avoid duplication with existing frameworks; keep Article 9 high-level; move the list of forms (and especially the more sensitive elements like collection assistance) to protocols; and ensure Article 15 will clarify legal coherence and interaction with other instruments. Estonia captured the political framing behind this cluster by saying delegations will need to explain back home why a new framework adds value beyond existing arrangements.

Non-State stakeholders largely argued that a high-level but real MAA commitment is indispensable precisely because bilateral-by-bilateral approaches leave systemic gaps. Eurodadd/GATJ supported the inclusion of Article 9 as a multilateral mechanism and cautioned against approaches that effectively require countries to negotiate assistance piecemeal; it also argued that references to future measures should explicitly recognise a role for decisions taken by the COP. GI-ESCR welcomed the broad framing (“widest measure”) and saw the provisions on administrative barriers and request-handling as potentially translating into a COP mandate for implementation, emphasising the tight linkage between Articles 9 and 10. It also defended the need to commit with strong transparency measures such as the creation of a public database of country by country reports as established in the Sevilla Commitment. 

Published on 22 January 2026, the Co-Lead’s Draft Framework Convention Template moved Article 6 on mutual administrative assistance down, now making it Article 9, and provided new text:

On Tuesday, countries discussed the commitment on mutual administrative assistance. In tax matters, administrative assistance mainly includes the exchange of information between countries and cross-border assistance in the collection of taxes. The Co-Chairs’ draft text of the commitment proposes language according to which countries shall afford one another the widest measure of mutual assistance while at the same time respecting certain limits, such as confidentiality standards.

African countries generally agreed with the language of the draft. As pointed out by the delegate of Zambia, speaking on behalf of the African Group, mutual assistance is the very backbone of international cooperation in tax. The sharing of relevant information is key in countries’ fight against evasion and aggressive tax abuse and, as such, from a Global South and African perspective, a key element to enable domestic resource mobilisation and achieve sustainable development.

The African Group supported the suggested draft commitment on administrative assistance, which was found to be both high level enough and sufficiently clear to provide a solid foundation for substantive work on the matter under the Convention. The African countries believed the commitment should be framed widely enough to allow future work to be carried out by the Conference of Parties under the Convention to devise rules on all types of administrative assistance, including the exchange of all relevant information needed to enforce national taxes of any kind. The African countries further noted their acceptance that certain confidentiality standards need to be met in relation to the exchange of information. However, such secrecy standards cannot be to the detriment of introducing transparency measures like public country by country reporting, which the African countries believe is a cornerstone of effective and inclusive exchange of information.

Other countries, like Mexico, Japan and the Republic of Korea, were quick to point out the high risk of duplicative efforts, as other international fora and instruments like the OECD’s Global Forum and the Multilateral Convention are seen as sufficiently covering countries’ administrative assistance needs. Unsurprisingly, rather than championing administrative assistance’s potential for domestic resource mobilisation, Switzerland, a notorious guardian of international tax secrets, was keen to stress the need for clear limits to the ‘widest measure’ of administrative assistance. According to Switzerland, any commitment on administrative assistance cannot go beyond the standards set in other relevant fora, like the Global Forum.

Administrative assistance in line with the principles and standards set out by the Global Forum has seen significant expansion in recent years. Its reach is not universal, and especially low-income countries currently do not reap the benefits of administrative assistance. For those countries, it is not simply a matter of ‘signing up’ to the standards imposed on the most advanced tax authorities in the world. As Ghana put it, technical assistance, capacity building and different minimum standards, including on data protection, should be envisioned. The Bahamas had a slightly different take on the matter, urging that the commitment on administrative assistance focus on capacity building and leave the rule building to target other aspects of international tax regulatory reform. The Bahamas noted that as a small island developing state, its limited administrative resources are completely taken up by adopting and administering the various new regimes, like the domestic minimum tax triggered by Pillar Two. Improvement of administrative assistance thereby stands or falls with increasing administrative capacity.

A number of OECD countries questioned the lack of explicit mention of the interaction of the draft language with existing rules under the Global Forum. Austria, for example, wondered whether the purpose of the commitment was to make existing mechanisms for administrative assistance work, or whether the point is to create a self-standing regime on the basis of which countries can engage in administrative assistance. If it is the former, then reference has to be made to the relationship to the Global Forum’s work. In the case of a self-standing rule, this feature needs to be made more explicit so countries know what to expect. The United Kingdom emphasised the need for complementarity and respect for expertise on the matter in other fora. Estonia altogether questioned the addition of the commitment, especially when the Global Forum has quasi-universal reach and has developed international standards on the technical and complex subject of administrative assistance.

Ghana took the floor a second time to correct the common misunderstanding that standards developed in the Global Forum are universal. In reality, half of African countries are not members of the Global Forum, which indicates that adherence to and endorsement of Global Forum standards are neither global nor universal. Furthermore, among those jurisdictions that are members, only a handful exchange information automatically. In many instances, lower-income countries remain outside the regime’s operational reach. Kenya added that for many crucial administrative assistance obligations under the Global Forum, effective assistance is not granted due to the many reservations that have been adopted. On this last point, Belgium wondered whether the purpose of the commitment then is to refuse sovereign states the ability to use certain reservations in the context of administrative assistance.

Brazil’s intervention in the final minutes of the session summarised the Babylonian confusion that surrounds the negotiations on this topic. For certain countries, particularly low-income countries, there are clear problems with the existing rules on administrative assistance. For other countries, the standards on exchange of information and other forms of administrative assistance developed by the Global Forum work well. Many resources have been dedicated to the continuous improvement of these standards, and these countries see little point in duplicating this work, let alone building a new regime from scratch.

In the end, countries may want to focus on the obvious: (1) administrative assistance is a key tool for domestic resource mobilisation in each country at the negotiation table; and (2) not all countries at the negotiation table currently benefit from administrative assistance under the current rules. Accepting those two premises should make it possible for countries to assume the commitment to use the Framework Convention’s governance structure to look into solving this situation. As the Brazilian delegate pointed out, the first step is to agree on a commitment to explore this issue through working groups and exploratory protocols. We may add that high-income countries currently benefiting massively from administrative assistance will have enough opportunities in this process to deliberate on their individual contributions to the common good of global development and prosperity. There is no need to pull the ‘national interest’ brakes just yet.

Although this topic was not included among the commitments to be discussed in the first round, a series of guiding questions raised by the Secretariat enabled an initial scoping exercise. There was broad recognition that transparency and the exchange of information are essential pillars for effective international tax cooperation. Delegations from the Global South underlined that current mechanisms remain insufficient, particularly as many developing countries lack equal access to beneficial ownership data and timely exchange of financial information. They called for universal and automatic exchange systems under the UN framework, supported by capacity building and fairer participation rules. Some Northern countries also recognised the value of transparency but favoured complementary approaches with OECD standards and stressed that commitments should remain at a high level within the framework convention. The debate thus revealed a divergence between calls for universal, binding commitments versus a preference for more voluntary or protocol-based arrangements

From a Tax Justice Network perspective, the initial scoping discussions on administrative assistance and transparency mark an important step toward embedding effective information exchange in the Convention, but they also reveal stark divides.

The broad recognition that transparency and exchange of information are essential pillars is welcome, yet developing countries’ concerns remain acute: current OECD-led frameworks systematically disadvantage them, with unequal access to beneficial ownership data and financial information limiting their ability to tax cross-border wealth.

Calls from the Global South for universal, automatic exchange systems under a UN framework, backed by capacity-building and fair participation, point directly to the reforms needed to level the playing field. However, reluctance from some Northern countries—who prefer complementary reliance on OECD standards and high-level, non-binding commitments—risks entrenching existing inequities.

For the Tax Justice Network, real progress demands moving beyond voluntary arrangements toward binding commitments on automatic exchange of information, global beneficial ownership transparency, and public country by country reporting by multinationals, ensuring all jurisdictions can access critical tax data, close secrecy loopholes, and end the practices that fuel tax abuse and illicit financial flows.

From the zero-draft text prepared by the Co-Lead:

Article 11
Exchange of Information

1. The competent authorities of the States Parties shall exchange such information as [may be][is
foreseeably] relevant for the administration or enforcement of the domestic laws of the State Party
concerning taxes of every kind and description imposed on behalf of the State Parties (but not including social security contributions). In particular, information shall be exchanged that would be helpful to a State Party in preventing avoidance or evasion of such taxes, including:

(a) information regarding types of assets and instruments that in the future have been identified by the States Parties as providing opportunities to circumvent then-existing automatic exchange of information mechanisms;
(b) transaction information to allow the matching of exports and imports of goods and services to facilitate the detection and prevention of tax-related illicit financial flows; and
(c) such other information as may be agreed by the States Parties from time to time through
protocols or other instruments.

2. Any information received by a State Party under paragraph 1 or Article 9 shall be treated as secret in the same manner as information obtained under the domestic laws of that State and, to the extent needed to ensure the necessary level of protection of personal data, in accordance with the safeguards which may be specified by the requested Party as required under its domestic law. It shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes referred to in paragraph 1. Such persons or authorities shall use the information only for such purposes. They may, however, disclose the information in public court proceedings or in judicial decisions.

From the Terms of Reference adopted by the UN:

Commitments

10. The framework convention should include commitments to achieve its objectives. Commitments on the following subjects, inter alia, should be:

(a) Fair allocation of taxing rights, including equitable taxation of multinational enterprises;

(b) Addressing tax evasion and avoidance by high-net worth individuals and ensuring their effective taxation in relevant Member States;

(c) International tax cooperation approaches that will contribute to the achievement of sustainable development in its three dimensions, economic, social and environmental, in a balanced and integrated manner;

(d) Effective mutual administrative assistance in tax matters, including with respect to transparency and exchange of information for tax purposes;

(e) Addressing tax-related illicit financial flows, tax avoidance, tax evasion and harmful tax practices;

(f) Effective prevention and resolution of tax disputes

Zero draft text 

The text of the commitment on exchange of information in the zero draft read as follows: 

“1. The competent authorities of the States Parties shall exchange such information as [may be][is foreseeably] relevant for the administration or enforcement of the domestic laws of the State Party concerning taxes of every kind and description imposed on behalf of the State Parties (but not including social security contributions). In particular, information shall be exchanged that would be helpful to a State Party in preventing avoidance or evasion of such taxes, including:  

(a) information regarding types of assets and instruments that in the future have been identified by the States Parties as providing opportunities to circumvent then-existing automatic exchange of information mechanisms;  

(b) transaction information to allow the matching of exports and imports of goods and services to facilitate the detection and prevention of tax-related illicit financial flows; and  

(c) such other information as may be agreed by the States Parties from time to time through protocols or other instruments.  

2. Any information received by a State Party under paragraph 1 or Article 9 shall be treated as secret in the same manner as information obtained under the domestic laws of that State and, to the extent needed to ensure the necessary level of protection of personal data, in accordance with the safeguards which may be specified by the requested Party as required under its domestic law. It shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appealsin relation to, the taxes referred to in paragraph 1. Such persons or authorities shall use the information only for such purposes. They may, however, disclose the information in public court proceedings or in judicial decisions. 

3. In no case shall the provisions of paragraphs 1 and 2 be construed so as to impose on a State Party the obligation:  

(a) to carry out administrative measures at variance with the laws and administrative practice of that or of the other State Party;  

(b) to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other State Party; or  

(c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy (ordre public).  

4. If information is requested by a State Party in accordance with this Article, the other State shall use its information gathering measures to obtain the requested information, even though that other State may not need such information for its own tax purposes. The obligation contained in the preceding sentence is subject to the limitations of paragraph 3 but in no case shall such limitations be construed to permit a State Party to decline to supply information solely because it has no domestic interest in such information.  

5. In no case shall the provisions of paragraph 3 be construed to permit a State Party to decline to supply information solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person.  

6. In implementing this article, the States Parties shall take into account the needs and capacities of developing countries and countries in special situations as well as such limitations as may be agreed by the States Parties from time to time through protocols or other instruments.] 

Floor discussion 

Removal of the article? 

Starting with Austria, a number of countries challenged the necessity of article on exchange of information. Those countries believed that the draft article, much more than any other of the articles on the commitments, creates operational rules, and thus goes beyond a high level commitment. Austria therefore called for the deletion of the article. While Austria remains fully supportive of exchange of information, the country did not find it appropriate to establish a separate legal standard for exchange of information in the Convention. The reference to exchange of information in article 10 as one of the types of administrative assistance would be sufficient to serve as an anchor for an operationalizing protocol or other instruments for state parties wishing to adopt this. 

Poland, the United Kingdom, Czechia, Italy, France and Norway all supported Austria’s charge against article 11. Germany also believed the current text of article 11 was difficult to reconcile with the character of the convention as a framework convention, confirming once again its general position that any operational provisions or commitments in the framework convention that are of operational nature are misplaced and should be changed. 

France added that the text of the article added many safeguards and conditions to exchange of information for which there is no consensus among states. The article should be deleted to avoid long discussions on these aspects. 

The co-chair interjected that at the Third Session, the decision had been taken to create a designated article for exchange of information after it had become clear that references to exchange of information were popping up in various other articles. India reenforced the co-chair’s observation by noting that because exchange of information is a crucial tool to achieve other objectives, like combatting illicit financial flows or the effective taxation of high net worth individuals, the most elegant solution was to point to replace separate references with a dedicated article on the matter. 

Switzerland agreed with the European views on the article, but were nevertheless open to retain a standalone article if it gets rid of any operational, self-executing and open-ended obligations. 

Relationship with other instruments 

Like in the case of administrative assistance, many countries questioned the exact nature of the relationship between the article and existing international frameworks and instruments on exchange of information. 

India was adamant that it was not the country’s intention to step away from established practices and instruments or frameworks like the Global Forum, and urged countries not to see the article as a threat. The sole purpose of the article in the convention is to ensure that exchange of information can be developed as a tool to achieve the objectives set by countries under the convention. India did understand that the current formulation of the article is not consistent with other commitment articles, although its many detailed provisions are merely a reconciliation of previous concerns and demands raised by countries. India concluded that the article should stay but that its language should be made more of a high-level nature. 

Norway added that if the current version of the article would not be changed, the possibility to provide reservations needs to be considered because the current text is not in line with the current standard on exchange of information developed under other frameworks. 

Zambia expressed its sentiment of surprise after hearing some countries suggestions to delete the article or to have reservations inserted. Zambia noted that it too is a member of the Global Forum on Transparency and Exchange of Information but this fact does not alter the fact that exchange of information provisions are needed to execute the specific commitments under the convention, like the one on illicit financial flows. Zambia wondered whether the deletion of the article would imply that the negotiations on these commitments would have to be reopened to make sure suitable information exchange provisions would be reinserted to the various commitment articles. 

Brazil too expressed its loyalty to the Global Forum, mostly because of the high amount of sunk cost that Brazil and other countries have absorbed to comply with its standards. Brazil noted that about 60 UN member countries are not a member of the Global Forum currently, so the issue to provide rules for tax transparency beyond the Global Forum’s reach was not a merely theoretical one. Brazil believed that, on the other hand, a provision in the convention that would force countries to exchange information based on standards that are different than the Global Forum ones, would be sufficient a reason for many countries not to sign the convention. Brazil believed a midway solution could be for the article to express somehow the commitment to issue recommendations to guide countries that are currently not party to the MAAC or to tax treaties to membership of such instruments so they can partake in the existing frameworks. 

Foreseeable relevance standard 

A number of countries took positions vis-à-vis the standard of foreseeable relevance, which is a foundational rule of cooperation limitation in the current exchange of information regime in the MAAC and in the tax treaties: countries should only exchange information that “is foreseeably relevant” to enforce the requesting country’s tax laws. In the first paragraph of the draft article, it is suggested that the standard could be lowered the threshold for exchange by obliging countries to exchange any information that “may be relevant”. 

Italy objected to any attempt to get rid of the standard. Indonesia and Czechia believed that the standard of foreseeable relevance was appropriate. The UAE also supported retaining the stablished standard of foreseeable relevance and added that robust data protection and confidentiality safeguards were essential and should be added in any provision on exchange of information. Similarly, Saudi Ariaba mentioned reciprocity and equivalent data protection standards in all participating countries as important cornerstones of the exchange of information regime that should be reflected in the second paragraph and should be accompanied with a governance and review mechanism. 

Zambia and the African Group had some reservations on the reliance on the foreseeable relevance standard. Zambia recognized that the concept is an important and internationally recognized standard. However, the rule should not be reflected in the convention article itself. Rather, it should be dealt with in a protocol in which criteria can be developed to properly interpret the standard in light of the convention. 

The Day 4 discussion on exchange of information (Article 10) centred on whether the Framework Convention should contain a standalone commitment with some core substance, or whether exchange of information should remain folded into the mutual administrative assistance commitment (Article 9) and be operationalised almost entirely through protocols. A broad coalition of developing countries and regional bodies argued that a standalone exchange-of-information commitment is necessary precisely because existing arrangements have not delivered equitable access in practice, with some delegations warning that importing current asymmetries would undermine the credibility of the Convention for countries that need cooperation most.

The most ambition-preserving intervention came from the African Group (Zambia), which supported having a shorter, less technical standalone article but argued it should still embed an implementation-oriented principle that can evolve through Conference of the Parties (COP) guidance, protocols, or other instruments—explicitly treating “foreseeable relevance” as a standard that can be revisited rather than a fixed ceiling. The AG also highlighted practical problems some countries face with “foreseeable relevance” being applied restrictively by counterpart jurisdictions, and proposed redrafting capacity language so it enables implementation (including through COP guidance) rather than reading as a limitation. Senegal supported the AG line and pushed for careful drafting of the refusal/limitations clauses, including deleting one sub-paragraph for clarity and ensuring the core obligation is stable and not unnecessarily narrowed by examples. Nigeria likewise aligned with the AG, arguing that not all states can join existing frameworks and that the Convention should avoid importing their shortcomings, while ATAF endorsed the AG approach and framed exchange of information as essential for combating illicit financial flows and supporting domestic resource mobilisation. Tanzania aligned also with the African Group (AG), stressing that uneven reciprocity and responsiveness in current standards constrains developing countries’ ability to benefit, while Kenya emphasised that “taking into account” existing standards does not mean adopting them wholesale. Morocco and Uganda also supported a standalone article, while flagging that parts could be kept general and improved through protocols.

