Working Paper 218
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In 2024, a debate on the objectives and design of a new UN Framework Convention on International Tax fully took off. By establishing a framework for intergovernmental cooperation, such a convention could provide for a more central role of the United Nations in the international tax regime complex, which has been dominated by the OECD and the G20. An analysis of discussions at the Ad Hoc Committee, which met in 2024 to elaborate terms of references for the negotiations of the coming years, stakeholders’ submissions, and the literature on the convention shows that the breadth of suggestions is sizeable, with only little convergence between proposals from the global South and the global North. This paper identifies the main points of contention in the current debate, analysing countries’ and other stakeholders’ positions on them. After the question of the sequencing of the negotiations was settled in the ToR, there are two principal remaining controversies: one is over rules and decision-making procedures, the other over substantive topics to be addressed. While the decision to designate substantive protocols to the convention as optional will allow for the creation of a framework without fully resolving these debates, proponents of the convention from the global South must make a strategic choice as to which of these areas to prioritise, because they form part of a trilemma. If they stick to a firm position on procedures – according to which the convention’s decisions have a binding character and can be taken by a majority vote – and on topics of discussion, much of the framework’s output will initially mainly be ‘by the global South for the global South’, with little participation from the global North. To keep a larger and more diverse group of states on board, the global South may need to compromise on the bindingness of the convention’s instruments, or on the issues that are in scope. Each decision would lead to a different role for the convention in the international tax regime complex. None of them would signify a radical change of the status quo, but each has the potential to incrementally improve the position of lower income countries and thereby lead to a more inclusive international tax regime complex. |
