The Intergovernmental Negotiating Committee (INC) on the UN Framework Convention met in Nairobi for further discussions from 10th to 19th November 2025. Discussions focused on a draft template of a Framework Convention published for consultation in October 2025. The INC also discussed the protocol related to the prevention and settlement of tax disputes.
The draft template provides for a fair allocation of taxing rights. The right to tax income arising would be extended to all jurisdictions where value is created, markets are located and revenues are generated. The taxing rights would not be exclusively linked to physical presence of a company in a country.
The Convention would also cover mutual administrative assistance and cooperation in combating illicit financial flows and tax evasion. Parties to the Convention would commit to opposing harmful tax practices, ensuring that any tax incentives provided by countries should be substance-based and with a link to investment or performance. Countries would commit to international tax cooperation approaches that promote sustainable development.
The draft template confirms that the Convention may be supplemented by one or more protocols, each with its own requirements for entry into force. A State would need to be a Party to the Framework Convention before being a party to a Protocol. Countries that sign the Framework Convention would not be bound by a Protocol unless they also became a party to that Protocol.
The Framework Convention would state that countries aim to minimize the potential for tax disputes by providing clear legislation and interpretative guidance. They would aim to implement domestic dispute resolution mechanisms that are fair and accessible to effectively resolve disputes in a timely manner. There was also some discussion of the potential provisions of the Protocol on dispute resolution.
Civil society was well represented in the discussions and contributed significantly to the process. The civil society organisations were concerned about the erosion of the tax base under the current tax systems as technology and business models developed. They were interested in seeing more progress on transparency, tax cooperation on a level playing field and the need to avoid a fragmented convention.
Contributions from civil society emphasised that the Framework Convention will be an important part of revenue mobilisation to achieve the sustainable development goals. Some contributors favoured a move towards unitary taxation with a formulary apportionment, to replace the system of taxing multinationals as groups of independent entities with profits computed under the arm’s length principle. They called for a fair allocation of taxing rights covering taxation of multinational corporations and of wealthy individuals.
Some civil society contributors also favoured the establishing of a Global Asset Register to permit automatic exchange of information. Also, they called for the publication of the registers of beneficial owners and public country-by-country reporting.
A number of African countries were opposed to arbitration as a way of resolving tax disputes. As developing country tax administrations have limited resources to commit to dispute resolution, the arbitration mechanism works in favour of economically developed countries with greater resources. The African countries considered that this inequality is also reflected in the design of international standards and of tax treaties, including dispute resolution mechanisms.
