Third Session of the Intergovernmental Negotiating Committee on the United Nations Framework Convention on International Tax Cooperation
Agencies, Funds & Programmes
Date: 17 November 2025
Language: English
Transcript: https://transcripts.un.org/ar/asset/k18/k18wk3ynok?lang=en
Transcripts available through this tool are created by using automatic speech recognition and are not official records nor official documents of the United Nations. Official records and official documents are available on the Official Document System of the United Nations.

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Chair · Rami [0:00]:

I would like to welcome everyone in the second week of the third session in Nairobi. Briefly, we're gonna just brief what happened last week. Last week we start with work stream one in which we had the first version of the text. We went through intensive and very fruitful discussions on work stream one. Then on Friday we get a brief on the progress that took place on work stream two by Lisa of this work stream. And this week we are starting to work on work stream three. Work stream three between the last session in August in New York till now, we work intensively in developing a concept note that should reflect some of the ideas and some proposals of the solutions that maybe can be, exist, can be developed further. I think everyone already have this concept note and today we're gonna in more deep discussion on this concept note and would like to hear your thoughts about what is there in this document. This discussion will be led by the two colleagues of work stream three for dispute prevention and resolution, Michael from Germany and Marlene from Jamaica. Again, I'm not a fan of long introductions. I think let's dive in the work and the document. So I would like to hand over the floor to our colleagues to start the discussions. We will start first by presentation about what is inside the document and how things went. And then after that, I think the colleagues will open the floor for interventions. Thank you. Over to you.


Germany · Co-Lead · Michael Kollitsch [2:07]:

Thank you, Mr. Chair. Good morning, dear colleagues, distinguished delegates, ladies and gentlemen. I too hope that everyone enjoyed a relaxing or an excitement, exciting weekend in this beautiful country and in this exciting city in particular. Starting today as Rami just said we are going to be discussing the works on the second early protocol on dispute prevention and dispute resolution. We are planning to do this until Wednesday noon. As was just indicated we have prepared a presentation. We will walk through the presentation in a minute and as I have just been told the presentation has been circulated a couple of minutes ago. I assume this will have been done via e-mail as well as via upload on eDelegate. So before we start, I want to commend, first and foremost, my co-lead, Marlene, for the excellent cooperation over the course of the last weeks in the intersessional work and in the preparatory work to this session. Speaking also on behalf of my co-lead, I would like to express or take the opportunity to thank the Secretariat for its support in the preparatory work which has been undoubtedly truly demanding given the parallel works also in the other two work streams. And finally and most importantly our appreciation especially goes to the Member States for their active engagement cooperation and ample contribution during the intersessional work in the run up to this session. With that, I would like to hand over to my colleague, Marlene, who will lead us through the presentation. Thank you.


Jamaica · Co-Lead · Marlene Parker [4:09]:

