UK and International Tax news

UN Starts Negotiations On International Tax Cooperation

Thursday 20th February 2025

The United Nations General Assembly has recently convened an organizational session in New York to start negotiations on international tax cooperation.

In 2022, the UN General Assembly agreed on the need to strengthen international tax cooperation at the United Nations. It launched intergovernmental discussions on ways to strengthen the inclusiveness and effectiveness of international tax cooperation. The General Assembly decided to establish an Ad Hoc Committee in 2023.

In December 2024, the UN General Assembly adopted Resolution 79/235 for the promotion of inclusive and effective international tax cooperation. The Resolution provided for a Member State-led open ended intergovernmental negotiating committee for the purpose of drafting the UN Framework Convention on International Tax Cooperation and two early protocols during 2025, 2026 and 2027, with at least three substantive sessions per year.

The General Assembly observed that international tax rules must evolve with the changing world, be flexible and resilient and adapt to new technologies and business models. Most importantly, they must serve all Member States.

International tax cooperation has become increasingly important and central to international economic relations and sustainable development progress. New global challenges have brought additional complexity and increased both costs and opportunities to build an inclusive, fair and effective international tax system that is supportive of global sustainable development goals.

The Framework Convention is intended to contribute to the Sustainable Development Goals by ensuring that international tax rules reflect the needs, priorities, and capacities of all Member States and by supporting Member States in their efforts to mobilize domestic resources to invest in the SDGs.

The Intergovernmental Negotiating Committee convened an organizational session in New York from 3 to 6 February 2025 to address and conclude on organizational matters, including decision-making rules of the committee, and decide on the subject of the second early protocol drawn from the list of specific priority areas set out in the terms of reference. These include

  • Taxation of the digitalized economy
  • Measures against tax related illicit financial flows
  • Prevention and resolution of tax disputes
  • Addressing tax evasion and avoidance by HNWIs and ensuring their effective taxation in relevant Member States.

General introductory statements were made by 12 Member States at the session, including the US which took the opportunity to state that it was firmly against a future Framework Convention on International Tax Cooperation, that the goals were inconsistent with US priorities and represented unwelcome overreach. The US confirmed that they did not plan to participate further in the organizational session, process, or negotiating the UN Framework Convention.

The US added in their statement that they rejected the very nature of the discussions, and the process that has been adopted will lead to a Convention that would unacceptably hamper nations’ ability to enact tax policies that serve the interests of their citizens, businesses, and workers. The US intends to reject the outcomes of the Framework Convention process and oppose them, and welcome others to join them in opposition.

If you would like more information on the above, please contact Keith Rushen on 0044 207 4862378.

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