A second cluster—largely OECD and like-minded delegations—pressed to water down the text by reclassifying Article 10 as “too operational” for a framework convention, urging either deletion (moving substance to protocols) or a high-level cross-reference to “existing standards”. Ireland, Poland, Belgium, Spain, France, Switzerland, Canada, Germany, Italy, Portugal, Norway, Israel, Japan, Singapore, and Indonesia returned to overlapping concerns: (i) a preference to keep exchange of information within Article 9 or in protocols rather than in a detailed standalone article; (ii) strong insistence on retaining the “foreseeably relevant” standard to prevent “fishing expeditions” and protect taxpayer rights; (iii) warnings about duplication with existing mechanisms (often referencing the Global Forum and the Multilateral Convention on Mutual Administrative Assistance); and (iv) repeated calls to clarify interaction with other instruments under the Convention’s relationship provisions (Article 15). The UAE and the UK signalled they could accept a standalone article only if it was rewritten at a high level, with the UK explicitly arguing that reopening established work (e.g., CRS) is not desirable and treating “foreseeable relevance” as a rights-related safeguard. Algeria broadly endorsed the AG but diverged by supporting retention of “foreseeable relevance” and raising scope/administrability concerns (including on coverage and burdens for lower-capacity administrations).

Several interventions tried to position themselves as “compromise” while, in effect, reducing ambition by stripping the article of operational direction and deferring substance to later protocols. Peru and Russia argued the text goes beyond the Terms of Reference for a framework convention and should be moved to a protocol or heavily rewritten; the Philippines and Brazil supported the idea of a standalone provision that “generally applies” where needed but did not defend keeping meaningful specificity in the Convention text. Meanwhile, points of friction emerged around (a) whether the draft’s court-disclosure language should require explicit consent (raised by the UAE), (b) whether social security contributions should be covered (raised in the notes and echoed as a drafting issue), and (c) how to place capacity-related language so it recognises differential capacities without functioning as a restriction on the scope of cooperation—an issue the AG sought to address through COP-enabled guidance rather than narrowing the underlying obligation.

Non-State stakeholders largely intervened to raise ambition and to argue that exchange of information must be designed to overcome structural information asymmetries—especially for high net worth individuals (HNWI) and illicit financial flows—rather than entrenching them. Greenpeace International argued that exchange on request is structurally insufficient because administrations often do not know what exists to request, and therefore urged a clear mandate for automatic exchange of information (AEOI) and movement toward an asset/beneficial ownership identification architecture (often described as a global asset register), alongside technology transfer and temporary non-reciprocal AEOI so developing countries can benefit in practice. Tax Justice Network welcomed the article’s broad scope, cautioned against allowing reservations (warning these can recreate unequal systems), proposed strengthening language around “foreseeable relevance” to avoid misuse, and urged explicit recognition of AEOI and EOIR as minimum modes—while also stressing that governance design matters as much as legal drafting. ICRICT and the University of Nairobi’s Committee on Fiscal Studies similarly defended keeping a Convention-level baseline obligation (to avoid opt-outs that hollow out the framework), while Children & Youth stakeholders advocated privacy-by-design (distinguishing privacy from secrecy), data literacy/capacity building, and proactive tools to detect illicit flows in a digital economy.

From a Tax Justice Network standpoint, a strong UN commitment on exchange of information should therefore focus on making all modalities effective in practice, while ensuring that automatic exchange is implemented inclusively and without loopholes.

A central barrier is that exclusionary reciprocity requirements currently prevent many low- and middle-income countries from participating in automatic exchange; a principle of differentiation can help address this disparity and ensure countries can access the information they need.

It should also promote a whole-of-government approach: restrictions that prevent appropriate sharing of exchanged tax information can cause missed opportunities to combat money laundering and illicit financial flows, so tax authorities should be able to share relevant data with financial intelligence units and other law-enforcement bodies for broader objectives.

To stay effective as avoidance strategies evolve, the commitment should expand asset coverage beyond what existing automatic exchange systems capture, since evaders increasingly shift into assets not fully covered—such as crypto-assets and real estate—to hide offshore wealth.

Finally, the commitment should embed accountability by encouraging publication of aggregate, bilateral data on assets subject to exchange alongside equivalent values declared by taxpayers, so progress can be tracked and gaps can’t be quietly normalised.

From the zero-draft text prepared by the Co-Lead:

Article 6
High-net worth individuals

1. States Parties shall cooperate to enhance measures to detect, deter and prevent tax avoidance and
evasion by high‑net‑worth individuals.

2. The States Partiesshall share general information regarding structures and techniques used by highnet worth individuals to avoid and evade taxes.

From the Terms of Reference adopted by the UN:

Commitments

10. The framework convention should include commitments to achieve its objectives. Commitments on the following subjects, inter alia, should be:

(a) Fair allocation of taxing rights, including equitable taxation of multinational enterprises;

(b) Addressing tax evasion and avoidance by high-net worth individuals and ensuring their effective taxation in relevant Member States;

(c) International tax cooperation approaches that will contribute to the achievement of sustainable development in its three dimensions, economic, social and environmental, in a balanced and integrated manner;

(d) Effective mutual administrative assistance in tax matters, including with respect to transparency and exchange of information for tax purposes;

(e) Addressing tax-related illicit financial flows, tax avoidance, tax evasion and harmful tax practices;

(f) Effective prevention and resolution of tax disputes

Zero draft text

The draft text of the commitment on high-net worth individuals in the draft convention text read as follows:

“1. States Parties shall cooperate to enhance measures to detect, deter and prevent tax avoidance and evasion by high‑net‑worth individuals.

2. The States Parties shall share general information regarding structures and techniques used by high net worth individuals to avoid and evade taxes.

3. The States Parties shall explore coordinated approaches to ensuring effective taxation of high-net worth individuals while respecting each State Party’s sovereign right to determine the design, structure and level of taxation within its national tax system.”

Floor discussion

The discussion focused on 4 key points:

The co-lead opened for discussion guiding with a note on whether the right balance had been struck in the draft between cooperation and the sovereignty of states.

India supported the need for this article as did all other delegates speaking. India began by guiding delegates to think about the balance needed between specificity and high level, and to be clear about what the article wants to do and how it will do it.

Defining high-net worth individuals (HNWIs)

India also kicked off a theme of the debate in this session concerning an agreed definition for HNWI , and whether such a definition needed to be in this article or Art.3. Switzerland picked up this theme and introduced suggesting some qualifying language would be helpful around ‘avoidance’ and ‘evasion’

This definitional point was also raised by Belgium, Czechia, UAE, Philippines, Poland believing the definition should be provided in the framework convention text, or “ideally” in a separate protocol addressing at the same time domestic law [sovereignty]. Norway also supported this proposal. France went further and proposed an analytical note was needed to define who these HNWI were – and to provide options to guide approaches to our collective work. Although Singapore queried whether a definition was necessary and used this moment to emphasize the need to ‘preserve domestic flexibility’ in define who was or was not a HNWI. 

Poland called for some discussion on the definition or meaning of ‘effective taxation of HNWI’ as referenced in para 3.

Later Indonesia challenged the notion of ‘domestic’ environment being sufficient and in doing so welcomed Article 6, but also used the moment to support work on definition because absence of such risked inconsistency of treatment. Honduras underlined this point later and asserted that an agreed definition and consistent approach would provide legal certainty. Jamaica and PNG agreed some agreed definition was needed.

Strengthening/weakening language – proactive language lost

On substance of the text the first ‘alarm’ raised by India was that the text had lost its, previously incorporated, proactive nature, a point echoed by Brazil, Pakistan, Kenya, Mexico, and therefore questioned whether anything new was being added through the convention to curb avoidance and evasion by NNWI. For Brazil, they described as the now the weakened nature of Article 6. They explained that while the article described the need to detect and prevent evasion and avoidance by HNWI, it had lost specific substantive commitments for states to do so. Stronger language was needed, explained Brazil, to ensure the implementation of measures to detect.

Moreover, some concern raised about a loss of specificity from the earlier draft, by way of introduction in para 2 on the provision between jurisdictions of “general” information. In particular India noted that previous delegate discussions had highlighted a concern that exchange of information was a key concern in tackling evasion and avoidance by HNWI. The addition of ‘general’ to the text had the effect of losing specificity and with it that previously highlighted key concern.

These points and India’s intervention more broadly, for Zambia and on behalf of the AG, and Nigeria, Kenya, Morocco, S Africa, Ghana, B Faso aligned with their positions. Moreover, Zambia spoke of the ‘watering down ‘of the article giving rise to serious concern and that stronger, committed language should be introduced such as “state parties should develop and implement” rather than the weaker formulation “cooperate to enhance”. Mexico agreed that there was a need to strengthen language in the article – in para 3 to adopt rather than explore for instance.

Spain agreed with the Article as a whole and additionally proposed that paragraph 3 should refer to “progressive” and effective taxation of HNWI.

Exchange of Information reference (para 2)

India’s concern on language and inclusion in the text of ‘general’ exchange of information was supported. Estonia added that they believed the exchange of information requirement specified in para 2 was already adequately addressed in Article 11. EOI. Zambia on behalf of the AG proposed “general” should be deleted, as did PNG, Ghana in the sentence in Para2 and highlighted their collective understanding that there was a need to make a specific commitment to EOI on HNWI notwithstanding the separate Art 11 on EOI.

Norway on the subject of EOI reminded delegates of their [Norway’s] earlier proposed language for Art 6: “measures may include, as appropriate, exchange of information, experiences, and best practices regarding structures and techniques used by net worth individuals to avoid and evade taxes”. At the same time, they felt para 2 was too ‘standalone’ and delved into too much operational detail. Austria appeared to share this view but alternatively proposed deleting the paragraph and offered that a protocol would be favoured on the issue. Norway also expressed need for the language to have ‘necessary safeguards’ for countries – another nod to sovereignty perhaps! Meanwhile Singapore felt that synergies should be found with existing measures for EOI, as did Switzerland and Israel, and Luxembourg. China, however, recognised the norms and regulations imposed by domestic and international laws should be taken into account. Japan, too, agreed that the article should focus on sharing knowledge and best practices.

This concern was echoed by Belgium who also saw the placing of ‘general’ in paragraph 2 as strange and for Brazil they stated it adds little to the text and suggest deleting. Indonesia supported Brazil’s suggestion.

Finally, India raised a point, later echoed by Zambia/AG and Brazil, concerning text changes in paragraph 3 that seem to want to provide an absolute quantification of wealth for the basis of taxation while also calling for ‘effective’ taxation. India underlined a preference that the text should call for effective taxation [reiterated later by Brazil through “coordinated approaches”] rather than a ‘level of taxation’ and thereby noted the creation of a contradiction in the purpose of para 3. India felt the previous text version had been clear, notwithstanding some evident concerns from some countries that, indeed emerged later in the morning, regarding sovereignty. Zambia on behalf of the AG urged changing weaker language from ‘explore’ to ‘adopt coordinated approaches. Kenya supported this approach.

Germany made the point that cooperation is important under article but that the general exchange of information mechanisms remain the prime instruments to achieve this.

Sovereignty

Belgium – pressing the point that sovereignty was an overarching principle and merited its own article, a proposal supported by Czechia, Germany, Estonia, Austria, France, UAE, Israel, Korea, Luxembourg, Ireland, Sweden (noting that the article should not be seen as a mandate to coordinate national policy), and Switzerland (in calling for “fairness” aligned with national systems). Brazil stoked the fire, and in contrast, disagreed saying that the creation of a standalone article on sovereignty would inevitably, albeit unintentionally, weaken operational commitments on other substantial issues. 

References to sovereignty in their view [Brazil] should be deleted in Art 6. Likewise, Zambia on behalf of the AG, & Pakistan felt the provision in Article 6 on sovereignty was sufficient. Nigeria however, wanted to bring to delegates’ attention that “where there are inconsistencies between this treaty the provision of domestic law then the sovereignty that we are clamoring for, we have indirectly surrender it”. Nigeria proposed deleting the ‘sovereignty’ clause altogether in Art 6 as did B Faso. For Kenya, aligned with the Africa Group’s position, stated that Article 2B sufficiently addresses the issue on sovereignty.

Capacity

Azerbaijan in support of the article also wanted to recognise the need through either the Convention or an alternative mechanism (for the exchange and analysis of relevant financial information or support effective participation of developing countries in existing mechanisms i.e CRS)   provision for technical assistance, technology transfer, and capacity building to help developing countries.

Central purpose of Article 6

Honduras spoke plainly and directly reminding delegates and observers at large the importance of this article and the unsustainable impact of offshore arrangements and aggressive tax planning “undermining equity, public confidence, and the ability of developing countries to mobilize domestic resources” and supported the text edits proposed by Zambia/AG.

On a point of structure, Switzerland added that they thought the Article should being with paragraph 3 providing a primary emphasis on coordinated approaches to taxing HNWI.

The afternoon session of Day 2 opened with the Co-Lead explaining that—based on feedback from Nairobi and intersessional work—the relevant article had been significantly shortened into a single paragraph, with the earlier element on Exchange of Information (EOI) removed and relocated to Article 10. A technical exchange followed, including a question from the Russia on consistency of terminology between the revised text and Article 10, and the Co-Lead clarifying that the provisions were intended to cover different types of information (general methods/structures versus taxpayer-specific exchange). The discussion then moved quickly into substantive views on the revised drafting for high-net-worth individuals, including recurring requests to clarify scope (general techniques versus identifying taxpayers), confidentiality safeguards, and whether operational detail should be reserved for future protocols.

Several interventions raised ambition by pushing for stronger commitments—especially on coordinated action and progressivity—rather than simply “high-level” cooperation. Brazil described the topic as a priority, supported retaining language on sharing structures and techniques used by high-net-worth individuals, and argued that the framework should advance the concept of “effective taxation” in a way that speaks to equity and progressivity (including proposing coordination based on effective tax rates across the income distribution). Spain similarly pressed to incorporate progressivity explicitly. Lesotho and Nigeria both signalled that “explore” was too weak—Lesotho favouring stronger obligations and Nigeria arguing that coordinated approaches should be adopted rather than merely explored—while Zambia, speaking for the African Group, emphasised coordination as central and supported keeping commitments on sharing techniques/structures, alongside language that still leaves countries flexibility in implementation. By contrast, a number of delegations (including Switzerland, Canada, Norway, Sweden, Germany and others) welcomed streamlining but repeatedly urged more caution on confidentiality and sovereignty, and argued that detailed obligations—especially around exchange of information—belong in protocols rather than the framework convention text.

Published on 22 January 2026, the Co-Lead’s Draft Framework Convention Template moved Article 5 on high-net-worth individuals down to Article 6, and provides new text:

From a Tax Justice Network standpoint, negotiations on the effective taxation of high-net worth individuals expose both the urgency of reform and the risks of deferral. The recognition—led by developing countries—that unchecked avoidance and evasion by high-net worth individuals erodes fiscal space and undermines progress toward the Sustainable Development Goals signals a critical step forward. Proposals on ownership and asset transparency, progressive taxation, and safeguards against offshore abuse point in the right direction, but the reluctance of many Global North countries to embed these commitments directly in the framework convention threatens to weaken their impact. Deferring substance to existing instruments or future protocols risks perpetuating secrecy and inequities that allow the wealthiest to avoid contributing their fair share. Genuine progress requires binding commitments in the convention itself to close loopholes, establish global transparency standards, and, critically, create a global asset registry and strengthen automatic exchange of information mechanisms to ensure that high-net worth individuals are taxed effectively and equitably.

From the zero-draft text prepared by the Co-Lead:

Article 7
Tax-Related Illicit Financial Flows, Tax Avoidance and Tax Evasion
The States Parties shall cooperate to combat tax-related illicit financial flows, including tax avoidance and tax evasion. Such cooperation shall include developing effective tools for the detection and prevention of such tax-related illicit financial flows, to be enforced through mutual administrative assistance and exchange of information and any other agreed forms of international co-operation, to ensure the effective taxation of income and profits from tax-related illicit financial flows by, and in accordance with the national laws of, the jurisdiction whose tax base has been reduced as a result of the tax-related illicit financial flow.

From the Terms of Reference adopted by the UN:

Commitments

10. The framework convention should include commitments to achieve its objectives. Commitments on the following subjects, inter alia, should be:

(a) Fair allocation of taxing rights, including equitable taxation of multinational enterprises;

(b) Addressing tax evasion and avoidance by high-net worth individuals and ensuring their effective taxation in relevant Member States;

(c) International tax cooperation approaches that will contribute to the achievement of sustainable development in its three dimensions, economic, social and environmental, in a balanced and integrated manner;

(d) Effective mutual administrative assistance in tax matters, including with respect to transparency and exchange of information for tax purposes;

(e) Addressing tax-related illicit financial flows, tax avoidance, tax evasion and harmful tax practices;

(f) Effective prevention and resolution of tax disputes

Zero draft text

The proposed text of the commitment on tax-related illicit financial flows, tax avoidance and tax evasion in the draft convention text read as follows:

“The States Parties shall cooperate to combat tax-related illicit financial flows, including tax avoidance and tax evasion. Such cooperation shall include developing effective tools for the detection and prevention of such tax-related illicit financial flows, to be enforced through mutual administrative assistance and exchange of information and any other agreed forms of international co-operation, to ensure the effective taxation of income and profits from tax-related illicit financial flows by, and in accordance with the national laws of, the jurisdiction whose tax base has been reduced as a result of the tax-related illicit financial flow.”