Thank you very much, Michael, and good morning, good morning, colleagues. I also want to say, Michael, thanks for the excellent cooperation that we have had. We have had a very collegial relationship and I'm grateful for that. I want to add my own thanks to the members of the work stream and as Michael has said on my behalf, the secretariat and Rami as well. Okay, so how we're going to approach the presentation today is we're going to go through the slides and I think you should have them. They have been circulated. So we're going to do an overview of the slides because we are mindful that not everyone here would have been participating in the work stream. And so we're hoping that this brief presentation of the slides will help persons who have not been involved in the work to follow the discussions and to be able to make inputs as you find necessary. And so we're gonna start with slide two. And we're gonna start with slide two. Right. And so why does this session matter? We wanted to start our discussions today explaining where we stand and why the session matters to our future work. In the scoping phase, Workstream three identified the main issues and challenges that member states face in preventing and resolving cross-border tax disputes. For example, the limits of existing mechanism, capacity constraints, information asymmetries, and in some cases, the complete absence of any structured mechanism between countries that phase helped us map the problem. We are now moving from understanding the issues to shaping possible solutions. This is the first time the committee has before it a structured set of preliminary approaches for a protocol on the prevention and resolution of tax disputes. These approaches are deliberately high level. They do not prejudge the final shape of the instrument, but they give us a basis for focused discussion. Our objective in this session is to deepen our shared understanding of the possible approaches and their implications and to reflect together on the feasibility and coherence of potential solutions. This will help us identify priorities and needs for the next stage of work and enable us to move from high level concepts to more detailed approaches for the protocol. Our main goal over the next couple of days is to gather feedback and input that will inform the next intercessional work. Slide three, the approaches. The co-leads have prepared a concept note on ideas for potential solutions, which introduces a set of preliminary approaches organized around the main topics that emerged from the scoping phase. These approaches are conceptual and exploratory in nature. They are intended to support your reflections and to help us collectively explore during this session possible directions for the protocol. Slide four. Optionality. The first topic is optionality, which received strong support during the scoping phase. However, there were some concerns that too many opt-in or opt-out possibilities could create procedural complexity. The proposed approach, therefore, is to first develop a comprehensive menu of potential mechanisms for the prevention and resolution of tax disputes under the protocol. This will help us to get a clearer overview of what mechanisms are available. Only then can we consider which of the mechanisms might be identified as core mechanisms. Slide five, we're still on optionality. This slide illustrates in a simplified way some exploratory ideas for how optionality might operate in practice. It is important to stress that these are visual aids, not design decisions. They intend to provoke discussion, not to anticipate the outcome of the drafting phase. The graphic suggests three layers of optionality. First, the protocol itself is optional. States will decide whether or not to become parties. Second, within the protocol, there would be a layer composed by a series of fully optional mechanisms and another layer of some potentially identified as core, which would be available to all parties. However, none of these mechanisms would supersede any arrangements where that adds value or fills a gap. Where no relevant mechanism exists between certain parties, the protocol could offer them such a mechanism if such parties agree. These ideas are conceptual at this stage. meaning that we are not proposing yet the detailed rules of the functioning of these mechanisms, but asking for reactions, the general approach, whether a menu of mechanisms plus a set of core mechanisms is a useful starting point for the protocol. However, we welcome and value the committee's ideas on how to operationalize optionality in a way that is administratively workable and encourages broad participation, noting that this will be addressed during the drafting phase, where careful consideration will be given to accommodate the feature of optionality with the concept of core mechanisms. Slide six. as we continue on the approach of optionality. So the issues for the committee, and that is what we are going to look at after this overview. The slide summarizes the questions of the committee on optionality. First, we invite you to consider whether the committee finds appropriate the two-step approach we just described. First, elaborating a comprehensive menu of mechanisms for prevention and resolution, and then identifying those core mechanisms that in principle should be available for use by all parties. Second, we invite the committee to discuss whether the mechanisms under the protocol, including the core mechanisms, should not have a superseding effect unless the concerned parties agree otherwise in order to apply such mechanisms in lieu or to complement existing ones or in the absence of such mechanism. Third, and perhaps most practically, we welcome your thoughts on how optionality could be operationalized in practice. For example, should parties make prior opt-in or opt-out declarations with respect to particular mechanisms? Should some choices be taken case by case depending on the countries and disputes involved? And are there other modalities that might balance flexibility, inclusiveness, and legal certainty? The feedback that you provide on these points will be essential in guiding how we develop the architecture of the protocol in the next phase. Slide seven, scope. Cross-border and versus domestic disputes. We now turn to the scope of the protocol starting with the distinction between cross-border and domestic tax disputes. During the scoping phase, there was broad support for limiting the protocol to cross-border tax disputes. At the same time, several delegations expressed openness to non-binding best practices or optional guidance in domestic disputes, particularly in cases where domestic disputes are closely linked to international aspects. The proposed approach, therefore, is that the protocol should focus exclusively on cross-border tax disputes. In this regard, a key task will be to clarify what we mean by cross-border tax disputes for the purposes of the protocol, as this will influence which types of disputes the protocol can address. The work on domestic disputes could be undertaken at a later stage by the Conference of Parties in the form of optional guidance or best practices. Slide eight. the types of disputes covered and we are still on the issue of scope. The second aspect of scope concerns the types of disputes that could be covered by the protocol. In the scoping phase, views differed on the types of disputes the protocol could cover, including the possibility of addressing no treaty situations. The proposed approach in the concept note is that the protocol could apply to the range of cross-border tax disputes, including disputes related to the interpretation and application of bilateral or multilateral tax treaties. Potentially, subject to the understanding of what is a cross-border tax dispute, the protocol could address no treaty situations on an optional basis. In addition, the question of how the protocol might relate to disputes arising under the framework convention itself or its other protocols would be addressed during the drafting of those instruments in coordination with the other work streams. To support the discussion, the next slides present practical examples of disputes that could be covered under the protocol so that we can together reflect on how a definition of cross-border tax disputes might operate in practice. And so slide nine, here are some of the examples. This slide illustrates three examples that could be considered as cross-border tax disputes and therefore be covered under the protocol. The first example is related to transfer pricing and the arm's length principle. So country A and country B have a bilateral tax treaty whose article nine follows the UN model. Company A, resident in company A, sells goods to its corporate sibling, company B, resident in company B. The tax authorities of country A make a transfer pricing adjustment, increasing the price by 10 euros per unit. The tax authorities of country B are reviewing the case, consider that the original price was in line with the arm's length principle and therefore do not make a corresponding adjustment. The result is a potential double taxation of the same income grounded in different application of the arms length principle under a shared treaty framework. And so when we come to the next part of the discussion, we will have some discussions around these examples. The second example is a typical case of dual residence of a company. A company is incorporated in country A, but its key management decisions are taken in country B. Both country A and country B assert that the company is resident in their jurisdiction and seeks to tax its worldwide income. Their treaty has an article four that follows the UN model, and here the dispute concerns which country is entitled to treat the company as a resident. And the third example is a case of foreign tax credit. A company resident in country A receives dividends from its subsidiary in country B. Country B levies a withholding tax on the dividends. Later, tax authorities from country A deny a foreign tax credit on the grounds that the tax in country B was not an income tax. The question is whether the tax levied in country B qualifies for relief under the foreign tax credit article. In each of these cases, there