At the second session of the Ad Hoc Committee to Draft Terms of Reference for a United Nations Framework Convention on International Tax Cooperation, held from 29 July to 16 August 2024, the Terms of Reference for a UN Tax Convention were adopted by 110 votes to 8, with some abstentions.

The Terms of Reference dated 15 August 2024 clarify that the Framework Convention should include a clear statement of its objectives, establishing a system of governance for inclusive international tax cooperation that can respond to existing and future challenges. It should establish an inclusive, fair, and transparent international tax system for sustainable development, addressing issues around the strengthening of domestic resource mobilization.

The Terms of Reference note that efforts to achieve the objectives of the Framework Convention should fully consider the different needs and capacities of all countries, including developing countries; recognise the sovereign right of every member state to decide its tax policy and practice; contribute to achieving sustainable development by ensuring fairness in allocation of taxing rights; and provide for rules that are simple and easy to administer.

The Framework Convention would include commitments on the fair allocation of taxing rights and fair taxation of multinationals; address tax evasion and avoidance by high-net worth individuals; contribute to the achievement of sustainable development; ensure effective mutual administrative assistance in tax matters, including transparency and exchange of information for tax purposes; address tax-related illicit financial flows, tax avoidance, tax evasion and harmful tax practices; and provide for effective prevention and resolution of tax disputes.
The Framework Convention would include provisions for support to Member States in their efforts to build capacity on relevant international tax practice and to ensure that they have adequate capacity to participate effectively in international tax cooperation.

There will be Protocols which are separate legally binding instruments, under the Framework Convention, to implement the Convention. Each party to the Convention would have the option whether or not to become a party to a protocol on any important tax issues. There would be two early Protocols, one addressing taxation of income derived from the provision of cross-border services in the digitalized and globalized economy and one on another important international tax issue to be decided later. Protocols could also be considered to address tax cooperation on environmental challenges; exchange of information for tax purposes; mutual administrative assistance on tax matters; and harmful tax practices.

The Framework Convention is to be drawn up by a Member State-led negotiating committee, meeting in 2025, 2026 and 2027 for at least three sessions per year. This committee would submit the final text of the Framework Convention and of the two early Protocols to the UN General Assembly for its consideration in the first quarter of the eighty-second session.

The bureau of the intergovernmental negotiating committee would consist of a chair, eighteen vice-chairs and a rapporteur, who would be elected on the basis of geographical representation. International organizations, civil society and other relevant stakeholders would be able to contribute to the work of the intergovernmental negotiating committee. The committee would take into consideration the work of other relevant forums, considering potential synergies and the existing tools available from institutions involved in international tax cooperation.