The proposed definition from draft article 3 read as follows:

“the term “tax-related illicit financial flow” means a financial flow that is illicit in origin, transfer or use, that reflects an exchange of value and that crosses country borders (an “illicit financial flow”) where the principal purpose, or one of the principal purposes of such flow, is the avoidance or evasion of a legitimate government revenue claim. It does not include illicit financial flows that consist primarily of non-tax crimes (e.g., trafficking or smuggling) even if the crime would also give rise to a revenue claim”.

Floor discussion

In the afternoon of the second day of the session, delegates discussed the article on illicit financial flows. A major priority dating back to the terms of reference negotiations, when it was a contender for one of the early protocols, the issue has been a source of apparent confusion for many OECD member delegates. This was the dominant theme of most interventions from this group, along with a push to limit the text and in particular to remove reference to the jurisdiction whose tax base has been reduced by a given illicit flow. Rather than simply reiterating the agreed UN definition however, in this session G77 countries raised a number of substantive points on the drafting, aiming to broaden the scope and ensure meaningful operational implications.

Definitional questions

Czechia began by proposing to eliminate the term ‘tax avoidance and tax evasion’ from the article’s title, arguing that their relationship to illicit flows is complicated and their inclusion therefore confusing. Czechia also argued that illicit should be interpreted to mean unlawful, with the scope correspondingly narrowed. Portugal raised similar questions over the inclusion of avoidance, based on a view of illicit as meaning illegal. Israel echoed these views, as did Belgium, Denmark, Estonia, Ireland, Italy, Japan, Republic of Korea and Switzerland.

Germany supported Czechia’s position and argued that the question of legality should be key, and went as far as to argue that tax avoidance ‘is completely legal’. Austria echoed Germany, and also questioned the origin of the definition of tax-related illicit financial flows in article 3. The UK echoed Portugal, Germany and Austria, and said that they could not support a definition of IFF that obscured the legal distinction between evasion and avoidance.

Singapore echoed others but also made the first reference in this session to the UN’s formal statistical definition of illicit financial flows, backed by all members and the basis of the definition in the draft article 3. Singapore argued, however, that a definition developed for statistical purposes was not necessarily the appropriate basis for a legal instrument.

Poland saw progress in the article, and appreciated its emphasis on the tax-related purpose of (some) illicit flows, but also questioned the issue of including avoidance on the basis of potential legality. Poland also saw confusion in referring to avoidance and evasion separately in the title. France noted that with many delegates indicating confusion, it would be useful to have an explanatory note on the purpose of the article. Netherlands echoed this confusion. Azerbaijan suggested distinguishing between “tax evasion, abusive tax avoidance, and legitimate tax planning.”

Norway, a longstanding champion of the fight against IFFs, expressed caution about it as a central legal concept in the Convention, and proposed instead to focus on tax avoidance and tax evasion, and existing mechanisms to address these.

Range of responses

A number of countries responded to these definitional questions, with the African Group and others emphasising the inclusion of tax avoidance. Nigeria referred to the dictionary to clarify the difference between illicit and illegal, where the former includes not only the illegal but also that which breaks social rules or is seen as morally wrong – and hence the agreed inclusion of avoidance. Senegal called for caution over deleting tax evasion and avoidance, noting the important feature and common outcome of the taking of deliberate steps to avoid paying tax in a given jurisdiction, and highlighting links in the behaviours. Tanzania noted the explicit, agreed commitment in the Committee’s terms of reference.

India proposed a purpose-led definition as follows: “Tax-related illicit financial flows means cross-border movements of funds or assets that are generated, transferred, or used through illegal or abusive practices for the purposes of tax evasion or tax avoidance.” Russia supported this, and also raised the question of changing the title, possibly to echo the text with illicit flows including avoidance and evasion. Mexico agreed with Russia’s questions. China also noted the “ambiguous relationship” between the different elements, as did Philippines.

While reflecting the familiarity of the definitional discussion and the issue of illegality vs illicitness from the UNGA’s Second Committee, Mexico raised a concern over whether different national legal responses to illicit flows might not create risks – suggesting the possibility to remove tax avoidance and tax evasion from the paragraph and rethink the article’s purpose entirely. Honduras agreed that it might be best to define tax-related IFFs in the Convention, leaving avoidance and evasion to national law.

Brazil proposed to list separately each of tax avoidance, tax evasion and tax-related illicit financial flows. Denmark expressed interest in seeing this as a written proposal. UAE proposed separate articles on each of IFFs, tax avoidance and tax evasion.

Breadth of scope

Zambia on behalf of the African Group requested the deletion of the final clause in the definition, which would exclude any illicit financial flows “that consist primarily of non-tax crimes (e.g., trafficking or smuggling) even if the crime would also give rise to a revenue claim”. Tanzania echoed this. Algeria also argued against excluding non-tax-related IFFs, since this would reduce the scope and effectiveness of the resulting cooperation.

Jamaica also noted that excluding IFFs that give rise to revenue claims would fetter the hands of the tax authority, and could see no reason to do so. Japan echoed Jamaica and Nigeria concurred, asking why a smuggler should be spared for their tax offense – even if their primary motivation were not tax-related. Kenya agreed that restricting IFF scope according to motivation was inappropriate, highlighting the challenges in applying the principal purpose test and the related burden of proof.

Inclusion of countries suffering losses

Estonia raised a question over the inclusion of “the national laws of the jurisdiction whose tax base has been reduced” – including if this were understood to be wider than a tax claim. Tanzania emphasised the importance “that income connected to illicit financial flows is adequately taxed in the country where the economic activity or crime is originated or connected or where tax base is eroded.” Algeria specifically welcomed the enshrining of the idea that the country whose tax base has been reduced should receive the taxing rights. Philippines, Kenya agreed. Zambia and the AG noted that the revenue claim was key to dealing with illicit financial flows.

Azerbaijan speculated that this aspect could contribute to disputes; while Brazil’s proposed redrafting suggested to remove it as part of a compromise. India suggested that there could be language which would leave this more open, with the possibility of a developing a protocol (“maybe an STTR-style article”) to address it fully.

Operational implications

There was something near consensus on the need to develop the article to ensure meaningful implementation . A range of countries emphasised the need for the article to be further developed to ensure meaningful implementation would follow. Zambia and the AG called for the article to begin “States Parties shall develop and implement…”, rather than “shall cooperate”. This was echoed by India, Algeria, Kenya, Senegal and Tanzania. China recommended strengthening the implementability of the article. Norway indicated they would provide detailed comments focused on “practical tools that enable countries to address the underlying drivers of tax-related illicit financial flows, such as effective exchange of information, mutual administrative assistance, transparency, and other forms of international cooperations.” Mexico favoured a general discussion on views on this point.

Korea meanwhile welcomed the use of ‘cooperate’ rather than ‘develop and implement’.

The second segment of the afternoon session on Day 2 turned to Article 7 on tax-related illicit financial flows, where ambition-focused interventions again pushed for a more operational and justice-oriented commitment.

African Group (through Zambia) proposed restructuring the article to make cooperation more action-oriented—explicitly linking cooperation to tools for detection and to ensuring taxation is applied by jurisdictions from which flows originate—an approach supported in substance by Ghana, Kenya and Nigeria, with Nigeria also calling for provisions that prevent jurisdictions from serving as safe havens and for coordinated global standards that close loopholes.

Non-state stakeholders reinforced ambition: WILDAF AO urged legally binding obligations (including public country-by-country reporting, a global asset registry, and automatic exchange of information) and stronger transfer pricing rules, while youth voices stressed the development stakes and the need for inclusive cooperation and capacity-building.

At the same time, several delegations (e.g., Belgium, Portugal, Singapore, Canada, Ireland, South Korea) stressed definitional clarity (what counts as “IFFs”), concerns about including tax avoidance under “illicit,” and the need to align title, scope, and drafting level—repeating the broader tension between higher-ambition commitments and a “framework-first, protocols-later” approach.

Published on 22 January 2026, the Co-Lead’s Draft Framework Convention Template provided an updated version of Article 7 on illicit financial flows:

From a Tax Justice Network perspective, discussions on illicit financial flows, tax abuse, and harmful tax practices confirm broad recognition of their centrality but also expose sharp divides.

Global South countries stressed the heavy toll of profit shifting, tax havens, and harmful tax competition, calling for binding UN commitments to curb illicit financial flows and ensure accountability through transparency.

By contrast, many Global North states preferred incremental approaches and complementarity with existing OECD tools, resisting prescriptive obligations.

For the Tax Justice Network, genuine progress requires prioritising the creation of key global registries – on beneficial ownership, asset holdings, and public country by country reporting – administered through a UN Centre for Monitoring Taxing Rights or a similar body under the Convention’s Conference of Parties. These are essential first steps to dismantle secrecy and tackle tax-related illicit financial flows.

From the zero-draft text prepared by the Co-Lead:

Article 5
Fair Allocation of Taxing Rights

1. A fair allocation of taxing rights among jurisdictions shall reflect the real economic contribution of
each relevant jurisdiction, including jurisdictions where value is created, markets are located, revenues are generated and users or data are located, and taking into account such other factors that may become relevant as business models evolve, whether or not such activities involve physical presence in a jurisdiction.

2. The States Parties shall explore and pursue cooperative approaches to support the fair allocation of
taxing rights with a view to reducing the risks of double taxation and non-taxation.

From the Terms of Reference adopted by the UN:

Commitments

10. The framework convention should include commitments to achieve its objectives. Commitments on the following subjects, inter alia, should be:

(a) Fair allocation of taxing rights, including equitable taxation of multinational enterprises;

(b) Addressing tax evasion and avoidance by high-net worth individuals and ensuring their effective taxation in relevant Member States;

(c) International tax cooperation approaches that will contribute to the achievement of sustainable development in its three dimensions, economic, social and environmental, in a balanced and integrated manner;

(d) Effective mutual administrative assistance in tax matters, including with respect to transparency and exchange of information for tax purposes;

(e) Addressing tax-related illicit financial flows, tax avoidance, tax evasion and harmful tax practices;

(f) Effective prevention and resolution of tax disputes

Zero draft text

The proposed text of the commitment on fair allocation of taxing rights in the draft convention text provides read as follows:

“1. A fair allocation of taxing rights among jurisdictions shall reflect the real economic contribution of each relevant jurisdiction, including jurisdictions where value is created, markets are located, revenues are generated and users or data are located, and taking into account such other factors that may become relevant as business models evolve, whether or not such activities involve physical presence in a jurisdiction.

2. The States Parties shall explore and pursue cooperative approaches to support the fair allocation of taxing rights with a view to reducing the risks of double taxation and non-taxation.”

Floor discussion

In the afternoon of the first day of negotiations of the Fifth Session, countries discussed the commitment on fair allocation of taxing rights, aptly described by one delegate as the heart of the convention.

This did not prevent the discussion causing some heartburn with onlookers as opinions among countries on the direction of travel for this commitment were very divided.

Nature of the commitment

One of the changes made to the article as compared to the previous draft was the removal of the wording according to which countries “shall take such actions, including renegotiation of existing tax agreements that are inconsistent with this article.” Countries like Germany applauded the omission as an improvement but was still concerned about the lack of precision of the legal nature of the commitment and its nexus rules. Similarly, the United Kingdom believed that if the convention was to impose legal obligations on parties, it was essential that those parties have a clear understanding of what those obligations mean in practice, which is currently not the case for article 5.

Zambia and the African group concluded that with the omission of the previous text on renegotiation action, the provision was no longer providing for a commitment. The African Group therefore planned to resubmit its previous suggested text on this point. Kenya, too, wanted to revert to the previously suggested text, adding that the current text of paragraph two is too vague and almost certainly will not promote effective implementation of the commitment, as it stands today.

Need for an open-ended list of nexus rules

Cumulative nature of nexus rules

Another point of criticism with the draft was unclear nature of the list of nexus rules mentioned. For Belgium, Czechia and Luxembourg it was important that the list was open-ended so the commitment would be flexible and resilient to also deal with future business models and new economic realities.

India noted that the current drafting of the first paragraph appears to instate a cumulative condition for the nexus rules to apply. India therefore suggested to replace the use of ‘and’ with ‘or’.  Peru, too, believed the nexus rules should operate as alternatives, rather than as a cumulative condition for being granted taxing rights.

Azerbaijan and the United Kingdom came to the opposite conclusion, noting both that the application of the commitment should not result in overlapping taxing rights and multiple taxation.

Similarly, Denmark, Norway, Singapore and China also expressed concern that the text could be understood as creating multiple nexus on the same income to various countries, thereby creating all kinds of scenarios of double taxation.

Brazil expressed yet a different view by noting that the nexus rules and factors should not all have equal weight, and that it would be for the future protocol or workstreams under the convention to deal with questions of balancing and weighting all possible nexus rules. For this reason, the list of nexus rules and factors in the commitment should in any case be open-ended.

Rebalancing the fair allocation

A number of countries were recalling previous draft text elements which they deemed to be removed prematurely. India, for example, pleaded to reinstate a nexus rule referring to “where economic activity occurs”.

A number of countries urged the number of nexus rules and factors mentioned in the text to be reduced to be reduced. Switzerland and Sweden, for example, noted that the commitment should merely replicated the relevant text of the Sevilla Commitment which provides, similar to India’s suggestion, that taxpayers should pay tax: “where economic activity occurs and value is created, in accordance with national and international laws and policies”. Sweden emphasized that the factor of physical presence should get more recognition on the text.

Whereas India and Sweden seemed to emphasize the importance of physical presence as the main nexus rule, Peru believed that the opposite was true and that taxing right allocation to countries that satisfy certain nexus rules without there being physical presence equally mattered. In the same vein, Kenya was also not averse to adding more factors in this regard, like user location and location where data is generated.

The United Kingdom was willing to accept that there was a case for allocating more taxing rights to market countries over profits of the largest and most profitable MNEs but remained concerned about the convention recognizing a market-based taxing right in generalized and unqualified terms. Germany was generally in support of the principle that taxing rights should reflect genuine economic activities but lamented the fact that many of the concepts introduced in the text have a legal meaning which is unclear, which makes it difficult for a country to support the text.

South Korea noted that the current draft text overly continued to over-emphasize source based taxing rights, and that a better balance should be struck in the text with the rights of the residence jurisdictions.

Kenya challenged the OECD countries’ view by nothing that the many broad factors in the current text of the first paragraph apply both to resident and source states. The factors do not primarily focus on source states. Also, the text does not mention the concept of source state, and therefore it should also not reference the concept of residence state. As to the prior proposal by Sweden and others to focus only on economic activity and value creation, Kenya believed this approach to be very restrictive, and exactly being the approach that had led to the situation of unfair allocation of taxing rights which countries were now trying to resolve in this commitment.

As noted by France, it seems that each country has a different concept of what fair allocation of taxing rights effectively entails. Countries also seem to struggle to identify what the best terms and factors are on which the allocation rules should be considered fair.  

Objective of avoiding double taxation

Switzerland emphasized the importance to explicitly mentioning avoiding double taxation and non-taxation as the objective of fair allocation of taxing rights. According to Switzerland, if there is no double taxation, there is no need for the allocation of taxing rights.

Russia disagreed with this view. The avoidance of double taxation or non-taxation is not the purpose of the fair allocation of taxing rights between countries but a goal in itself.

Scope of taxes covered

A number of countries also criticized the fact that the text of the commitment seems to focus mostly on corporate income tax while not clearly expressing whether it also applies to the taxation of individuals or to other taxes than income taxes. Estonia suggested to make explicit that the commitment applies to taxes of every kind and description.

Early in the second day, countries agreed that they would try and hold a closed-door session to streamline the various proposals for changes to the draft text of the commitment.

The Workstream I Co-Lead opened the session by clarifying that his remarks the previous day were not directed at any specific delegation—particularly those relating to the need to consider the background documents. He encouraged delegations to focus on identifying common ground so that, by the end of the day, Member States could agree on wording they would be comfortable with for the commitment on fair allocation of taxing right, reminding negotiators that “our strength lies in our diversity.”

In subsequent interventions, a clear divide persisted between delegations supporting a more expansive approach to nexus and allocation, and those cautioning against overly detailed or binding commitments at the framework-convention stage.

A number of developing countries—including Tanzania, Sierra Leone, Mauritius, Algeria, Saint Kitts and Nevis, and Egypt—strongly backed the African Group’s proposal as better reflecting current economic realities, including digitalisation, market presence, user participation and the role of data, and argued that taxing rights should not be determined solely by physical presence; several also emphasised the need for coordination to reduce the risks of over-taxation and double taxation, and to address long-standing imbalances that constrain developing countries’ tax space.

In contrast, several OECD countries—including Canada, Belgium, Switzerland, Estonia, and Italy—questioned whether the emerging Article 5 drafting was consistent with the agreed nature of a framework convention (as opposed to a detailed multilateral tax convention), warned about uncertainty and double taxation, and expressed particular concern with language implying an obligation to renegotiate existing treaties; Ireland similarly supported moving beyond physical presence but opposed mandatory renegotiation absent bilateral consent and flagged potential interaction issues with other provisions.

Some delegations sought a bridging approach—Italy and Brazil pointed to the need to soften and clarify the text (including by restructuring sentences), while Colombia supported a balanced framing and remained open to the possibility of renegotiating inconsistent agreements. India offered compromise wording that combined a broad fairness principle—anchored in economic contribution across activity, value creation, markets, revenues, users and data—with a commitment to pursue cooperative approaches through domestic measures, protocols and nexus/allocation rules to reduce double taxation and double non-taxation.