is a shared treaty framework, a cross-border element, and at least potential double taxation. The question here is if these situations can be recognized as cross-border tax disputes and therefore be covered under the scope of the protocol. And the reason why we included the examples is because coming from the discussions in the work stream, there was a request by member states that we give examples so that this can help us to define what cross-border tax disputes are. Now we're going to look at some of the issues for the committee on the scope. Based on the previous explanation and supporting examples, the committee is invited to discuss whether the committee has views on the key elements that could help shape a definition of a cross-border tax dispute for the purposes of the protocol and in particular whether the following situations could fall within its scope. Situations involving two or more national tax law frameworks providing tax rights over the same taxpayer transaction or income, the possibility of double taxation or double non-taxation even if largely theoretical, issues of double taxation arising from the differing application of the arms length principle by different tax administrations in transfer pricing adjustments, issues related to permanent establishment determinations, tax residence or withholding tax arising in one jurisdiction but with implications of another in relation to potential double taxation or non-taxation. Differing views regarding the interpretation and application of tax related provisions in bilateral or multilateral instruments by tax administrations and situations that meet most of the identified characteristics of a cross-border tax dispute but lack a shared legal basis such as a bilateral treaty. And these are intended to be guiding questions to help the committee consider how broad or how narrow the protocol scope should be and how it might capture the types of disputes that member states are concerned about, including those that may currently fall outside existing mechanism. Slide 11. This slide raises two additional questions. First, whether the committee could provide practical examples of cross-border tax disputes in no treaty situations. And second, whether with respect to domestic disputes, the committee supports the possibility of empowering the conference of parties at a later stage to develop and recommend optional future guidance and best practices on such matters. On slide 12, the no treaty situation was one that entertained a lot of discussion and we have some examples of where this could occur. So to support the discussion on the first question of the previous slide, this slide presents a no treaty version of three examples we saw earlier. The facts remain the same. The only difference is that there is no tax treaty between country A and country B. In the first example, both countries have implemented domestic transfer pricing rules based on the arm's length principle. Country A makes a transfer pricing adjustment, increasing the price charged by country A to its sister company in country B by 10 euros per unit. Country B reviews the adjustment and concludes that the original price remains appropriate. In the second example, a company incorporated in country A is effectively managed in country B. Both countries under their domestic law consider the company resident and tax it on its worldwide income. And in the third example, a company resident in country A receives dividends from its subsidiary in country B where a withholding tax was paid. Country A later denies a foreign tax credit on the basis that the charge was an income tax under its domestic law. These examples invite the committee to consider whether and under what conditions such situations could be regarded as cross-border tax disputes for the purposes of the protocol and whether the protocol's mechanism could address them. Workstream three looks at the prevention of tax disputes as well as the resolution of tax disputes. And so slide 13 introduces the approach in terms of the prevention of tax disputes. The scoping phase showed broad recognition that preventing disputes before they arise is very important. noting both their proven value in reducing disputes and the need for enhanced cross-border cooperation, capacity building, and reliable information to make preventative tools effective for all jurisdictions. The proposed approach is that the protocol should provide a legal basis for cross-border administrative cooperation in tax disputes prevention. This legal basis could cover a range of preventative mechanisms, including APAs, joint audits, and simultaneous examinations, with particular emphasis on the role of exchange of information in close coordination with work stream one. Consideration could be given to the potential role of the United Nations in supporting these mechanisms. This could also be complemented by the capacity building commitment under the framework convention and by empowering the conference of parties to develop best practices on prevention. On slide 14, the issue for the committees. And there are two main questions. First, whether the protocol should provide a legal basis for cross-border administrative cooperation in tax dispute prevention, and if so, which preventive mechanisms should be addressed by such legal basis. Second, whether the committee finds appropriate addressing prevention through the capacity building commitment of the framework convention and the possible development by the conference of parties, of best practices or whether there are additional views or suggestions on this approach. The second limb of the workstream, the resolution of tax disputes, and here we look at the approach to the map. Turning now to dispute resolution, during the scoping phase, MAP was widely recognized as a central element of the international tax disputes resolution system. However, some concerns were raised about its effectiveness, timeliness, and accessibility, including the absence in some treaties of any MAP provision at all. The proposed approach is to strengthen MAP under the protocol and through development of best practices to improve effectiveness and accessibility. This may include time limits, transparency and information sharing practices and capacity building measures designed to address the existing imbalances. On slide 16, we note that MAP is not the only potential mechanism for resolving cross-border tax disputes. The scoping phase also revealed diverging views in arbitration, but also interest in other mechanisms such as mediation or conciliation. The proposed approach is therefore that the protocol could provide arbitration and other mechanisms such as mediation or conciliation as optional tools for dispute resolution. Further work would be needed on their design including the composition of panels and the allocation and management of costs. The possibility of establishing a pool of arbitrators or experts can also be explored. The possible role of the UN, for example, in providing assistance, hosting or acting as a permanent or ad hoc forum should be carefully analyzed. As our work progresses this week and subject to the time available, we may wish to return to these issues with more pointed design questions so that we can explore in more detail how these mechanisms could operate in practice. The issues that the committee, that are before the committee today, the next slide brings together these questions. And the committee is invited to consider whether the proposed approach of reinforcing MAP through both the protocol and best practices is adequate to make it more effective and accessible. whether the committee has views on the possible design features of a protocol's map provision, such as measures to promote transparency and information sharing or other measures addressing the root causes of current limitations. whether the committee finds appropriate the approach of having arbitration and other mechanisms such as mediation or conciliation as optional tools in the protocol and whether there are views on their possible design features including issues such as inclusiveness in the composition of panels the non-binding nature of some mechanisms and the conditions under which they could be applied, and whether the committee has views on a possible role of the UN in supporting the operation of these resolution mechanisms, including through assistance, hosting, or acting as a permanent or ad hoc forum. Slide 18, transfer pricing database. And this is in relation to access to information. The last substantive topic concerns access to information and in particular transfer pricing databases. One of the issues identified during the scoping phase was that information asymmetries are a major obstacle to both the prevention and resolution of tax disputes. Therefore, there was broad support for improving access to transfer pricing information while recognizing challenges related to cost, coverage, and data quality. Strong interest was noted in exploring ways to improve access to transfer pricing information, though tempered by cost governance and feasibility concerns. Among the ideas mentioned were the creation of a public UN transfer pricing database accessible to all member states and pooled purchasing through which countries could jointly negotiate more favorable access to databases. The proposed approach is therefore to continue exploring the most efficient ways to improve access to transfer pricing databases before any concrete proposals are developed. It is important to mention that over time, other measures under the protocol could also contribute to reducing information asymmetries more broadly. And so the issues for the committee. are whether the member states could share perspectives on the possible governance arrangements of a potential UN managed database, including questions of financial implications, management responsibilities, participation of member states and safeguards for data confidentiality and integrity, and whether other types of databases could be considered such as databases compiling bilateral APAs, or map cases. And so that is the overview. And now I'll hand over to Michael as we go through the questions related to the presentation. And those are the questions for us to discuss over the next two days.


