On 22 November 2023 the UN general assembly adopted a resolution to commence the process of setting up a framework convention on tax. The framework convention could ensure that the UN is the main body for decision-making on international tax rules.
The resolution recognises the work of the Addis Tax Initiative in coordinating action to strengthen the capacity of developing countries and reduce the gaps in provision of development finance. It also notes the work of the African Union in promoting international cooperation to fight illicit financial flows, which are draining financial resources from Africa and impacting economic development.
The resolution also notes the report issued by the UN Secretary-General on the promotion of inclusive and effective international tax cooperation at the United Nations, setting out options for going forward following a previous resolution passed in November 2022 in relation to international tax cooperation.
Under the resolution the member states of the UN have decided to establish a an open-ended, ad hoc intergovernmental committee to draft terms of reference for a UN framework convention on international tax cooperation. The committee is to convene in New York for up to 15 working days at a time, with input from international organizations and civil society. An organizational session will be held as soon as possible and the committee aims to finalise its work by August 2024. The bureau of the ad hoc intergovernmental committee will have not more than 20 members, elected on the basis of balanced geographical representation.
The resolution requests the committee to take into account the priorities and capacities of all countries, in particular developing countries, and take into account the need for sustainable development, considering the interaction of international taxation with other important economic, social and environmental policy areas. The committee is requested to consider the necessary flexibility required by the tax system to achieve equitable results as the technology and business models evolve. The committee is also requested to consider the work of other relevant forums, and the existing tools and expertise.
The resolution requests the committee, in addition to drafting the framework convention, to consider developing protocols on specific priority issues, such as measures to combat tax-related illicit financial flows and measures to tax the income from the provision of cross-border services in the digitalised global economy.
The resolution requests the committee to submit a report to the 79th session of the UN General Assembly with the draft terms of reference for a UN framework convention.