Non-State stakeholders intervening from the floor largely clustered around two broad currents: those urging a more substantive Article 5 anchored in fairness and coordination, and those warning about legal, economic, and sector-specific risks. African Union framed fair allocation as a core reason its members engaged in the process, argued that “high-level” should still contain enough substance to set standards and guardrails (with details elaborated via protocols), and endorsed the African Group proposal as fair and balanced; it also underscored the need for coordinated approaches to prevent double taxation (and double non-taxation), defended good-faith implementation—citing precedent from the OECD/G20 BEPS Project for treaty changes to implement agreed outcomes—and called for immediate legal support from the United Nations Office of Legal Affairs in response to concerns raised under the Vienna Convention on the Law of Treaties. In a similar supportive vein, ATAF backed the African Group language as a workable balance between principles and implementation pathways, including a coordination route to address double-taxation concerns, while ICTD argued that historical treaty outcomes should not be treated as a benchmark of fairness and that agreed fairness principles could reasonably justify later modifications (whether via protocol or bilaterally), though it noted the question of the appropriate placement of such language.

Other CSOs pushed for broader ambition or scope: War on Want / Global Alliance for Tax Justice urged the draft to more explicitly reflect equitable taxation of multinationals and a stronger system for taxing profits where activities take place (including to fund development and climate action), YTJN called for a dedicated article on extractive-sector taxation, and PSE/EUTO highlighted modelling suggesting large stakes from reallocating taxing rights and noted that refusal to renegotiate could significantly affect outcomes.

By contrast, several business and technical stakeholders stressed predictability and the risk of multiple taxation: IATA argued that source-based approaches are ill-suited for airlines and warned of heightened double or multiple taxation, pointing to ICAO as the appropriate forum for resolving aviation-specific issues; ICC (including ICC Mexico) cautioned that broad, undefined nexus and fairness concepts could generate disputes, uncertainty, and trade impacts, and suggested adding an explicit obligation to avoid double taxation (e.g., via relief mechanisms); IBFD similarly supported retaining high-level drafting but recommended adding minimal substance and clearer links to other treaty provisions to avoid interpretations that would cut across existing treaties or sovereign taxing powers; and BCAS advocated softer formulations (e.g., “endeavour”) and deferring detailed fairness judgments to protocols.

Finally, one non-State participant (Attiya Waris) invoked wider headwinds against multilateralism and pointed to treaty termination as a tool states sometimes use. 

The afternoon session began with a clarification from the Co-Lead that the previous drafting of Article 5 had received substantial feedback. One of the most significant points raised was that the text largely reiterated what was already contained in the Terms of Reference, without adding further substance. In response, several revisions were introduced, including a final sentence explicitly referring to the need to renegotiate existing treaties that are inconsistent with the article.

Member State interventions then focused on four main issues: (1) the criteria for determining the allocation of taxing rights; (2) whether those criteria should trigger a right to tax a portion of the income generated from the relevant activities; (3) what constitutes a “fair” allocation; and (4) the actions States should take to give effect to the article, including the renegotiation of existing tax agreements that conflict with its provisions.

Early in the session, Zambia—speaking on behalf of the African Group—presented a comprehensive drafting proposal for this article that addressed all four of these aspects. On the first two points, the African Group proposed language recognising that “all jurisdictions in which value is created, markets are located, revenues are generated, users or data are located, or economic activities are carried out, have the right to tax income derived or attributable therefrom.”

On the definition of a fair allocation, the African Group suggested text stating that “States Parties agree that their allocation of taxing rights shall reflect the real economic contribution of each relevant jurisdiction, taking into account, as appropriate, the factors mentioned in paragraph one above, and that no State Party shall be denied the right to tax income for the sole reason that such income has been derived from its jurisdiction by a taxpayer without physical presence in that jurisdiction.”

Finally, the African Group put forward a non-exhaustive list of measures that States “shall adopt” to enhance a fair allocation of taxing rights: (a) domestic measures; (b) appropriate protocols; (c) the development and adoption of simplified nexus and allocation rules; (d) coordination of rules and efforts to minimise the chances of over-taxation and non-taxation; and (e) the interpretation, application, and—where necessary—renegotiation of existing tax treaties and related agreements to ensure consistency with the principles set out in the article.

Subsequent interventions largely revolved around the African Group’s proposal and the alternative wording set out in the Co-Lead’s draft. A particularly important intervention came from Norway, which later served as a reference point for several subsequent remarks. Norway argued that the commitments in Article 5 should remain high-level—echoing points made earlier by India, Czechia, and Germany—and stressed that further work is needed on the article’s conceptual baseline, particularly where taxing rights overlap between two states. It emphasised the need to strike a balanced approach between residence- and source-based taxing rights that delivers “meaningful” taxing rights for both jurisdictions while ensuring tax certainty and protection against multiple taxation for taxpayers, and cautioned that poorly designed reallocations could distort business decisions or profitability and ultimately undermine the Convention’s broader goal of strengthening domestic resource mobilisation. Norway also raised strong concerns about the newer language implying a legal obligation to renegotiate existing tax treaties, arguing that the criteria are unclear, that bilateral treaty parties should retain discretion, that existing bilateral treaty content is outside the treaty’s scope, and that it is unusual for a multilateral instrument to mandate renegotiation—especially given that questions of how new and existing treaties interact are expected to be addressed elsewhere (including under general treaty-law principles and later provisions). As an alternative, Norway proposed drawing more closely on the Sevilla Commitment (notably paragraph 28.e, with adjustments), and reiterated language previously tabled with Sweden in the Nairobi informal discussions, while indicating it would return to examine the African Group proposal in detail and underscoring the importance of explicitly referencing both national and international law.

Going forward, as discussions turned to the factors shaping the nexus rules, delegations raised a range of concerns. These included: the absence of any reference to the taxing rights of residence countries (Israel); worries that nexus rules could create overlapping taxing rights (South Korea); and the risk of double taxation (Switzerland, Mexico, United Arab Emirates). Others emphasised the importance of preserving the stability of the current international tax system (Luxembourg, Netherlands, China), while United Kingdom cautioned against establishing a general allocation rule for market jurisdictions, rather than treating market nexus as a more specific sub-rule for the digital economy.

With respect to the concept of “fairness,” some delegations noted that the term is open to different interpretations (France), while others argued that any definition should incorporate additional considerations—such as the obligation to avoid both double taxation and double non-taxation (Poland). Finally, a group of States stressed the need to begin discussions on Article 18 as soon as possible, before engaging with treaty renegotiation language in specific articles (Netherlands, Belgium, Switzerland, Mexico, Jamaica).

As delegations signalled alignment either with the Norway–Sweden formulation (Finland, Jamaica, Netherlands, France, Switzerland, Poland, Denmark) or with the African Group’s proposal (Ghana, Kenya, Senegal, Lesotho), an intermediate path was also suggested (Austria). The Co-Lead picked up this idea, noting the potential to identify points of convergence between the competing proposals—an approach that could help structure the discussion on the second day of negotiations.

From a Tax Justice Network perspective, the negotiations show both encouraging signs of progress and persistent gaps. On the positive side, the principle of fair allocation of taxing rights has clearly moved to the center of the debate. However, substantial gaps remain.

The Global South’s demand for taxing rights aligned with real economic activity directly tackles structural injustices—such as profit shifting, digitalisation loopholes, and the erosion of source-based taxation—that have long deprived them of critical revenues. Meanwhile, the Global North emphasises continuity with the status quo, particularly with OECD-led approaches.

From the standpoint of the Tax Justice Network, progress on fairness will only be meaningful if translated into essential reforms: moving beyond the separate entity approach to end corporate profit shifting through unitary taxation, creating future-proof nexus rules that capture significant economic presence, and rebalancing taxing rights under a multilateral system that corrects treaty asymmetries and adapts to emerging challenges.

Without these issues included in the Convention as such, this commitment risks remaining rhetorical rather than delivering gains for all countries as well as fair redistributive outcomes.

From the zero-draft text prepared by the Co-Lead:

Article 4
Sustainable Development

Taking into account their different capacities, the States Parties agree to pursue international tax cooperation approaches that will contribute to the achievement of sustainable development in its three dimensions, economic, social and environmental, in a balanced and integrated manner.

From the Terms of Reference adopted by the UN:

Commitments

10. The framework convention should include commitments to achieve its objectives. Commitments on the following subjects, inter alia, should be:

(a) Fair allocation of taxing rights, including equitable taxation of multinational enterprises;

(b) Addressing tax evasion and avoidance by high-net worth individuals and ensuring their effective taxation in relevant Member States;

(c) International tax cooperation approaches that will contribute to the achievement of sustainable development in its three dimensions, economic, social and environmental, in a balanced and integrated manner;

(d) Effective mutual administrative assistance in tax matters, including with respect to transparency and exchange of information for tax purposes;

(e) Addressing tax-related illicit financial flows, tax avoidance, tax evasion and harmful tax practices;

(f) Effective prevention and resolution of tax disputes

Zero-draft text

The proposed text of the commitment on sustainable development in the draft convention text provides read as follows:

“Taking into account their different capacities, the States Parties agree to pursue international tax cooperation approaches that will contribute to the achievement of sustainable development in its three dimensions, economic, social and environmental, in a balanced and integrated manner.”

Floor discussion

During the negotiations, Jamaica took the floor to suggest expanding the provision as follows:

“Taking into account State’s common but differentiated responsibilities and respective capabilities, the States Party to the Convention agree to pursue international tax cooperation approaches that are aligned and informed by the principle of sustainable development, in a manner that promotes the alignment of fiscal policies with the international commitments assumed under environmental treaties.”

Jamaica explained that the aim of the new provision is to highlight that environmental issues are linked to economic development. The newly proposed text was therefore an attempt to bringing together two principles of international environmental law, namely the principle of sustainable development, and the principle of common but differentiated responsibilities and respective capabilities which recognizes that countries have different current capabilities and that national circumstances might guide the level of action and commitment that they might be able to undertake in dealing with the climate emergency.

Brazil added that its preference for the text of the commitment was to also reflect that international tax cooperation must respect, protect and promote all human rights and contribute to addressing historical and structural inequalities, including those related to gender and race. In Brazil’s view, tax policies and international tax instruments should be designed in a manner to promote fairness, social inclusion through progressive taxation that aligns with taxpayer’s ability to pay and strengthen domestic resource mobilization.

Mexico supported Jamaica’s and Brazil’s effort to expand the commitment. So did the United Kingdom, suggesting for the new text to make a link, where relevant, to the FFD4 Sevilla Commitment. Norway, too, was interested in working on an improved text along the suggested lines.

A few countries were less keen to expand the current version of the commitment text. India, for example, did not oppose adding language as long as the language used in the commitment is not of a prescriptive nature. India was happy to support language on strengthening domestic resource mobilization but urged for any upgraded provision to safeguard every state’s policy space to design its own tax system. Saudi Arabia wished to keep the existing text, noting that an expansion may fail to preserve the careful balance previously achieved that resulted in the current text. Also, expansion of the topic may require expertise that is beyond those of tax experts. The Africa Group, too, preferred the text of the commitment to remain unchanged.

After a dispute over a proposed amendment to the stakeholders’ participation decision—seeking to exclude associations of parliamentarians and certain civil society organisations, and defended by Russia and Türkiye in oral interventions—the morning session on 2 February 2026 opened with an explanation from the Co-Lead of Workstream I on the new draft and how discussions would be organised going forward. The debate then focused on Article 4 on sustainable development. Three main positions emerged.

First, some delegations argued for keeping Article 4 as it stands, on the grounds that the language should remain high-level and that, given the breadth of the concept of sustainable development, it would be difficult to cover it comprehensively at this stage. This position—clearly articulated by India and supported by the African Group, China, Russia, South Korea, Saudi Arabia, Pakistan, and several high-income countries (Spain, France, Israel, Luxembourg, Canada)—favoured avoiding changes now and developing the article through protocols or other instruments under the framework.

Second, a number of delegations argued that Article 4 should be expanded to capture key elements that are currently missing. The United Kingdom’s proposed language—explicitly referencing the polluter-pays principle, and supported by Brazil, Sweden, Denmark, and Germany—was a clear example of this approach. Jamaica also made a strong intervention in favour of strengthening the environmental dimension of the commitment. In response to those calling to keep the text high-level, Jamaica acknowledged the difficulty of spelling out every detail at this stage, but warned that leaving Article 4 unchanged risks turning it into “a fleeting illusion to be pursued but never attained” (using a quote from a Bob Marley’s song). Jamaica therefore called for clearer language on how tax cooperation can concretely support sustainable development—particularly for countries facing increasingly frequent climate disasters and the risk of being pushed into a cycle of crisis and debt.

Finally, a third, more intermediate and somewhat ambiguous position emerged: delegations broadly agreed with maintaining high-level drafting, but remained open to adding certain missing elements such as human rights (Mexico, Belgium, Czechia, the Netherlands, Portugal), progressivity and tackling inequalities (Brazil), or gender (Sweden). Some high-income countries expressed interest in removing language on taking into account States’ different responsibilities and capacities (Belgium, Sweden, Portugal), which was defended by the African Group.

Civil society organisations speaking from the floor largely did so to defend a higher level of ambition for Article 4. CESR recalled that this is the only commitment whose wording mirrors that of a principle, and argued that it should therefore reflect a more comprehensive vision—one that connects tax cooperation to structural transformation of economies, extraterritorial obligations, and the mobilisation of resources to realise economic and social rights. Greenpeace stressed the imperative of addressing the environmental and climate dimensions, referenced several Member State interventions calling for progress in that direction, and underscored the need for the text to respond to the realities faced by the States and communities most affected by the climate crisis. In a similar vein, the European Youth Foundation (EYF–EFJ) urged Member States to defend—courageously—a vision of Article 4 that incorporates the environmental dimension in line with the interests of future generations and the principle of common but differentiated responsibilities. FEMNET also highlighted the importance of explicitly addressing the gender dimension of the article.

From a Tax Justice Network perspective, the negotiations on sustainable development reflect encouraging recognition of its centrality to international tax cooperation but expose a gap between rhetoric and actionable commitments.

Developing countries rightly stressed that without concrete reforms—curbing harmful tax practices, ensuring fair taxing rights, and mobilising revenues for public services and climate adaptation—the promise of the Sustainable Development Goals will remain hollow. Civil society amplified this urgency, pointing to vast financing gaps and calling for progressive measures such as taxing polluters and the ultra-wealthy.

Yet many Global North countries leaned toward keeping references at a general level, resisting prescriptive obligations or binding mechanisms. For the Tax Justice Network, progress requires going beyond high-level alignment: embedding enforceable rules that make sustainable development the operational benchmark of tax cooperation. This includes guaranteeing that global tax rules serve as a structural enabler of climate and environmental justice, economic and social rights, and the financing of essential public goods.

From the zero-draft text prepared by the Co-Lead:

Article 8
Harmful Tax Practices

The States Parties shall explore appropriate measures and tools to address harmful tax practices including those that provide for:

(a) enhanced transparency;
(b) monitoring and identifying emerging harmful tax practices; and
(c) the effective taxation of economic activities that benefit from harmful tax practices.

The States Parties shall cooperate, at international and regional levels, to develop and apply common principles and standards to identify harmful tax practices and measures to deter them, enabling all countries to tax income in accordance with their domestic laws and policies.

From the Terms of Reference adopted by the UN:

Commitments

10. The framework convention should include commitments to achieve its objectives. Commitments on the following subjects, inter alia, should be:

(a) Fair allocation of taxing rights, including equitable taxation of multinational enterprises;

(b) Addressing tax evasion and avoidance by high-net worth individuals and ensuring their effective taxation in relevant Member States;

(c) International tax cooperation approaches that will contribute to the achievement of sustainable development in its three dimensions, economic, social and environmental, in a balanced and integrated manner;

(d) Effective mutual administrative assistance in tax matters, including with respect to transparency and exchange of information for tax purposes;

(e) Addressing tax-related illicit financial flows, tax avoidance, tax evasion and harmful tax practices;

(f) Effective prevention and resolution of tax disputes

The Day 3 discussion on Article 8 (Harmful Tax Practices) opened with the Co-Lead noting that the article had been pared back (with fewer descriptive elements) compared to the Nairobi version, before inviting reactions to the streamlined drafting.

From the outset, delegations largely split between those pressing for more operational ambition (especially on implementation, monitoring, and minimum standards) and those urging flexibility, non-duplication, and safeguards for compatibility with domestic restrictions. A particularly ambition-raising set of interventions came from the African Group (Zambia), which welcomed the text but proposed tightening and strengthening it in three key ways. First, it argued paragraph 1 risked being read too narrowly—especially the phrase about “neutralising distorting effects”—and suggested ending the commitment simply at cooperation on harmful practices, to avoid subjective disputes over what counts as “distorting.” Second, it pushed to expand implementation mechanisms, proposing language that Parties should “develop, enhance and implement effective tools and measures,” and emphasised the need for monitoring and identification capacity. Third, it proposed explicitly inserting the idea of effective taxation “at a minimum rate,” with agreement on that minimum to be developed through a protocol or other instrument—an effort to anchor the HTP commitment to a clearer global floor.

Several Member States echoed and converged around parts of that ambition—especially the need to define HTP and strengthen monitoring—while proposing different drafting routes. India supported keeping the door open to definition work (even if not fully settled immediately), and proposed reframing paragraph 1 around identifying HTP that “distort cross-border taxation or erode the tax base of other jurisdictions,” coupled with a simplified paragraph 2 focused on developing and implementing tools for monitoring and identifying HTP. Papua New Guinea went further, arguing that the absence of definition/criteria risks arbitrary application, and suggested specifying criteria (e.g., preferential regimes, ring-fencing, low effective rates, lack of transparency) and adding quantitative thresholds, timelines, and peer-review-type monitoring to make the commitment implementable. In parallel, Russia supported the thrust but proposed anchoring monitoring/identification in “globally accepted criteria,” while also adding an explicit safeguard that the article should not be interpreted as limiting sovereign policy space provided measures are transparent.