Germany · Co-Lead · Michael Kollitsch [31:00]:

Thank you so much, Marlene. Thanking you on behalf of the entire room. I'm very convinced that this presentation was very helpful. and refreshing everyone's memory of the concept note and it gave us also a shared starting point for our discussions. It goes without saying that has been quite a lot, but it only shows how extremely productive the work stream has been since August and it also shows what kind of ambitious agenda we have ahead of us for the coming days. As they say here, Hakuna Matata, no worries, we'll take it step by step. And with that we start with the first set of questions. If I'm not mistaken those are the questions related to the concept of optionality and we find them on slide six. I would kindly ask the secretariat to bring us back to slide, thank you. And a quick reminder, as we mentioned previously, the presentation has been circulated to you so it might be helpful for you if you do not want to stick to that slide in particular. But now let us focus on these three questions related to the concept of optionality. I would like to open the floor on them. There we go. We open the floor today morning with Switzerland, Switzerland please.


Switzerland [33:33]:

Good morning everybody. First of all, very important, big thanks to Tax Justice Network Africa for inviting everybody without exclusion to the event on last Friday, I think event or party, I think this qualified as a party, so it's highly appreciated. And then I would like to go on to thank the co-leads of this work stream for their work. You did a great job in conducting the discussions and also in compiling the different solutions in the concept note. Optionality is in our view a very essential feature and it helps to increase the use of that protocol for a maximum number of countries. Every country can choose from a wide menu the instruments that help and we fully support it to have as far as possible optionality in that protocol. So this is a very general remark. And my understanding is that we would go through the questions and come later back to also questions such as what is a cross-border dispute? Is that correct? Okay, so I would then come back to that. Thank you very much.


Germany · Co-Lead · Michael Kollitsch [35:14]:

Thank you, Switzerland. On the last question, it is correct, so we take it step by step and following the concept of optionality, we will have a look on the scope and in the context of diving into the scope, we will consider the question of cross-border tax dispute and how to define it. With that, I give the floor now to Italy. Italy, please.


