The UN General Assembly adopted a resolution establishing the terms of reference for a United Nations Framework Convention on International Tax Cooperation.
The resolution passed with 119 countries voting in favor, 9 opposed, and 43 abstaining.
This development follows after the United Nations approved the final draft terms of reference (ToR) for the UN Framework Convention on International Tax Cooperation on 16 August 2024. The decision passed with a majority vote of 110 countries in favour, with 44 abstentions and eight countries against it.
This resolution establishes a Member State-led committee to draft the Convention and two early protocols simultaneously.
The committee is expected to finish its work by 2027.
The objectives and commitments in the draft terms of reference are as follows:
Objectives
- Establish fully inclusive and effective international tax cooperation in terms of substance and process;
- 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;
- Establish an inclusive, fair, transparent, efficient, equitable, and effective international tax system for sustainable development. This will enhance the legitimacy, certainty, resilience, and fairness of international tax rules while addressing challenges to strengthening domestic resource mobilisation.
Commitments
- Fair allocation of taxing rights, including equitable taxation of multinational enterprises;
- Addressing tax evasion and avoidance by high-net worth individuals and ensuring their effective taxation in the relevant Member States;
- 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;
- Effective mutual administrative assistance in tax matters, including with respect to transparency and exchange of information for tax purposes;
- Addressing tax-related illicit financial flows, tax avoidance, tax evasion and harmful tax practices; and
- Effective prevention and resolution of tax disputes.