A second cluster—largely OECD and like-minded—prioritised avoiding duplication with existing fora, preserving policy and legal domestic restrictions to the scope of cooperation, and resisting overly mandatory language at the framework-convention stage. Germany welcomed the direction of travel and stressed the need to distinguish harmful practices from legitimate, substance-based incentives and to avoid constraining policy choices or duplicating other workstreams/fora. France, Korea, Sweden, Japan, Singapore and others similarly underscored coordination with existing work and the importance of identifying “gaps” rather than recreating parallel systems; many still agreed that some shared understanding/definition of HTP is necessary to commit meaningfully. China objected that “shall develop, enhance and implement” reads as too mandatory given the technical nature of HTP identification, and proposed softening toward “shall explore appropriate measures and tools,” also noting overlap with transparency provisions. Belgium similarly questioned whether certain phrasing truly “limits” the commitment, but raised concern that minimum-tax style language might go beyond what belongs in the Convention text at this stage.

A set of “bridging” interventions largely amounted to repackaging the text in ways that would reduce its operational bite, by narrowing obligations, shifting commitments into softer cooperation language, and postponing substance to later protocols. Norway, for example, argued that the measures listed in paragraph 2 were premature without prior definitional work, and proposed merging and trimming the article into a more general commitment to cooperate to “identify, monitor and deter” harmful practices—an approach that, in practice, would lower the level of commitment and make concrete action more contingent on future processes. Similarly, Canada and Czechia focused on the need for clearer definitions and questioned the intent and necessity of the more specific elements in paragraph 2 (including the meaning of sub-paragraph 2(c)), reinforcing a preference to avoid committing to stronger implementation tools at this stage. Brazil adopted a more balanced tone—signalling it could accept the text while encouraging a shift toward correcting harmful practices—but also cautioned against defining HTP too rigidly, which, depending on how taken up, could still be used to justify keeping the commitment less determinate.

Non-State stakeholders largely intervened to raise ambition and broaden the concept of harm beyond narrow economic effects. CCFD–Terre Solidaire argued that HTP undermine countries’ ability—especially in the Global South—to raise revenues for development, public services, and climate action; warned that “HTP” has been weaponised through blacklisting dynamics that disproportionately target poorer countries; and pointed to evolving forms of tax competition (including the OECD side-by-side agreement) as evidence the Convention needs robust, binding rules rather than voluntary guidance. Dejusticia framed the discussion explicitly through human rights and extraterritorial obligations, citing the principle that States should refrain from tax or financial arrangements that undermine other States’ revenue capacity, and proposed strengthening Article 8 with a clearer definition of HTP—understood as practices that undermine the fairness or effectiveness of another jurisdiction’s tax system—along with clearer high-level actions Parties commit to take.

Published on 22 January 2026, the Co-Lead’s Draft Framework Convention Template updated Article 8 on harmful tax practices to the following text:

From a Tax Justice Network perspective, discussions on illicit financial flows, tax abuse, and harmful tax practices confirm broad recognition of their centrality but also expose sharp divides.

Global South countries stressed the heavy toll of profit shifting, tax havens, and harmful tax competition, calling for binding UN commitments to curb illicit financial flows and ensure accountability through transparency.

By contrast, many Global North states preferred incremental approaches and complementarity with existing OECD tools, resisting prescriptive obligations.

For the Tax Justice Network, genuine progress requires prioritising the creation of key global registries – on beneficial ownership, asset holdings, and public country by country reporting – administered through a UN Centre for Monitoring Taxing Rights or a similar body under the Convention’s Conference of Parties. These are essential first steps to dismantle secrecy and tackle tax-related illicit financial flows.

From the zero-draft text prepared by the Co-Lead:

Article 9
Prevention and Resolution of Tax Disputes

1. The States Parties shall take effective measures, in accordance with its needs, capacities and priorities, to ensure effective prevention and resolution of disputes regarding taxpayers.

2. In furtherance of paragraph 1, the States Parties shall, among other measures,
(a) minimize the potential for disputes by providing clear and accessible legislation and interpretative guidance regarding tax obligations; and
(b) implement dispute resolution mechanisms that are fair, independent, accessible, and effective in resolving disputes in a timely manner for both taxpayers and the tax authorities involved.

From the Terms of Reference adopted by the UN:

Commitments

10. The framework convention should include commitments to achieve its objectives. Commitments on the following subjects, inter alia, should be:

(a) Fair allocation of taxing rights, including equitable taxation of multinational enterprises;

(b) Addressing tax evasion and avoidance by high-net worth individuals and ensuring their effective taxation in relevant Member States;

(c) International tax cooperation approaches that will contribute to the achievement of sustainable development in its three dimensions, economic, social and environmental, in a balanced and integrated manner;

(d) Effective mutual administrative assistance in tax matters, including with respect to transparency and exchange of information for tax purposes;

(e) Addressing tax-related illicit financial flows, tax avoidance, tax evasion and harmful tax practices;

(f) Effective prevention and resolution of tax disputes

On Wednesday and Thursday, countries discussed the commitment on dispute prevention and resolution. The discussion started and stopped with a presentation by the Secretariat on the relationship between the commitment on dispute prevention and resolution, the dispute resolution provisions in the Framework itself and the protocol on dispute prevention and resolution. The session was ended and reconvened the next day to allow country delegates the time to digest the information presented in the presentation.

The presentations by the Secretariat did provide some much-needed clarity on the relationship between various elements on dispute prevention and resolution in the Convention, or at least, it provided clarity on the Secretariat’s views on the matter. In the Secretariat’s view, the dispute resolution provisions that will figure in the Framework Convention itself (cfr. article 20) only target disputes arising from the Convention provisions. These are not necessarily ‘tax disputes’ but disputes between member countries on the interpretation and application of the Convention rules itself. Most importantly, the Secretariat added that it believes the current template draft (which only contains draft text on the commitments) does not include many provisions likely to give rise to such disputes. This view is based on the Secretariat’s underlying assumption that the commitments in the Convention will remain high-level and stop short at being of a prescribing nature or legally enforceable. Over the past days, many countries have suggested as much. However, countries are not yet completely in agreement on this fundamental point, with the current draft text of the commitments containing various elements which can be characterized as being prescriptive. Arguably, the next round of negotiations on the draft text of the commitments will settle this debate. Secondly, both the commitment in disputes in the Convention and the disputes Protocol are believed to target ‘tax disputes’ and these are seen as disputes arising from the application of existing national tax rules, but not rules created under the Convention and its protocols. From the October paper released by the Workstream on the protocol on dispute resolution and prevention, it had already become clear that the current view is that for protocol disputes (like disputes under the services protocol), the rules on dispute resolution are going to be addressed as part of the broader drafting process of those individual protocols.

In general, countries are not yet on the same line on this topic, though. Switzerland and Austria, for example, believed the draft text of the commitment, which is supposed to serve as an anchor for the work going on in the workstream on the protocol on dispute resolution, is not reflective of the work that has been carried out in the workstream. That work is focused heavily on the mutual agreement procedure, arbitration and mediation, but these elements are not reflected in the commitment text. Zambia and the Africa group came to another conclusion: the commitment language needs to be rephrased so the first paragraph of the article clearly reflects that parties commit to take on necessary measures to implement effective measures for the prevention and resolution of cross border tax disputes.

Nigeria, India and Brazil supported Zambia’s proposal to change the wording to make the article sound more like a commitment than it currently does. India also strongly rebuked the draft’s current language which suggests that countries should commit to this topic because avoiding and resolving tax disputes “supports cross-border investment and trade in goods and services”. India pointed out that countries should commit to this topic, not because its support to trade and investment but because effective dispute prevention and resolution is a primary tool for strengthening domestic resource mobilization.

Countries like Norway and Portugal believed the distinction between disputes falling under the Convention’s dispute provisions (article 20) and those falling under the commitment on ‘tax disputes’ may not be so clear-cut as presented by the Secretariat. Those countries generally agreed it was difficult to make progress on this matter without there being draft language proposed on article 20. Countries like China and Sweden warned the commitment should also make clear that domestic tax disputes are not within the realm of the Convention. Jamaica countered this point by noting that many small development countries do not have wide treaty networks to support cross border dispute mechanisms and for many of those countries cross border taxes are not the major form of revenue. As such, for these countries, it is relevant to also focus on improving domestic dispute resolution mechanisms. Nigeria supported this view by noting that the commitment expected by countries in the Terms of Reference is to take action to better dispute resolution generally, and not merely the resolution of certain cross-border tax disputes.

Finally, Uganda suggested for countries to expand their commitment on dispute resolution with the commitment to publish dispute resolution decisions. Publication may require anonymization, yet more transparency is helpful so that countries can rely on other countries’ know how and resolution outcomes to settle similar cross-border tax issues. With this intervention, Uganda hit the nail on the head on one of the crucial flaws of the current international regime for dispute resolution of cross-border tax disputes. Unlike in judicial dispute settlement, dispute settlements in tax (known as the mutual agreement procedure or MAP) between two tax authorities are not published. Publication of disputes is however key to prevent future disputes by learning from previously settled disputes. Such ‘learning’ from disputes for the sake of preventing disputes is completely absent in the confidential procedure which is the MAP. Uganda should be supported in its quest to change this state of affairs.

From the Tax Justice Network perspective, negotiations on dispute prevention and resolution highlight the huge gaps faced by jurisdictions with small or no treaty networks, which leaves them unable to resolve disputes that are often costly and inaccessible under current mechanisms. The Tax Justice Network emphasises that prevention must be the priority: simplifying rules, moving toward unitary taxation to reduce the root causes of disputes, and creating inclusive, transparent mechanisms under the Convention (for example via a dispute resolution body under the COP) that ensure all countries have fair access. The UN Model’s emerging norms—such as limiting the role of investment treaty arbitration when it undermines tax treaty intent—are promising precedents. However, many Global North delegations still favour non-binding, high-level language and optional mechanisms, and tend to prioritize options like arbitration, which risk reinforcing power asymmetries in the procedure but also privilege Global North country interpretations of transfer pricing and other rules on the cross-border allocation of the tax base. The Tax Justice Network therefore advocates using the opportunity of the Convention to establish a common normative ground for resolving cross-border disputes in function of the principles of the framework, including resource mobilisation, so that dispute systems strengthen certainty, simplicity and fairness.

From the zero-draft text prepared by the Co-Lead:

From the Terms of Reference adopted by the UN:

Protocols

14. Protocols are separate legally binding instruments, under the framework convention, to implement or elaborate the framework convention. Each party to the framework convention should have the option whether or not to become party to a protocol on any substantive tax issues, either at the time they become party to the framework convention or later.

15. Two early protocols should be developed simultaneously with the framework convention. One of the early protocols should address taxation of income derived from the provision of cross-border services in an increasingly digitalized and globalized economy.

16. The subject of the second early protocol should be decided at the organizational session of the intergovernmental negotiating committee and should be drawn from the following specific priority areas:

(a) Taxation of the digitalized economy
(b) Measures against tax-related illicit financial flows
(c) Prevention and resolution of tax disputes
(d) Addressing tax evasion and avoidance by high-net worth individuals and ensuring their effective taxation in relevant Member States

17. Protocols addressing the following topics, inter alia, could be considered:

(a) Tax cooperation on environmental challenges
(b) Exchange of information for tax purposes
(c) Mutual administrative assistance on tax matters
(d) Harmful tax practices

Wednesday 11 February 2026 was the third and find consecutive day that delegates focused their attention on Services Protocol. The negotiations covered the remaining element for discussion of the Co-Lead’s Draft Options Paper. This element was the matter of ‘implementation’ of the Protocol.

Implementation

As the Co-Lead explained, many countries have argued in favour of revisions of the current rules on the taxation of cross-border services because the current rules are marred with imbalances between countries. The current rules are contained in the existing bilateral tax treaties. The Protocol provides countries with the opportunity to devise a multilateral process to allow more rapid implementation of changes than through bilateral negotiations.

The question submitted to the delegates was whether the Protocol should remain silent on the interface with bilateral tax treaties and thus leave implementation to bilateral negotiations, or whether its rules should be granted priority in case of a conflict of norms. An intermediary solution may be the adoption of matching system similar to the OECD Multilateral Instrument on BEPS (MLI). Under the MLI, countries assign those bilateral tax treaties they want to see changed by the new rules and these new rules are then imposed as an overlay on ‘covered’ bilateral tax treaties if both treaty partners have listed the treaty and there is a match. The UN Tax Committee has recently developed a proposal for a similar instrument, known as the Fast-Track Instrument (FTI) which operates in similar fashion as the MLI but imposes change through the addition of standardized amending protocols to existing bilateral tax treaties.

Country opinions were divided. India believed the first option is to be preferred. The MLI option only makes sense if countries have roughly equal amount of tax treaties in place, which is not the case. Some countries have over 120 bilateral tax treaties in place, other countries present have only a handful of treaties or less. An MLI ‘matching system’ does not help these countries. Nigeria and Israel added that previous experience revealed that MLI type solutions are incredibly complex and difficult to understand, including for the taxpayer. Norway agreed, noting that the UN Tax Committee’s FTI proposal is equally complex. The Co-Lead brought some nuance by noting that the MLI experience across countries seemed to be mixed, as there were also countries that had found the mechanism to be without problems.

Saudi Arabia, in contrast to India, noted that the first option of doing nothing and leaving change to bilateral negotiations would likely not deliver meaningful results. On the other hand, an automatic override of all relevant bilateral treaty provisions may also raise concerns. The MLI approach therefore seemed to be the least problematic way forward.

Kenya and Ghana, in turn, refused to accept a dismissal of the automatic override option. Kenya was adamant that the Protocol should supersede relevant existing bilateral tax treaty rules. Legally speaking, such an approach would be in line with the principles of customary international law, as enshrined in article 33 of the Vienna Convention on the Law of Treaties.

While automatic override may very well be legally sound, Switzerland’s subsequent response showed that its adoption as a solution in the Protocol largely depends on countries’ political will to achieve change. In the Swiss delegate’s view, an automatic override by the Protocol would drastically reduce the number of countries that would sign on to the Protocol as an automatic override would risk upsetting the ‘balance’ of bilateral tax treaty which was carefully crafted through bilateral negotiations. Countries should at least be allowed to assign which treaties they want to see changed, and that can only be achieved through an MLI like approach. China, too, noted that a bilateral tax treaty reflects a balance of concessions which is unique and delicate and which is based on individual bilateral relationships. China believed that flexibility in the implementation methods was therefore a must. Canada and France also expressed unwillingness to automatically let go of what they see as ‘balanced’ tax treaties for the sake of a what many other countries see as a fair allocation of taxing rights. Sierra Leone, for example, noted that there is nothing ‘balanced’ about tax treaties with developing countries that have negotiated in situations of asymmetric bargaining power. Sierra Leone added that a hybrid implementation approach whereby the Protocol establishes clear rules of precedence in case of conflicts with tax treaties while allowing narrowly defined reservations and transitional arrangements may be an option to consider. Any implementation mechanism must recognize the limited administrative and negotiating capacity of many developing countries. Zambia agreed and expressed its disagreement with implementation approaches that would involve bilateral (re)negotiation as these negotiations would risk to undermine coherence and consistency of implementation. A automatic override of both domestic and tax treaty law is the only meaningful way forward. Brazil concurred with this point: even for a large country like Brazil obtaining source taxation of cross-border services income is difficult and often comes at a high cost. A multilateral negotiation and implementation is needed to change these negotiation dynamics. Also, if more countries accept these new rules and a new level playing field is created, countries may be more willing to accept the new rules.

A final issue that left delegates with many question with was the implementation of the Protocol in situations where there is no tax treaty in force. Belgium, for example, expressed doubt on how the Protocol could play a role in no-treaty situations. Ghana responded by noting that the point of the Protocol is to create a multilateral instrument that covers all countries, and not just those with tax treaties. Whether country has many or few tax treaties should not matter. In line with the spirit of inclusiveness that carries the whole of the Framework Convention itself, the Protocol should cater to the needs of all countries.

With this final debate, three intensive days of intense negotiations on one of the most challenging topics of current international tax policy came to an end. Progress may seem slow and difficult, but then again, it took the OECD ten years to fail the exact same challenge. The UN process is therefore due some more time before judgement day comes. 

The negotiations continued on Tuesday 10 February with the discussions of Protocol 1 on cross-border services, and more specifically on the nexus between country and taxable income from services.

India was keen to build on the yesterday’s consensus among countries that different type of service may require different nexus rules and provided a classification of services in four classes. A first class of services occurs with physical presence of the service provider, like the case of construction, installation or maintenance activities. The second class of services are services that are delivered remotely but in the country from which they are delivered there is a strong human intervention. Software development by an entity residing in India and providing services to an overseas affiliate is a clear example. Often, these services transactions will be subject to transfer pricing rules. The third class of services are those remote services that require no or very little human intervention, like streaming services, cloud computing, online advertising and so on. These are heavily automated services. The fourth class of services are the services provided by digital platforms, like ride hailing services and other gig economy platforms. The Indian delegate added that differentiation of services can also be made as to whether they are B2C or B2B services and in function of the general level of profitability or in function value creation, whether market facing or not.

Switzerland added that it mainly saw two different types of services: those that involve physical presence and those that do not involve physical presence. Scalability of business models may also be a factor to consider, as scalability often goes hand in hand with high profitability and thus with more justification for shared taxing rights.