Italy [35:39]:

Thank you, Goli. Good morning, everybody, and thank you for making this huge work during the work stream and having now this presentation, which we really appreciate very much because as Switzerland said, I think that this is a very good approach to offer comprehensive menu of mechanism in the desire in the hope to be really inclusive and allow states to accept what fits more for their interest. Perhaps discussing thoroughly on all these, maybe we can find that we are not so far and there could be a mutual advantages in exploring something that could be revenue for some country, but that have been a good solution for others which are more experienced in that. So thank you for offering that optionality is a good thing. Of course, we have then to discuss which are the core mechanism, which is the baseline provision where everybody has to agree upon. So going to the second question, question B, this superseding effect perhaps it's more difficult to give at once an answer because Perhaps the superseding effect has to be discussed in a second time where we also discuss as a more clear vision on the relationship with the other legal instrument. This is an issue perhaps for European countries because you know European member states are in a special position as far as integration is concerned so that we have some directive. that bounds us to have some common approach on that, but they are mainly procedural, so I do not think that it could limit the path for an agreement in that, but of course we should explain more what our position are so that to be on the same page on that. And again, I think that the legal basis should be clarified later as far as it is a new legal basis. Under a technical point of view, going on question three, we think that optionality is a real good thing, but on the technical point of view, we would prefer not to have opt-in, opt-out mechanism as in the MLI. OECD instrument has already been envisaged because we think it doesn't offer a clear certainty. We will prefer a traditional way to express explicit reservation on some of the tools we will be agreeing on this protocol because it clarifies the position of countries and permit a best comprehension in the sake of certainty. For the moment, I think that it is our first reaction. We will have time to speak more on that, and we really encourage open discussion on that because indeed I think that this approach you choose could really offer a path to be inclusive in a very sensitive issue for some countries. Thank you.


Germany · Co-Lead · Michael Kollitsch [39:16]:

Thank you Italy. Indeed it will not be the last opportunity for us, this is not the only necessity to discuss the concept of optionality. So if you feel the need to mention it later on, this will remain possible. I give now the floor to Kenya please, Kenya.


Kenya · Africa Group [39:42]:

Thank you, thank you Chair, thank you members, welcome. Caribou in Kenya, Hakuna Matata. I think that means welcome to our country. There are no problems. Everything is okay. So I think I'll make my remarks on behalf of the African group. Well, we do realize that the issue of optionality and the first item mostly is on at the conceptual stage. And so of course, we do realize we'll be getting to details of dispute prevention and dispute resolution in detail as we move. The AG appreciates the work and contributions made by the colleagues, the secretariat and the United Nations member states in the development of the concept note which you have gone through. So on behalf of our group, we support the proposed approach of developing a comprehensive menu of mechanisms for prevention and resolution of tax disputes with a common baseline and optional provisions. And so we, at this stage, I think we agree about that, but I will also invite member states to make their contributions on the same. Thank you.


Germany · Co-Lead · Michael Kollitsch [41:02]:

Thank you, Kenya, for that intervention on behalf of the African group. The floor goes now to the United Kingdom.


United Kingdom of Great Britain and Northern Ireland [41:12]:

Thank you, Mr. Kolig. Good morning, colleagues. As it's my first day joining the committee in person, I just want to take the chance to thank our hosts, the Kenyans, for the lovely welcome that we've received in this beautiful country. And I would also like to thank the colleagues, Michael and Marlene, and the secretariat, and everyone who's participated so far for for the work we have done in workstream 3 to get to this point. On the questions on the proposed approach to the workstream, we strongly support optionality. We think that this is the way to ensure maximum inclusion and adoption. We are content with the way the workstream has worked in terms of identifying the current issues and evaluating the existing potential approaches. and we are open to one or more core mechanisms being identified. On point B, we are firmly of the view that mechanisms under the protocol, including core mechanisms, should not have any superseding effect over existing and proven effective provisions, absent of course the option that most parties may agree to do so. whether we think that the mechanisms under the protocol should seek to address gaps in the current system or aim to provide improvements where the current system itself has been identified as falling short. Of course, that itself will require some analysis and research within the workstream. We would support consulting widely on the current operation of the existing dispute resolution and prevention architecture. That can include, and should include, discussing with civil society, academia and, importantly, the business sector and groups representing taxpayers. On point, we do not have any firm view at this stage on how optionality should be operationalised. We think the way it works under the Convention for Mutual Assistance and Agreement and the OECD Council of Europe Agreement, which is a system of reservations, works well, but we are open to various different ways of doing that. Thank you, Mr. Chair.


Germany · Co-Lead · Michael Kollitsch [43:38]:

Thank you, United Kingdom. Brazil, please, Brazil.


