On 20 February 2024 the first meeting took place of the Ad Hoc Committee to draft terms of reference for a UN Framework Convention on International Tax Cooperation. The Committee was established by UN Resolution 78/230 of 22 December 2023. It aims to draft the terms of reference and present its work to the UN General Assembly at the 79th session.

At the first meeting of the Committee the representatives of countries presented their views on the way forward. The following views reflect the direction of discussions:

Africa group

The representative of Botswana, on behalf of the Africa group, emphasised the principles of solidarity and mutual respect. The work of the Committee should be aligned with the 2030 Agenda for sustainable development. There should be inclusivity in decision-making, with real decision-making power for developing countries. The work should prioritise combating illicit financial flows and there should be equitable taxation, reflecting the economic activity of taxpayers in each country and addressing base erosion and profit shifting. Information sharing is important to combat tax evasion and avoidance. Capacity building is also important to facilitate participation by countries in the tax cooperation framework. The discussions should adopt a spirit of cooperation.

Spain

The representative of Spain stressed the need to take into account the progress make by other international bodies such as the OECD. The effectiveness of any measures decided by the UN would depend on the level of take-up of the norms and conventions by sovereign countries. Therefore, a consensus-based approach is required throughout the process. There should be broad, balanced participation by stakeholders, civil society and international organisations.

Nigeria

The Nigerian representative emphasised that illicit financial flows have resulted in heavy losses. The UN Convention is required to ensure transparency, build tax cooperation, and ensure full participation by all countries. Decision-making by a simple majority would favour democratic decision-making.

Norway

The representative of Norway stressed the need to enhance tax certainty for taxpayers and predictability for governments. There should not be any duplication of the work performed by other international organisations but synergies should be sought. A consensus-based approach would be preferable.

Colombia

Colombia’s view was that the deliberations should aim to ensure the effectiveness of any agreed measures. This could include broadening the tax base and taxing the highest wealth persons across the globe. There should be a principle of progressiveness, taxing the income and wealth of the richest. Consensus is valuable in the decision-making process but if any country has an effective veto over proceedings this would make the process impossible. Therefore, Colombia favours attempting to build consensus but with a need for a majority vote in situations where consensus is not reached. Participation at the UN needs to be truly inclusive.

Singapore

Singapore’s representative noted the need for consensus-based solutions to ensure that the Convention will be inclusive, effective and stable. This will not be achieved if the majority is making rules for the minority. The discussions should prioritise getting it right, rather than aiming for quick solutions. Priority should be given to growing the amount of tax revenue, rather than just on how to split the revenue collection between countries. The outcomes should not discourage innovation, but common ground should be built.

UK

The representative from the UK emphasised that collaboration between the UN and the OECD is essential for successful progress. A lot of work has already been done in bodies such as Tax Inspectors Without Borders (TIWB), and the progress already made on tax transparency and capacity building has resulted in large amounts of additional tax revenue. The terms of reference must reflect core principles. The UN work must be focussed on areas where it can have the most value, building on the work already done in other international organisations. It is necessary to work with the OECD to identify where the UN can contribute. Decisions must be made by consensus as decisions made by a simple majority vote will not be effective.

Switzerland

The view from Switzerland was that inclusivity and effectiveness were essential. If there is no consensus, the international tax architecture will be fragmented. There must not be any duplication, because the existence of competing systems of international taxation would spread the resources of countries too thinly and weaken the international tax instruments.

US

The US representative stressed the need for consensus in the procedures rather than majority voting. There should be support for the OECD, where the work on Pillar One is ongoing. If there are two processes continuing simultaneously, countries with limited resources will need to choose between those two processes.