Kenya took the debate a step further applying the different nexus options to the categories of services proposed by the Indian delegate. Three nexus options had been identified in yesterday’s discussions: payment or remittance, market engagement and physical presence. The Kenyan delegate noted that the first class of services – services which entail physical presence – the physical presence nexus should be sufficient. However, the current permanent establishment threshold may not be adequate and reduced temporal thresholds for presence may be necessary. For the second class of remote services with human involvement, a mix of nexus may be needed because both payor and user/recipient of the service may be relevant. For automated digital services and platform services too both payor and user nexus are relevant.

Other countries were not so convinced with the Indian and Kenyan view on categories and relevant nexus. Italy, for example, hammered on the relevance of capital and intangible location as an important nexus, although the Italian delegate did admit that in some business models, users are an important value driver. Norway shared some of the Italian criticism by noting that more analysis is needed of different service business models before making decisions on appropriate nexus rules. France relied on examples of international transport services and remote services by an architect to support its claim that lower thresholds on the physical presence nexus are difficult to conceive.

Countries agreed they would revisit the complex topic of nexus rules in a later stage of the negotiations.

Method of taxation

Next, country delegates discussed the appropriate method of taxation for income from services with nexus to a particular country. Possible methods range from a withholding tax on gross payments for services to taxation of net income from services, which implies deduction of expenses and offsetting of previous losses.

Nigeria noted that gross taxation by withholding fits well with the payor nexus. It may not be suitable for other types of nexus, though. France believed that even when gross taxation by withholding is a suitable method, like in the case of payor nexus, taxpayers should be entitled to net taxation. The Co-Lead chimed in on this by noting that the UN Model provides rules on services by which net taxation in line with the permanent establishment threshold and gross taxation on service fee payments work in parallel as alternatives. The Co-Lead also noted that net taxation may be more fair and equitable because it allows expense deduction and loss offsetting but it comes with a higher administrative burden.

Canada, Switzerland and Italy referred to a recent consultancy paper by the business interest lobby that makes the claim that withholding taxes on services, on aggregate, have a negative economic effect on countries and their foreign investment numbers. The Co-Chair was not so convinced by these findings in light of her own country experience and noted that individual countries have individual situations to deal with, making aggregate findings less relevant. Singapore agreed gross taxation may impede cross-border trade and investment and believed net taxation was the only fair method as gross taxation risks leading to over-taxation, thereby breaching the ability to pay principle.

The Co-Lead noted that some of the countries that rejected the prospect of gross taxation by withholding where also countries that have implemented digital services taxes (DSTs), which, economically speaking, have the same effect as gross taxation if not worse. She wondered about the economic impact of those taxes. The Canadian delegated avoided the question by noting the crux of the matter is the provision of an optional mechanism for net taxation so taxpayers can elect the method that fits best with their business. On the issue of optionality, Austria noted that its DST is a tax on gross without the option for net taxation. On the other hand, under Austrian income tax, there are situations in which non-residents are forced to declare taxes and are assessed on net basis.

The Co-Lead closed the meeting by noting that tomorrow’s negotiations will cover the final sub-topic of implementation while also revisit the nexus topic.

Belgium advocated for an express exemption of the international transport industry from the new protocol, ignoring the previous consensus that the purpose of the protocol is to cover all services.

The second week of negotiations kicked off with the heavily anticipated discussions on Protocol 1 on ‘Taxation of income derived from the provision of cross-border services in an increasingly digitalized and globalized economy’. The Co-Lead of Workstream 2, Liselott Kana, presented the Co-Lead’s Draft Options Paper. This recent discussion paper provides for possible directions for the protocol to take with regard to scope of taxes covered, nexus rules employed, method of taxation (gross or net) and questions of implementation, especially regarding the interface between the protocol and existing tax treaties. The Co-Lead emphasized the need to move from options to solutions.

Scope of taxes covered

With regard to the first subtopic of the day, the scope of the protocol, solutions were not easily found. The Co-Lead’s paper proposed for the protocol to cover taxes on income and other taxes with the same economic effect but without going into strict categorization of taxes covered and not covered. As explained by the Co-Lead, the purpose is to take a comprehensive approach to the taxation of income or revenue from cross-border services which, as the current country practice of DSTs shows, is not limited to income taxes in the strict sense. Countries should avoid the current situation where one treaty partner believes a tax on services is not covered by their tax treaty because it is strictly speaking not an income tax whereas its treaty partner believe the tax is covered because it is an income tax by any other name.

Countries like Nigeria, India and and Ghana agreed this approach was sensible. Other countries were not as convinced. The United Kingdom, for example, believed the purpose of the protocol was to review certain limits imposed by existing tax treaties and tax treaties only cover income taxes so dealing with non-income taxes seemed a bridge too far. Estonia and Germany urged caution regarding the possible coverage of VAT. Germany believed the protocol should not necessarily be restricted to income taxes. However, clear criteria are needed to define what type of quasi-income taxes are covered to avoid a blanket clause which covers all kinds of taxes. The Co-Lead responded the protocol was not intended to cover a genuine VAT but the coverage of VAT charge engineered to have a similar effect as an income tax should not be excluded. Kenya and Ghana agreed, with the latter noting that a VAT is a tax on consumers, not on service providers and thus fundamentally out of scope.

Canada, Belgium and Italy would not want to commit to a wide scope for the protocol without first establishing the nexus rules for the taxation of income from services. These countries would only want to discuss scope after discussing nexus rules. The Co-Lead rebuked this suggestion as in her view, the purpose of the work is to come with a comprehensive solution for the taxation of services. This cannot be achieved if the discussion on scope is determined by the outcome of the discussion on nexus.

Nigeria strongly agreed with the Co-Lead’s view: tax laws and tax treaties starts by defining the scope of what is covered. This should not be different in the case of this protocol.

To avoid the discussions falling into a semantic rabbit hole, the Co-Lead move the conversation on to the next sub-topic, which is the scope of services covered.

Scope of services covered

On this topic, there was more consensus among delegates. Countries generally agreed that the protocol should have a broad scope and cover all services. An additional question, however, is whether the protocol should differentiate between different kind of services for the sake of applying different nexus rules or rates.

The African Group noted that it was not adverse to the idea of structured classification and categorization of different kind of services but it would need to see the proposed categorization to determine whether it would be acceptable or not. India, drawing from its experience governing a vast services economy, noted that differentiating is simply unavoidable. Switzerland agreed, especially if gross taxation would be contemplated as a solution, given that different services come with different profit margins.

Canada noted that studies like the recent ICC study on the impact of Article 12AA of the UN Model seemed to show that the taxation of certain types of services may not be beneficial, making differentiation relevant. Norway agreed that any solution contemplated should effectively deliver on domestic resource mobilization.

The Co-Lead responded rather than focusing on treaties with or without 12AA, a often ignored fact is that many countries simply opt not to conclude tax treaties at all because they think the model rules are not in their national interests. The protocol should also appeal to those countries. The Belgian delegate expressed disbelief regarding certain countries’ negative attitude towards the models and emphasized that everybody knows (sic.) that tax treaties are important to attract foreign investment. The Co-Lead responded that the group of countries that does not engage in the signing of tax treaties is big and this fact should not be downplayed.

The second week of negotiations of the Fourth Session kicked off on Monday 9 February 2026 with the heavily anticipated discussions on Protocol 1 on ‘Taxation of income derived from the provision of cross-border services in an increasingly digitalized and globalized economy’. The Co-Lead of Workstream 2, Liselott Kana, presented the Co-Lead’s Draft Options Paper. This recent discussion paper provides for possible directions for the protocol to take with regard to scope of taxes covered, nexus rules employed, method of taxation (gross or net) and questions of implementation, especially regarding the interface between the protocol and existing tax treaties. The Co-Lead emphasized the need to move from options to solutions.

Scope of taxes covered

With regard to the first subtopic of the day, the scope of the protocol, solutions were not easily found. The Co-Lead’s paper proposed for the protocol to cover taxes on income and other taxes with the same economic effect but without going into strict categorization of taxes covered and not covered. As explained by the Co-Lead, the purpose is to take a comprehensive approach to the taxation of income or revenue from cross-border services which, as the current country practice of DSTs shows, is not limited to income taxes in the strict sense. Countries should avoid the current situation where one treaty partner believes a tax on services is not covered by their tax treaty because it is strictly speaking not an income tax whereas its treaty partner believe the tax is covered because it is an income tax by any other name.

Countries like Nigeria, India and and Ghana agreed this approach was sensible. Other countries were not as convinced. The United Kingdom, for example, believed the purpose of the protocol was to review certain limits imposed by existing tax treaties and tax treaties only cover income taxes so dealing with non-income taxes seemed a bridge too far. Estonia and Germany urged caution regarding the possible coverage of VAT. Germany believed the protocol should not necessarily be restricted to income taxes. However, clear criteria are needed to define what type of quasi-income taxes are covered to avoid a blanket clause which covers all kinds of taxes. The Co-Lead responded the protocol was not intended to cover a genuine VAT but the coverage of VAT charge engineered to have a similar effect as an income tax should not be excluded. Kenya and Ghana agreed, with the latter noting that a VAT is a tax on consumers, not on service providers and thus fundamentally out of scope.

Canada, Belgium and Italy would not want to commit to a wide scope for the protocol without first establishing the nexus rules for the taxation of income from services. These countries would only want to discuss scope after discussing nexus rules. The Co-Lead rebuked this suggestion as in her view, the purpose of the work is to come with a comprehensive solution for the taxation of services. This cannot be achieved if the discussion on scope is determined by the outcome of the discussion on nexus.

Nigeria strongly agreed with the Co-Lead’s view: tax laws and tax treaties starts by defining the scope of what is covered. This should not be different in the case of this protocol.

To avoid the discussions falling into a semantic rabbit hole, the Co-Lead move the conversation on to the next sub-topic, which is the scope of services covered.

Scope of services covered

On this topic, there was more consensus among delegates. Countries generally agreed that the protocol should have a broad scope and cover all services. An additional question, however, is whether the protocol should differentiate between different kind of services for the sake of applying different nexus rules or rates.

The African Group noted that it was not adverse to the idea of structured classification and categorization of different kind of services but it would need to see the proposed categorization to determine whether it would be acceptable or not. India, drawing from its experience governing a vast services economy, noted that differentiating is simply unavoidable. Switzerland agreed, especially if gross taxation would be contemplated as a solution, given that different services come with different profit margins.

Canada noted that studies like the recent ICC study on the impact of Article 12AA of the UN Model seemed to show that the taxation of certain types of services may not be beneficial, making differentiation relevant. Norway agreed that any solution contemplated should effectively deliver on domestic resource mobilization.

The Co-Lead responded rather than focusing on treaties with or without 12AA, an often ignored fact is that many countries simply opt not to conclude tax treaties at all because they think the model rules are not in their national interests. The protocol should also appeal to those countries. The Belgian delegate expressed disbelief regarding certain countries’ negative attitude towards the models and emphasized that everybody knows (sic.) that tax treaties are important to attract foreign investment. The Co-Lead responded that the group of countries that does not engage in the signing of tax treaties is big and this fact should not be downplayed.

Nexus

Next, the discussions moved on to the topic of ‘nexus’, namely the question regarding the parameters of connection between country and income from services that determine whether the country can tax such income. The Co-Lead asked delegates for views on the payment nexus, the physical-presence nexus and the economic/market nexus.

The African Group strongly supported a protocol that covers all services with different nexus rules for different categories of services. Services rendered physically should follow the physical presence nexus. Automated digital services require a new types of nexus, such as user location. Italy believed however that the consumer itself does not contribute to economic value creation. Only when the consumer or user contributes to value creation by providing data, granting nexus is appropriate.

Kenya disagreed with the Italian point. Current nexus rules are heavily skewed towards supply based factors. Value creation is also provided by demand based factors, and these are the consumers. India believed the concept of value creation is a complicated one, as it means different things in different business circumstances: is value created by Indian engineers developing software or by offshore superiors signing off the engineers’ decision or managing the business.

With regard to physical presence, countries like the United Kingdom, Italy, Japan and Canada hammered on the continued relevance of the permanent establishment rule and cautioned against undue changes to this fundamental nexus concept. This led to the Co-Lead cautioning those states not gloss over the fact that countries across the room have varied views on what conceives a PE. Kenya added that the current physical presence PE concept is also not without problems: setting up a very temporary event that generates billions of revenue clearly involves physical presence but will most likely not trigger PE status. Zambia added that the current physical presence PE concept is based on thresholds which give rise to tremendous avoidance behavior through fragmentation of activities and structuring. Rather, it would be better to focus the nexus on economic participation in the market.

Saudi Arabia agreed the physical presence nexus is relevant for traditional services that cannot be delivered remotely. For remote services, the traditional permanent establishment thresholds no longer capture a meaningful economic participation. For those services, shorter duration thresholds are required and it may be needed to consider different types of nexus in line with the types of service at hand. For online advertisement services, for example, the relevant link may be the location of the viewers of the advertisement.

Saudi Arabia also raised the important question of the interplay of various nexus rules, wondering whether the protocol envisages a type of hierarchy of nexus rules or parallel operation of nexus rules, granting taxing rights to various ‘source countries’ on the same income from services. The Chines delegate chimed in on this point, noting that agreeing on various nexus claims in a bilateral context is often challenging. This made him wonder how the conflict of overlapping nexus claims can be solved in a multilateral setting where there are many more stakeholders and countries involved and which will all demand to be taken into consideration.

Jamaica agreed that there may be different nexus rules for different types of services but wondered whether, in the context of (the draft) Article 5 of the Framework Convention, there was a need to determine which elements of the possible nexus would constitute a fair allocation of taxing rights. If different nexus rules could potentially apply, the one that grants a fair allocation should prevail.

All in all, it was a tense first day of negotiations on Protocol 1. As Muhammed Ali once said: “It isn’t the mountains ahead that wear you out, it’s the pebble in your shoe”. As the first day of negotiations showed, lot’s of pebbles in the Co-Lead and the delegates’ shoes to be dealt with on the road to success in this protocol.

Our Senior Comparative Policy & Legal Analyst Bob Michel published an analysis on the protocol here. The abstract from the analysis is reproduced below:

Abstract

On 20 July 2026, the Co-Lead of Workstream 2 on the Protocol on the Taxation of Income from Cross-Border Services released the draft text of the protocol, the first protocol under the upcoming United Nations Framework Convention on International Tax Negotiation (UNFICTC).

In this primer, the author looks at what’s what in the twenty-two articles that make up the heavily anticipated protocol draft. The purpose of this to report is to unpack the in’s and out’s of the draft proposal for a wider audience, making up for the fact that the draft has been proposed without a formal ‘commentary’ or ‘technical explanation’. To judge the draft proposal’s on its merits, it is therefore useful to gather a better technical understanding of its proposed rules and their implications or shortcomings.

Structurally, the draft proposal looks like a stylized and multilateral version of a standard bilateral tax treaty. It contains the full tax treaty infrastructure, ranging from provisions on scope (taxes and taxpayers are covered), definitions, distributional rules that determine which country restricts its power to tax, rules on relief of double taxation in case of overlapping taxing claims, and special provisions on dispute settlement and administrative assistance.

While the release of the protocol text is an important moment in the negotiations, it is very much a zero-draft meant to be kneaded and kneaded again in the upcoming negotiation sessions.

The paper goes over the provisions of the draft protocol to give some context and to identify some important novelties and gaps that those negotiations may need to fill.

Read the full analysis here.

From the Tax Justice Network’s perspective, negotiations on the protocol for taxing cross-border services made important headway by placing the need for predictable global rules for all types of services at the centre of the debate. However, they also revealed how far consensus remains.

Developing countries called for clear, low, gross-basis rates to protect source taxation and secure much-needed revenue. Many developed countries, by contrast, favoured net taxation and greater flexibility to maintain consistency with existing OECD treaty practice.

This divide reflects deeper structural imbalances in international tax rules — rules that have long deprived source countries of the ability to tax services and often failed to ensure that the countries where services are performed receive a fair share of tax revenue.

As the Tax Justice Network stressed in its submission, the protocol should not be limited to narrow fixes. It must lay the foundation for a multilateral system that replaces outdated nexus rules and complex transfer pricing with approaches that treat multinational companies as unitary entities and allocate profits according to real economic activity.

To make this possible, the protocol should retain a broad scope that captures all relevant services and introduce new nexus rules that move beyond the outdated requirement of physical presence. There is also a need to rebalance taxing rights towards source and market jurisdictions.

The ultimate test will be whether the protocol creates a future-proof system that prevents treaty shopping, secures taxing rights for the Global South, and supports domestic resource mobilisation for sustainable development.

From the zero-draft text prepared by the Co-Lead:

From the Terms of Reference adopted by the UN:

Protocols

14. Protocols are separate legally binding instruments, under the framework convention, to implement or elaborate the framework convention. Each party to the framework convention should have the option whether or not to become party to a protocol on any substantive tax issues, either at the time they become party to the framework convention or later.

15. Two early protocols should be developed simultaneously with the framework convention. One of the early protocols should address taxation of income derived from the provision of cross-border services in an increasingly digitalized and globalized economy.

16. The subject of the second early protocol should be decided at the organizational session of the intergovernmental negotiating committee and should be drawn from the following specific priority areas:

(a) Taxation of the digitalized economy
(b) Measures against tax-related illicit financial flows
(c) Prevention and resolution of tax disputes
(d) Addressing tax evasion and avoidance by high-net worth individuals and ensuring their effective taxation in relevant Member States

17. Protocols addressing the following topics, inter alia, could be considered:

(a) Tax cooperation on environmental challenges
(b) Exchange of information for tax purposes
(c) Mutual administrative assistance on tax matters
(d) Harmful tax practices

Protocol 2 – Resolving the disputes on dispute prevention and resolution

The final three days of the Fourth Session of negotiations of the United Nations Framework Convention on International Tax Cooperation (UNFCITC) were dedicated Workstream 3 on ‘dispute resolution and prevention’.