Brazil [43:52]:

Thank you, Chair. Well, in relation to, before I begin with, I would like to thank the co-lead, Marlene, and the Secretariat for preparing these documents that were, and the presentation that was very detailed and informative and constructive. In relation to the questions on the screen, yes, we do agree with having a comprehensive menu of mechanisms. maybe with the potential wording if they can be found in other documents, so a collection of excerpts to guide us in relation to C, I'll skip B for a moment. It's a bit difficult to have a position, just as the previous delegate mentioned. I see some good points in the arguments raised by Selina Italy. And but it would be necessary to see the drafting to figure out how to proceed honestly in each case. And in relation to B, the example that occurred to me is what would we do, for instance, again, it's I think it's very difficult to set a position here without seeing the text. And I don't want to use that argument over and over, sorry for it, but But just imagine a provision with a different statute of time limitations. It could be shorter or longer. How would we apply it? And should the tax authorities have the power to use a more restrictive timeframe? So the map or the request for resolution type disputes is two years in one document, in three years in another one, or three years and four years. It's a bit confusing for me how to proceed in those situations. That's all for the moment, thank you.


Germany · Co-Lead · Michael Kollitsch [46:02]:

Thank you, Brazil. I totally agree that it might be difficult to have a definitive stance on any of those questions, but as was said at the beginning and as you well know, this is a conceptual undertaking. We are not there yet and we will continue working on it and the idea is to flesh those ideas out going forward. And it is already helpful for the upcoming inter-sessional work in the run up to the next INC session to get something that inspires the next work steps. The floor is now Austria's. Austria, please.


Austria [46:45]:

Thank you, co-lead, and thanks for the presentation you have prepared, in particular also that you sent out.

Questions in advance of the session to be able to prepare for this. With regard to the questions on the screen, I agree and would like to echo in particular Switzerland and Italy, but also others who have said that we agree with the proposed approach.

With regard to question B.

From our point of view, it is really of utmost importance that the existing mechanisms in the field of dispute prevention resolution should not be undermined where the states involved consider them already as effective and efficient. This is particularly true and as was mentioned by Italy in the case for the relation between European member states.

And therefore we agree that the mechanism should not have a superseding effect unless the concerned parties agree otherwise.

But this is, I think, still can still be in line with the goal we should have under this work stream, which is to create mechanisms.

That are as efficient and as effective as possible.

And therefore we are also looking forward to exploring some some core factors that would have to be implemented by member states wishing to sign the protocol. And finally, as for the technical question, how this could be operationalized and of course also take into account that we will have to look at what we actually will have in the protocol eventually. But what came to my mind would also be just the possibility to make notifications, that each Member State could make a notification in which relationship the protocols and the different options in the protocol, the different menu items, so to say, should be effective and thereby taken into account the specific situation of bilateral relations.

Thank you.


Germany · Co-Lead · Michael Kollitsch [49:12]:

Thank you, Norway. The floor is now United Arab Emirates.


United Arab Emirates [49:18]:

Thank you.

Good morning, colleagues. As it's also my first day of joining, I just wanted to extend my thanks for the warm welcome that we've been given into this wonderful country, but also just to thank the chair and the co-leads for the hard work that has gone into putting together this concept note and the work performed today on this workstream. On point A, we echo the views of the Swiss and UK delegates that we believe optionality is an essential part to encourage maximum uptake into the protocol. We strongly encourage that the concept notes approach is that the mechanisms that may be adopted under the protocol do not have a superseding effect on existing double tax treaties, but that further consideration could potentially be given to that whilst they shouldn't have a superseding effect to verify that they don't have any conflicting effects as well with existing double tax treaties.

Thank you.


Germany · Co-Lead · Michael Kollitsch [50:25]:

Thank you, UAE. Thank you for this food for thought. Norway, please, Norway.


Norway [50:35]:

Thank you, co-lead. And let me start by saying good morning to everyone and also picking up on the chair's information that he had went on a safari over the weekend. So did I. I would like to again thank the government of Kenya for hosting us here with such amazing opportunities to experience so many different things. So thank you again. And also thank you to you and Marlene for all the work that you have done in organizing these discussions and the secretariat for preparing all these notes that we have been discussing over the course of the intercessional work. Coming back to the questions that we are discussing now on A, I think our views are the same as has been expressed by, I think, everyone so far. We agree with this approach of first looking into different mechanisms and then identifying those that could form a core of this protocol. We also think that optionality here is very important. And that takes me into question B. It is quite important that we are able to preserve the mechanism in our treaties that work well for us. I think this is more of a general point in these proceedings. We also think that optionality is important to ensure broad participation and also recognize the different experiences and level of progress in dispute prevention and resolution among member states. And for C, on the operationalization of of the optionality. Before we have looked deeper into the different mechanisms that will be available in the protocol, it's hard to take a firm view on it. Maybe some food for thought. We note Italy's point on reservations and declarations. I think we should explore this further. With respect to whether it should apply on a case-by-case basis, we think it's important to also take into account the need for tax certainty for taxpayers and also governments, but also maintain equal treatment between taxpayers so that they should have the same level of access to mechanisms for dispute prevention and resolution. So that's all for now. Thank you.


Germany · Co-Lead · Michael Kollitsch [53:48]:

Thank you, Norway. I give now the floor to India. India, please.


India [53:56]:

Thank you, Chair. We believe that the protocol at this stage must consist of only the core mechanisms, a base minimum, and that base may perhaps be mechanisms like the mutual agreement procedure. in the August plenary sessions, the member states have underscored the recognition of MAP as a central element of the dispute resolution system and has also stressed that there was a lot of need for significant reinforcement of that mechanism, highlighting the concerns of time limit effectiveness and accessibility. So taking into consideration of the discussions that have happened till now, India believes that at this stage we need to focus on the core mechanisms and for example like a map which is the simplest mechanism to administer and importantly for many countries who do not yet have a map like procedure in place in their domestic system before expanding the architecture to include other mechanisms we need to ensure that every member state can actually realistically implement what is agreed. So our view is that we should include in the protocol those mechanisms that we are certain about and which all countries can administer today. We also believe that if we overload the protocol with complex or resource intensive procedures such as arbitration, we risk creating obligations that many countries simply cannot operationalize. and that would probably undermine the participation compliance and the credibility of the instrument as such. So at this stage our collective priority we believe should be to make the preliminary foundations work. That is to have a map-like mechanism that is accessible, functional and supported by domestic law of the member states. We must keep the protocol easy to negotiate and easy to implement for all. Any commitment we place in the protocol will need to be backed by domestic legislation, administrative capacity and institutional readiness. MAP-like procedure being the simplest of all the mechanisms, maybe we should explore that first. Protocols, we believe, are not cast in stone. So we will always have the ability through the Conference of Parties to modify, expand or add mechanisms in future. So let us build a protocol that is realistic, implementable and inclusive, starting by putting basic mechanisms in the protocol. On the point B, we believe that the mechanisms under the protocol should not have a superseding effect and rather be complementary as it supports the, as it protects the domestic sovereignty concerns. Thank you.


Germany · Co-Lead · Michael Kollitsch [56:50]:

Thank you, India. I give now the floor to Zambia. Zambia, please.


Zambia [56:57]:

Thank you so much. And thank you so much to the Secretariat, I think, for that presentation, very elaborate. At least it brings all of us to speed in terms of where we are. I rise to just add a comment in support of, I think, the comments that have come from the other delegates. Particularly, I want to add the voice to the position that was shared by the Africa Group. and obviously also supported by the other members who have come to the floor. So in terms of question one, indeed we are in support of the approach that is being proposed where we have a comprehensive menu of mechanisms for prevention and resolution of tax disputes and there perhaps from that list we can then identify those we consider to be core mechanisms. And we are hoping that in line with the submission that has come from India, these core mechanisms should be those that are easy to, uh, to be implemented by, uh, member countries. I think those mechanisms that can be prioritized and do not place an administrative burden, especially on those resource constrained jurisdictions. In terms of question two, I believe with the proposal being that we want to make these mechanisms optional, then I guess we want to agree that these mechanisms should not have a superseding effect if we are to maintain their optional nature. Thank you so much.


Germany · Co-Lead · Michael Kollitsch [58:59]:

Thank you, Samir. China, please.


China [59:09]:

Thank you, Chair.

Dear colleagues, good morning.

I would like to thank the Chair, the Secretariat, the co-leads.

And all delegations for their continued efforts, which have enabled us to make positive progress for the preliminary discussions on the second protocol. First of all, we support the approach, the proposed work method for determining the scope of the dispute resolution and prevention mechanisms to be included in the protocol before discussing how each of them should apply in practice. We would like to emphasize that the optionality of the mechanism has received broad support from many delegations. We believe that each tool and prevention mechanism under the protocol should be optional. Our aim is to ensure the widest possible participation and support from Member States. and thereby generating greater outcomes in the future. At the cabinet stage, we consider question number three, the opt-in and opt-out approach is appropriate. This is our preliminary thinking.

Thank you.


Germany · Co-Lead · Michael Kollitsch [1:00:18]:

Thank you, China. The floor goes now to Spain. Spain, please.


Spain [1:00:27]:

Good morning, everybody. I'd also like to join my voice in thanking you all with regards to the presentation made. Just as other colleagues have gone, and this presentation on the topic of dispute resolution, we think it's a very clear and comprehensive presentation and shows that there has been a lot of work done on this and progress made. on the topic set out in slide six in particular, as noted by others. We also support that these be optional, that the mechanisms be optional. We would also like to highlight, just as others have done, that this mechanism, or main mechanism, should not replace existing ones. Thank you very much.