The negotiations started with the Co-Leads presented the Workstream’s recent Concept Note on Potential Approaches and Elements for the Draft Protocol. The Co-Leads explained that they were intending to take Session’s negotiations as the final discussions before embarking on the creating of a ‘zero-draft’ of the Protocol. In line with the Concept Note and the questions formulated in said paper, the discussions would be structured around five themes: optionality, scope, dispute prevention mechanisms, dispute resolution mechanisms and access to information

Menu of options and optionality

Delegates were asked whether they agreed with the listed menu of dispute resolution and prevention mechanisms in the Concept Note or whether they wanted to see certain mechanisms added or removed. The suggested dispute prevention mechanisms include APAs, advanced rulings not related to transfer pricing, cooperative compliance arrangements, simultaneous audits and joint audits. The dispute resolution mechanisms include MAP, conciliation, mediation and arbitration.

Countries generally agreed that the listed mechanisms were sufficient, if not a bit too ambitious in number. As India noted that the current list is already ambitious enough as each of the mechanisms will have to be fleshed out in detail. UAE agreed and urged to put the priority on those mechanisms that are already widely used and understood by countries. Additional mechanisms could be considered in a later stage.

Various countries including China, India, Switzerland believed that the dispute prevention mechanism of ‘simultaneous audits’ should be removed as this was more a matter of administrative assistance and exchange of information than of dispute prevention.

Like in previous Sessions, countries generally agreed the Protocol should provide options, although Zambia did add that excessive use of optionality in the Protocol could give rise to procedural complexity. Optionality should therefore be balanced and clearly structured and be combined with minimum standards.

Scope

With regard to scope, delegates were asked whether the Protocol should come with a definition of ‘cross-border tax dispute’ to which the Protocol’s mechanisms could be applied and also whether the Protocol should come with a dispute resolution mechanism that can be applied in the absence of an applicable bilateral tax treaty.

Opinions were divided. Like the Co-Leads, certain countries believed that a definition was unnecessary. The African Group agreed that an exhaustive legal definition was unnecessary and that the Protocol should rely on common objective features of disputes to determine the scope of the Protocol. India pointed out that the omission of a definition would lead to doubts and possible conflicts regarding to the entire Protocol. The United Kingdom agreed and added that a definition will also be important to provide clarity for the taxpayer on the usability of the Protocol.

With regard to the inclusion of a mechanism for non-treaty situations, many countries expressed doubts. Saudi Arabia reiterated that in the absence of a common legal basis or no clear allocation rules, it remains difficult to fathom such a mechanism. A non-treaty mechanism would have to be limited to a function of coordination or facilitation or information exchange and with limited ability to resolve disputes. UAE believed discussions and cooperations outside treaties should be left entirely to domestic law. The African Group too believed that disputes in a non-treaty context should be dealt with under domestic law. The conference of parties could develop best practices for approaching such disputes. Ghana agreed that without a common legal basis, it is difficult to be able to bring the dispute within the scope of the Protocol.

Singapore too saw value in exploring the option of a mechanism in non-treaty situations. Singapore noted that tax issues with cross-border implications arise also in case there are no applicable tax treaties. Ireland agreed that an option for a consultative mechanism for such cases should be considered. Italy suggested to explore whether a minimalistic common legal ground could be added by inserting optional substantive rules in the Protocol.

After the Italian intervention on the creation of a legal ground, the Co-Leads were quick to point out that Concept Note clearly stated that the envisioned non-treaty mechanism would not create new substantive obligations and would not come with the reallocation of taxing rights. They emphasized that the goal of the Protocol is to offer solutions with added value to all potential signatories, with or without tax treaties in place. In the large majority of bilateral relations between UN member countries, there is no tax treaty in place. Also in these relationships tax disputes arise and taxpayers seek tax certainty, although in such cases ‘dispute’ may have to be understood in a wider sense, rather than in the formal meaning. The non-treaty mechanism can therefore be seen as a preventive measure which can serve to avoid conflicts escalating in to full blown domestic tax disputes.

Dispute prevention mechanisms

Regarding the dispute prevention mechanisms, the Co-Leads were hoping to hear from delegates whether the descriptions given in the paper would provide a sufficient basis for the drafting work to start. Drafting would aim to articulate a clear legal basis and define scope and purpose for each of the mechanisms.

Countries generally agreed there was a sufficient basis to start the drafting. Germany generally believed it would be sensible to build on well-known mechanisms that have already proven useful in practice. Unlike certain other countries that had argued against a Protocol provision on simultaneous and joint audits, Germany believed the Protocol should include its own provision for cross-border administrative cooperation in the field of tax dispute prevention.

With regard to APAs, India believed a harmonized approach to APA programs might stumble on the fact that there are quite a few divergences across current domestic APA rules. It needs to be seen to what extent these divergences could be streamlined in a Protocol version of the mechanism. Germany saw a great benefit in extending bilateral and multilateral APA facilities to no-treaty situations by means of a coordination mechanism. Egypt advised against work on such a mechanism as it would be fundamentally unable to eliminate the risk of double taxation. Also, not all related cross-border transactions qualify to be subject to an APA. Contrary to many other countries, Egypt therefore believed simultaneous audits may offer a more practical and relevant option as it can build on the existing auditing function without requiring building new capacity or hiring specialized transfer pricing expertise.

Capacity building was generally also seen as an important aspect of making sure countries would effectively be able to use the dispute prevention mechanisms developed under the Protocol. Nigeria, on behalf of the African Group, stated that it was important for the Protocol not to fail at implementing the high-level commitment on capacity building in the Framework Convention on the specific topic of dispute prevention. Zambia, on the other hand noted that given the commitment of capacity building in the Framework Convention, there was no need to specifically cover it again in the Protocol which should be dedicated exclusively to dispute prevention and resolution.

Dispute resolution mechanisms

With regard to the Mutual Agreement Procedure (MAP), countries generally agreed that article 25 (Alternative A) of the UN Model can serve as a point of departure for the mechanism in the Protocol. Nigeria explained that Alternative B cannot serve as a model because that provision comes with mandatory binding MAP arbitration. Nigeria added that the MAP mechanism should be expanded further by adding timelines. MAP could also be strengthened through regional workshops and knowledge sharing. The UN should be relied on as a platform for the collection and publication of high-level anonymized data on MAP cases, timelines, outcomes and bottlenecks. The UN could be used as a facilitator for dialogue under mediation and conciliation through a roster of qualified third party experts.

Germany supported the work on conciliation and mediation, with the added caveat that these new mechanisms should in any case be designed so that they do not prolong the MAP process. Italy, too, emphasized the importance of setting clear timelines.

India noted that, like many countries, it has little experience with all three mechanisms – mediation, conciliation and arbitration – so there is no real point of reference to work from. India also questioned the general feasibility of these three mechanisms.

Earlier in the negotiations on the Protocol, the African Group had already reiterated its longstanding position that arbitration had no place in the Protocol. They believed this mechanism entails the transfer of decision-making powers in tax matters to external actors, which was seen as an unacceptable intrusion into countries’ fiscal sovereignty. Arbitration often leads to outcomes that reflect power dynamics instead of fairness. Malaysia also remained cautious about mandatory arbitration and proposed to focus instead of enhancing MAP by introducing clear timelines and a multilateral mediation option. Malaysia believed this would ensure tax disputes are resolved by tax experts who understand the local economic context rather than third party arbitrators. China noted that the priority should be to put focus on those mechanisms that are commonly recognized like MAP.

A handful of OECD countries supportive of MAP arbitration reiterated their support for for including the mechanism in the Protocol. Germany noted that through careful design, an arbitration mechanism can be created that provides the necessary safeguards and achieves predictable dispute resolution outcomes Germany and Italy believed the backstop function of MAP arbitration was important to put pressure on countries to resolve their MAPs. Austria referred to the EU Dispute Resolution as a possible basis for the drafting for the arbitration mechanisms. Switzerland believed that by design of the arbitration procedure, countries should be able to move past the fear of losing sovereignty.

In the end of the session, Germany, Switzerland, Austria and Italy all emphasized the point that mandatory binding MAP arbitration should be distinguished from investor-state arbitration. Countries opposing MAP arbitration often cited negative experience in investor-state arbitration as one of the key reasons to keep MAP arbitration out of the Protocol. The pro-arbitration countries believed the reluctancy was not entirely justified as investor arbitration is a markedly different mechanism and procedure.

The United Kingdom aligned with the latter countries’ view, while emphasizing that it appreciated the negative experiences of countries with investment arbitration. The United Kingdom noted that, as a matter of fact, it shared many of these concerns with investment arbitration and the UK’s policy is therefore to make sure that disputes relation to tax investigation and wider tax policy are, wherever possible, decided by tax experts and kept outside of trade and investment agreements. The UK expressed its willingness to all delegations and stakeholders to address concerns with MAP arbitration and was keen to consider suggestions to improve their design to maximize their inclusivity, effectiveness and adoption. The UK added that this could also include exploring provisions that clarity the interaction between tax, trade and investment agreements in future inter-sessional discussions.

Access to information

The final part of the negotiations of Protocol 2, countries were invited to discuss two aspects of information access for the purpose of dispute resolution and prevention.

The first aspect was the creation of a database with aggregated data on APAs and MAP case like statistical information as well as high level case summaries and compilations of relevant tax administration guidelines and court decisions.

Country delegates did not address this specific aspect.

The second aspect was the creation of transfer pricing database with pricing information on regional transactions that could serve for the assessment of companies’ transfer pricing comparability analyses. A UN managed database could counterbalance the limited access to such information faced by certain countries. Current commercial databases do not have comprehensive regional coverage and often fail on the quality of information they contain. Lack of access to the relevant creates unfavorable information asymmetries between tax administrations and taxpayers.

Brazil was supportive of the idea but emphasized the need to clearly diagnose the problem that the database intends to solve, whether it is about the lack of funds to access commercial databases, whether it is a problem of taxpayer confidentiality which makes it difficult to create quality data or whether it is a problem of a lack of commercial offer given the lack of demand for such a product in certain regions.

Norway noted that the UN Tax Committee’s Subcommittee on Transfer Pricing and the Platform for Collaboration on Tax have done a lot of work already on these issues and their outputs should be consulted.

India noted that a transfer pricing database would be extremely useful also for the purpose of increasing the effectiveness of other mechanisms under the Protocol, like MAP or APA. Mauritius, too, believed such a tool would be extremely useful, even tough strict taxpayer confidentiality safeguards are necessary.

Portugal believed there was simply too little time to embark on the setting up of a transfer pricing database within the negotiation deadline of the Protocol.

The Portuguese sentiment was echoed by Ghana, Liberia and Botswana. These countries believed that the Co-Leads’ plan to setting up a dedicated task force within the workstream to deal with the database proposal would be too ambitious given the time frame and would effectively merely duplicating the intersessional work in the workstreams. These countries noted that resources are scarce and only barely sufficient to participate in regular sessional and intersessional meetings. The work would most likely be carried out by the same delegates as the ones who actively participate in the intersessional meetings.

Brazil believed it was not necessary to have every country participate in a task force and that the output of the taskforce would most likely take the shape of the report which outlines legal limitations regarding confidentiality and identifies current practices in countries and data availability with commercial providers. Brazil also emphasized the need to involve regional tax administration organizations in the work on this specific topic.

After this final debate, the Chair of the INC, Ramy Youssef, closed the Fourth Session of negotiations of the United Nations Framework Convention on International Tax Cooperation.

From a Tax Justice Network perspective, the negotiations on the early protocol on dispute prevention and resolution revealed progress in acknowledging the failures of current mechanisms but also clear gaps that mirror the Tax Justice Network’s long-standing concerns. The broad agreement that the protocol should focus on cross-border cases both under the current rules like transfer pricing and new rules under the Convention is welcome. Global South delegations are right to stress that their limited treaty networks currently leave them without access to effective mechanisms. OECD countries’ push for mandatory arbitration only deepens these asymmetries, while the Tax Justice Network underlines that arbitration entrenches power imbalances and should be rejected. Instead, the Convention should use this opportunity to “emancipate” dispute resolution from tax treaty bilateralism, creating a universal legal ground for mutual agreement procedures under the UN framework, similar to how information exchange has moved beyond bilateral treaties. During the negotiations it became furthermore clear that many unresolved disputes stem from fundamental disagreement on the fair allocation of the tax base under transfer pricing rules. The Tax Justice Network’s submission therefore highlights that prevention is as vital as resolution: moving away from the separate entity approach and transfer pricing toward unitary taxation and formulary apportionment would not only allocate taxing rights more fairly but also drastically reduce disputes. The protocol is also an opportunity to prohibit the use of investor-state-dispute resolution (ISDS) under investment treaties to deal with tax disputes by agreeing that tax disputes can only be resolved through tax dispute resolution mechanisms under the Convention. In any case, progress depends on shifting negotiations from optional, non-binding language toward a common normative framework under the Convention that guarantees inclusive access, prioritises prevention, and strengthens resource mobilisation for all countries.

From the zero-draft text prepared by the Co-Lead:

Article 12
Capacity Building and Technical Assistance

1. Each State Party shall cooperate to strengthen its capacity in tax matters, including infrastructure
and human resources, taking into account the needs, capacities and priorities of each State Party, in order to fulfill its obligations under this Convention.

2. States Parties shall, according to their capacity, provide one another technical assistance, especially
for the benefit of developing countries. Such cooperation shall promote the transfer of technology and
technical and legal expertise to strengthen international tax cooperation and capacities of States Parties to effectively administer taxes, implement this Convention, boost domestic resource mobilization and drive accountability in the use of mobilized resources. Such technical assistance may include, inter alia:

(a) Establishment of institutional mechanisms to support Member States, especially developing
countries, in their efforts to build capacity on relevant international tax practice and related issues
including through exchange programmes;
(b) Assistance, upon request, in the development of a strong legislative foundation to support
domestic resource mobilization;
(c) Setting up data analytics and exchange of information frameworks;
(d) Financial and material assistance to support capacity building and technical assistance; and
(e) Where feasible, coordination of technical assistance or capacity-building programmes for States
Parties, from various stakeholders, in a manner that ensures efficient use of resources, avoids undue
duplication of efforts and boost impact.

3. To the extent possible, these measures shall be without prejudice to existing foreign assistance
commitments or to other financial cooperation arrangements at the bilateral, regional or international level.

4. States Parties may conclude bilateral or multilateral agreements or arrangements on material and
logistical assistance, taking into consideration the financial arrangements necessary for the means of
international cooperation provided for by this Convention to be effective.

From the Terms of Reference adopted by the UN:

Capacity-building

11. Inclusive and effective participation in international tax cooperation requires procedures that take into account the different needs, priorities and capacities of all countries to meaningfully contribute to the norm-setting processes, without undue restrictions, and support them in doing so, including giving them an opportunity to participate in agenda-setting, debates and decision-making, either directly or through country groupings, according to their preference.

12. The framework convention therefore should include provisions regarding institutional mechanisms to support Member States, especially developing countries, in their efforts to build capacity on relevant international tax practice and related issues to ensure that they have adequate capacity to participate effectively in international tax cooperation and to implement the framework convention.

Zero draft text

The text of the draft article on Capacity Building and Technical Assistance read as follows:

Article 12 Capacity Building and Technical Assistance

1. Each State Party shall cooperate to strengthen its capacity in tax matters, including infrastructure and human resources, taking into account the needs, capacities and priorities of each State Party, in order to fulfill its obligations under this Convention.
2. States Parties shall, according to their capacity, provide one another technical assistance, especially for the benefit of developing countries. Such cooperation shall promote the transfer of technology and technical and legal expertise to strengthen international tax cooperation and capacities of States Parties to effectively administer taxes, implement this Convention, boost domestic resource mobilization and drive accountability in the use of mobilized resources. Such technical assistance may include, inter alia:
3. (a) Establishment of institutional mechanisms to support Member States, especially developing countries, in their efforts to build capacity on relevant international tax practice and related issues, including through exchange programmes;
4. (b) Assistance, upon request, in the development of a strong legislative foundation to support domestic resource mobilization;
5. (c) Setting up data analytics and exchange of information frameworks;
6. (d) Financial and material assistance to support capacity building and technical assistance; and
7. (e) Where feasible, coordination of technical assistance or capacity-building programmes for States Parties, from various stakeholders, in a manner that ensures efficient use of resources, avoids undue duplication of efforts and boost impact.
8. To the extent possible, these measures shall be without prejudice to existing foreign assistance commitments or to other financial cooperation arrangements at the bilateral, regional or international level.
9. States Parties may conclude bilateral or multilateral agreements or arrangements on material and logistical assistance, taking into consideration the financial arrangements necessary for the means of international cooperation provided for by this Convention to be effective.

Floor discussion

Domestic Resource Mobilization

Czechia opened discussions by stating its support for the Article as key to capacity building to facilitate domestic resource mobilization. It wished to insert language making the actions in paragraph 2 voluntary.

Czechia also pointed to an ambiguity in the legal language in paragraph 4, concerning the sentence “may conclude bilateral or multilateral agreements or arrangements”: “question is whether it makes sense to have a, what we would call in the Czech legal science, a permissible legal norm”. The co-lead immediately clarified this point, explaining that, following earlier discussions, it provided the option for Member States to have bilateral arrangements to support each other.

Belgium added its support for the Article and referenced the Sevilla Commitment, which recognizes the importance of scaling up support for DRM and strengthening capacity-building efforts in developing countries.

Kenya, on behalf of the Africa Group, stated its support for the Article, seeing it as key to supporting the effective administration of taxes, meeting obligations under the Convention and its protocols, and improving domestic resource mobilization.

Demand-driven needs – and duplication

Belgium referenced the work already in place by several agencies that support capacity building. In particular, Belgium saw merit in capacity building that was demand-driven and considered this especially helpful alongside the flexibility established in the Article, which would help prevent unnecessary duplication of activities.

Norway, however, stressed that the Article would be stronger if it were more flexible and contained less prescriptive language. Norway used its intervention to agree that support needed to be demand-driven and that existing initiatives and organizations were well positioned to provide technical expertise and support, specifically highlighting its own Tax for Development programme working in partner countries. Norway moreover felt that a listing of initiatives could inadvertently narrow the opportunities for technical assistance. Norway suggested that paragraphs 3 and 4 might be deleted since they did not add value to the task of technical assistance. India concurred.

Sweden, China and Singapore supported the position expressed by Norway and Belgium in terms of capacity building being demand-driven and also said that, for them, capacity building should be framed as key to the Financing for Development project.

Germany, too, lent its support to the Article and its focus on DRM and, like others, cited bilateral and other initiatives to provide technical assistance, but also emphasised the need for capacity-building support to be demand-driven.

Japan similarly considered that collaboration with regional and international capacity-building and technical-assistance initiatives would avoid duplication.

Algeria, however, highlighted a counterpoint: that a demand-led process could be reductive, cautioning that states could create gaps or legislative weaknesses. Algeria proposed that support from the Secretariat for cooperation under capacity-building operationalisation would be helpful, although it was not clear whether the Secretariat could have such a role.

Equal distribution of technical support

Jamaica expressed concern that paragraph 3, in listing national, regional and international approaches to technical support, could create an unwelcome category.

Brazil intervened with a statement that it believed states had to commit to building their own capacity and commit resources to do so, as well as supporting capacity building in other states. Brazil said the Convention does not require this of states, but that wording should be introduced to do so.

Relationship to protocols

Kenya, speaking on behalf of the Africa Group, stated that capacity building and technical assistance should extend to the protocols and not focus only on the Convention. Morocco supported Kenya’s intervention.

Clarity of language

India spoke about the need for clarity concerning the phrase “driving accountability in the use of mobilized resources” in paragraph 2. This seemed to be an operational provision that was perhaps not well placed but, more importantly, was unclear and consequently difficult to support. Morocco agreed with India’s position.

The discussion on Article 12 (Capacity Building and Technical Assistance) opened with the Co-Lead introducing a five-paragraph draft developed from the Nairobi discussions and inviting delegations to propose refinements ahead of the next round.

From the outset, there was broad convergence that capacity building is indispensable for an inclusive and implementable Convention, but a recurring structural critique—raised early by Sweden, Belgium, Norway, China, Germany, Saudi Arabia, India, Singapore, the Republic of Korea, Jamaica, Brazil and Japan—was that paragraph 1 reads as a general implementation obligation that sits awkwardly inside the capacity-building article and should be relocated to a general obligations section or the preamble.

Within that overall convergence, a first cluster of interventions (notably Sweden, Belgium, Japan, Singapore, the Republic of Korea, Jamaica, and Norway) emphasised that capacity building must be demand-based, aligned with national priorities, and coordinated to avoid duplication, and warned against overly prescriptive lists of “priority” topics that could unintentionally narrow future assistance or privilege some areas over others.

At the same time, several delegations used this point to push for changes that—while framed as “flexibility”—would in practice de-specify the commitment (e.g., deleting topic references) and potentially reduce the Convention’s ability to lock in concrete capacity-support expectations.

The most ambition-raising proposal came from Zambia on behalf of the African Group, which tabled replacement drafting aimed at making Article 12 operationally meaningful for implementation across the Convention. The proposal explicitly broadened capacity building beyond information sharing to include technology transfer; peer-learning, exchange programmes and secondments; institutional mechanisms; legislative support; data analytics and exchange-of-information infrastructure; training and tax education; and enhanced financial/material assistance, while also anchoring the obligation in the needs of developing countries and countries in special situations.

This approach was then reinforced by a number of developing-country interventions—Sierra Leone, Nigeria, Ghana, and (briefly) Egypt, with Peru listed to speak—stressing that capacity support should be predictable, sustainable, measurable, and treated as a shared responsibility because the Convention risks becoming inequitable in practice if substantive obligations outpace implementation capacity.

A second cluster—largely higher-income and like-minded delegations—accepted the need for Article 12 but focused on streamlining and “high-level” drafting. Germany and China explicitly endorsed relocating paragraph-1-type language and suggested structuring Article 12 around clearer roles (domestic responsibility; support by countries “in a position to do so”; and COP/Secretariat coordination), while the United Kingdom stressed that a minimum expectation should be a commitment by all Parties to offer assistance according to resources and expertise.

Non-State stakeholders intervening from the floor broadly pushed to keep Article 12 politically meaningful—linking capacity to equity, participation, and the Convention’s ability to deliver development outcomes. The Children and Youth Major Group framed capacity gaps as a driver of unequal outcomes and called for predictable, coordinated support plus transparency and meaningful civil society engagement. The Southern and Eastern Africa Trade Information and Negotiation Institute (SEATINI), speaking for the African Civil Society Working Group, argued that capacity building cannot substitute for fixing systemic flaws, but still urged an explicit technology-transfer obligation to prevent widening digital divides. CNCD-11.11.11 and APMDD similarly warned against treating capacity as “charity,” emphasised structural reform and inclusion, and called for strong COP-enabled mandates and—particularly from APMDD—more autonomous, demand-driven financing arrangements to level negotiating power.

The Tax Justice Network’s perspective stresses that “capacity gaps” are too often used as an explanation for exclusion when the deeper problem is that the system itself has been designed in ways that disadvantage many countries.

For the UN tax convention to set universal and inclusive standards, the capacity building and technical assistance commitment should therefore come with design choices that reduce implementation burdens and recognise different starting points—such as phased requirements, differentiated minimum standards, and non-reciprocal support where necessary—so countries can benefit from cooperation even if they cannot immediately match the same administrative or technical capacity in return.

From the zero-draft text prepared by the Co-Lead.

Article 13
Conference of the States Parties to the Convention

1. A Conference of the States Parties to the Convention is hereby established to achieve the objectives set forth in this Convention and to promote and review its implementation.

2. The Secretary-General of the United Nations shall convene the Conference of the States Parties not later than one year following the entry into force of this Convention. Thereafter, regular meetings of the Conference shall be held in accordance with the rules of procedure adopted by the Conference.

3. The Conference of the States Parties shall adopt rules of procedure and rules governing the activities set forth in this article.

4. The Conference of the States Parties shall facilitate the implementation of this Convention by the States Parties. In particular, it shall:

(a) Facilitate the exchange of information on legal, policy and technological developments pertaining to international tax cooperation;
(b) Take into consideration the work of other relevant forums in the area of international tax cooperation;
(c) Review periodically the implementation of this Convention by its States Parties in accordance with Article [16] of this Convention;
(d) Elaborate and adopt supplementary protocols to this Convention on the basis of article [20] of this Convention; and
(e) Consider the technical assistance and capacity-building requirements of States Parties regarding the implementation of this Convention and recommend any action it may deem necessary in that respect.

5. The Conference of the States Parties shall examine the most effective way of receiving and acting
upon information, including, inter alia, information received from States Parties in accordance with Article [15] and from competent international organizations

From the zero-draft text prepared by the Co-Lead.

Article 14
Subsidiary Bodies

1. A subsidiary body for implementation is hereby established to assist the Conference of the States
Parties in the effective implementation of the Framework Convention and its protocols. This body shall be open to participation by all States Parties and shall comprise government representatives who are technical experts on matters within the scope of the Framework Convention. The subsidiary body for implementation shall report regularly to the Conference of the States Parties on all aspects of its work. No later than [2035] and then every five years thereafter, the subsidiary body for implementation will recommend to the Conference of the States Parties such actions as it considers necessary to ensure implementation of this Convention.

2. The Conference of the States Parties shall also establish, if it deems it necessary, additional mechanisms or bodies, including technical working groups, to assist in the effective implementation of the Framework Convention and its protocols. Such mechanisms or bodies may report directly to the Conference of the States Parties or to the subsidiary body for implementation as directed by the Conference of the States Parties. They may be temporary to perform specific tasks or research particular topics or standing bodies to provide ongoing advice to the Conference of the States Parties.

3. The Conference of the States Parties shall determine the rules of procedure for the mechanisms and
bodies established pursuant to paragraph 2 of this Article. In determining the composition of standing bodies, the Conference of the States Parties shall ensure equitable geographical representation.

From the zero-draft text prepared by the Co-Lead.

Article 15
Data Collection and Analysis

1. Each State Party shall collect and develop statistical and research data to enable them to formulate, analyse and implement policies to give effect to the Framework Convention and any of its protocols to which it is a party.

2. States Parties shall share with each other generic information, including statistics, analytical expertise and information concerning the subject matter of the Framework Convention and any of its protocols to which they are parties with a view to developing common definitions, standards and methodologies, as well as best practices, in the implementation of such agreements. This may be done bilaterally, multilaterally or through regional organizations.

3. The process of collecting, maintaining and sharing the information described in this article shall comply with internationally accepted professional standards in the collection and use of statistics. Before sharing such information under paragraph 2, a State Party shall ensure that it will not disclose any taxpayer specific information that would be protected by Article [11] or anonymize the information.

From the zero-draft text prepared by the Co-Lead.

Article 16
Review and Verification

1. Each State Party shall monitor its policies and practical measures to give effect to this Convention and any of its protocols to which it is a party in order to assess the effectiveness and efficiency of such policies and measures. Each State Party shall provide the Conference of the States Parties with information on its programmes, plans and practices, as well as on legislative and administrative measures to implement this Convention, as required by the Conference of the States Parties.

2. The Conference of the States Parties shall undertake periodic reviews of the extent to which the Framework Convention is achieving its objectives as set out in Article 1.

3. The process for such reviews shall be established by the Conference of the States Parties and may be adjusted as necessary to ensure that all States Parties participate in such reviews on an equal footing.

From the zero-draft text prepared by the Co-Lead.

Article 17
Secretariat

1. A secretariat is hereby established. The Conference of the States Parties, at its first meeting, shall make arrangements for the functioning of the secretariat.

2. Until such time as the secretariat commences its functions, the Secretary-General of the United Nations shall perform the secretariat functions under the Convention.

3. The secretariat shall:
(a) Assist the Conference of the States Parties in carrying out the activities set forth in this Convention;
(b) Make arrangements for sessions of the Conference of the States Parties and any subsidiary bodies and provide them with services as required;
(c) Prepare reports on its activities and present them to the Conference, and compile and transmit reports submitted to it;
(d) Upon request, assist States Parties in providing information to the Conference of the States Parties, as envisaged in this Convention;
(e) Ensure the necessary coordination with the secretariats of relevant international and regional organizations;
(f) Enter, as needed and under the guidance of the Conference of the States Parties, into such administrative and contractual arrangements as may be required for the effective discharge of its functions; and
(g) Perform the other Secretariat functions specified in the Convention and any of its protocols and such other functions as may be determined by the Conference of the States Parties.

From the zero-draft text prepared by the Co-Lead.

Article 18
Financial Resources

1. Each State Party shall, within its capabilities, ensure that it has sufficient resources to support its national activities that are intended to achieve the objectives of this Convention, taking into account its national policies, priorities, needs and capacities.

2. The State Parties agree that:
(a) to assist Parties in meeting their obligations under the Convention, all relevant potential and existing resources, financial, technical, or otherwise, both public and private, that are available for international tax cooperation, should be mobilized and utilized for the benefit of all Parties, especially developing countries;
(b) State Parties shall promote, as appropriate, the utilization of bilateral, regional, subregional and other multilateral channels to provide funding to support the capacity building and technical assistance activities set out in Article 12;
(b) the Secretariat shall advise developing country Parties and Parties with economies in transition, upon request, on available sources of funding to facilitate the implementation of their obligations under the Convention.

3. The Conference of the States Parties in its first session shall review existing and potential sources and mechanisms of assistance based on a study conducted by the Secretariat and other relevant information, and consider their adequacy. The results of this review shall be taken into account by the Conference of the States Parties in determining the necessity to enhance existing mechanisms or to establish a voluntary global fund or other appropriate financial mechanisms to channel additional financial resources, as needed, to developing country Parties to assist them in meeting the objectives of the Convention.

From the zero-draft text prepared by the Co-Lead.

Article 19
Amendments to the Convention

1. Any State Party may propose amendments to the Convention.

2. Amendments to the Convention shall be adopted at an ordinary session of the Conference of the
States Parties. The text of any proposed amendment to the Convention shall be communicated to the States Parties by the Secretariat at least six months before the meeting at which it is proposed for adoption. The Secretariat shall also communicate proposed amendments to the signatories to the Convention and, for information, to the Depositary.

3. The State Parties shall make every effort to reach agreement on any proposed amendment to the
Convention by consensus. If all efforts at consensus have been exhausted, and no agreement reached, the amendment shall as a last resort be adopted by [ ] majority vote of the States Parties present and voting. The adopted amendment shall be communicated by the Secretariat to the Depositary, who shall circulate it to all States Parties for their acceptance.

4. Instruments of acceptance in respect of an amendment shall be deposited with the Depositary. An
amendment adopted in accordance with paragraph 3 above shall enter into force for those State Parties
having accepted it on the ninetieth day after the date of receipt by the Depositary of an instrument of
acceptance by at least [ ] of the States Parties to the Convention.

5. The amendment shall enter into force for any other Party on the ninetieth day after the date on
which that Party deposits with the Depositary its instrument of acceptance of the said amendment.

From the zero-draft text prepared by the Co-Lead.

Article 20
Relation with Protocols

1. The Conference of the Parties may adopt protocols to implement or elaborate this Convention.

2. The requirements for the entry into force of any protocol shall be established by that instrument.

3. In order to become a Party to a protocol, a State must also be a Party to this Convention.

4. A State Party to this Convention is not bound by a protocol unless it becomes a Party to the protocol in accordance with the provisions thereof.

From the zero-draft text prepared by the Co-Lead.

Article 21
Relation with Other Agreements, Instruments and Domestic Law

1. (a) Each State Party shall take such legislative, administrative and other measures as may be necessary to give effect to its obligations under this Convention in accordance with its domestic law and constitutional procedures.
(b) The provisions of the Framework Convention and its protocols shall in no way affect the right of Parties to enter into bilateral or multilateral agreements, including regional or subregional agreements, on issues relevant or additional to the Convention and its protocols, provided that such agreements are compatible with the State Party’s commitments under the Framework Convention.

2. Subject to paragraph 3, this Convention shall not affect the rights and obligations of any party under a bilateral, regional or multilateral agreement into which a State Party has entered prior to the entry into force of this Convention.

3. States Parties shall take progressive and meaningful steps towards aligning their existing international tax agreements and related instruments with the provisions and principles of this Convention, including, where necessary, the renegotiation of existing agreements. Where a State Party requests the renegotiation, amendment, or modification of an existing agreement to achieve such alignment, the other State Party shall enter into negotiations in good faith and without undue delay.

4. Each State Party shall report to the Conference of the States Parties, at intervals and in a form to be established by the Conference of the Parties, on actions that they have taken in furtherance of paragraph 3, including information regarding the number of requests they have made or received to renegotiate existing treaties and the disposition of such requests, in a form to be established by the Conference of the States Parties.

From the zero-draft text prepared by the Co-Lead.

Article 22
Settlement of Disputes regarding the Convention

1. The States Parties shall endeavour to settle any dispute among them concerning the interpretation or application of the Convention through negotiation or other peaceful means of their own choice.

2. Any dispute between two or more States Parties concerning the interpretation or application of this Convention that cannot be settled through negotiation within a reasonable time shall, at the request of one of those States Parties, be submitted to conciliation in accordance with Annex 1.

From the zero-draft text prepared by the Co-Lead.

Article 23
Depositary

The Secretary-General of the United Nations shall be the depositary of the present Framework Convention and of protocols adopted in accordance with Article [ ].

From the zero-draft text prepared by the Co-Lead.

Article 24
Signature, ratification, acceptance, approval and accession

1. This Convention shall be open to all States for signature in [ ] from [ ] to [ ] and thereafter at United Nations Headquarters in New York until [ ].

2. This Convention is subject to ratification, acceptance or approval. Instruments of ratification, acceptance or approval shall be deposited with the Secretary-General of the United Nations.

3. This Convention is open for accession by any State. Instruments of accession shall be deposited with the Secretary-General of the United Nations.

From the zero-draft text prepared by the Co-Lead.

Article 25
Reservations

No reservations may be made to this Convention.

From the zero-draft text prepared by the Co-Lead.

Article 26
Entry into force

1. This Convention shall enter into force on the ninetieth day after the date of deposit of the [number to be determined] instrument of ratification, acceptance, approval or accession.

2. For each State ratifying, accepting, approving or acceding to this Convention after the deposit of the [number to be determined] instrument of such action, this Convention shall enter into force on the
thirtieth day after the date of deposit by such State of the relevant instrument or on the date on which this Convention enters into force pursuant to paragraph 1 of this article, whichever is later.

From the zero-draft text prepared by the Co-Lead.

Article 27
Withdrawals

1. At any time after two years from the date on which this Convention has entered into force for a
State Party, that State Party may withdraw from the Convention by giving written notification to the
Depositary.

2. Any such withdrawal shall take effect upon expiry of one year from the date of receipt by the
Depositary of the notification of withdrawal, or on such later date as may be specified in the notification of
withdrawal.

3. Any State Party that withdraws from the Convention shall be considered as also having withdrawn
from any protocol to which it is a Party.

From the zero-draft text prepared by the Co-Lead.

Article 28
Authentic Texts

The original of this Convention, of which the Arabic, Chinese, English, French, Russian and Spanish texts are equally authentic, shall be deposited with the Secretary-General of the United Nations.