Germany · Co-Lead · Michael Kollitsch [1:01:41]:

Thank you, Spain. Next is Chile. Chile, please.


Chile [1:01:48]:

Good morning, everybody. Since this is the first time I'm taking the floor, I'd first like to thank our hosts for their warm hospitality and of course thank the Secretariat and the co-leads for the excellent conceptual document presented, which is helping us to order such important discussions. Just as others, we think it's important to highlight the flexibility that we need to have in order to have greater participation in this Protocol. We welcome the optionality presented in the concept note. We would also like to highlight that we also need to speak about prevention and resolving disputes. So when we come to see the mechanisms which will be made available, we need to see which are the most relevant and timely to incorporate and we need to take or keep those two notions in mind. Thank you.


Germany · Co-Lead · Michael Kollitsch [1:03:05]:

Thank you, Chile. Next is Germany. Germany, please.


Germany [1:03:09]:

Thank you for giving me the floor. And I want to mention the very constructive discussion in the work stream so far and thank all the involved parties for all the work done. And I'm very happy to be able to be here and thankful for the very, very warm welcome. We agree with A and B, a comprehensive mechanism for those willing seems the best and most inclusive way to go forward. In our view, the protocol should offer a self-standing set of mechanisms that can be made use of, but should not limit the access to already existing or later established mechanisms. And we support a design underlying a distinction between the mentioned core mechanisms and the rest of the comprehensive menu through a design and the use of various degrees of optionality. And very briefly, maybe to the way of, to like to go forward, we agree that the signing of the protocol should be optional itself, in a sense of kind of like a general optionality. Dispute prevention in our view could very likely be implemented in the sense of case by case optionality and dispute especially arbitration, could be implemented through some kind of prior opt out optionality because many states are unsure if they are able to include arbitration in a possible map mechanism. But like other states like Brazil, I think have already mentioned, it seems important also in our view to start working on a concrete provision, on concrete provisions and text soon to grasp better how despite different degrees of optionality we are planning here, which we believe are able to ensure broad participation and inclusiveness. legal certainty and applicability need to be ensured. That's all for now. Thank you very much.


Germany · Co-Lead · Michael Kollitsch [1:05:30]:

Thank you, Germany. I give the floor now to the Russian Federation. Russia, please.


Russian Federation [1:05:37]:

Thank you so much, sir. I'm going to speak Russian. Now, firstly, I'd like to start by conveying my gratitude to the Secretariat for the work they have carried out. also express my gratitude for the concept note which was provided to us and all the questions which were raised, which I hope will help to guide us to come up with the responses and the answers which will form the basis of our future work. Now, regarding the questions which were put to us, question A, we believe that it would be good to start with the development of a comprehensive list of mechanisms regarding disputes and it would be based on the divergent views and the capacities of various Member States. This will ensure that most States will ratify the Protocol. We also believe that the Protocol will require a minimum basis, a key mechanism here will enjoy greater priority when it comes to resolving disputes. So we'll have like a minimum basis, a minimum foundation, And that is something that is absolutely essential. Concerning question B, I think that quite clearly here, the protocol should not automatically replace the existing mechanisms, existing dispute resolution mechanisms, which are included in existing treaties, unless we agree to something else. The framework can be flexible. For example, taxpayers and tax authorities usually resort to the usual procedures and they would only turn to the protocol if there is mutual agreement about applying it. Such flexibility could also be enshrined in our agreement, namely that the parties can resort to the use of the protocol if they both agree to it. Regarding question C, it seems to me that the protocol could set out that states at the stage of ratification or signature could declare which mechanisms they will agree to apply. It is also important that states be in a position to change their initial declaration based on changes to their law. especially in light of the fact that perhaps the trust in certain mechanisms might grow over time. So we back what India said here. This is all I'd say about this for now. Thank you.


Germany · Co-Lead · Michael Kollitsch [1:08:36]:

Thank you, Russia. This is not meant to be a reaction specifically on an intervention that we have just heard, but I would like to raise your awareness or to specify a little bit the question. In general, we are not yet in a position to of identifying any core mechanism but we have heard some voices pointing out to some consideration that should be taken into account when doing so later. I would only like to highlight at this stage that the question on the core mechanism or including so on the menu but also on the core mechanism is not limited to dispute resolution. So I think it is reflective of the discussion so far that the whole protocol is also meant to focus on dispute prevention. So only, you know, that it is not kind of overlooked. With that, I want to give the floor to Poland.


Poland [1:09:46]:

Thank you very much, co-leads, for giving me a floor. First of all, I would like to thank co-leads and group of working stream three for the excellent preparation of the documents, which are very comprehensive and very helpful for our discussion. So thank you very much for that. I would like to be very brief. I don't want to repeat all the arguments. So as far as the letter A is concerned, We would like to support the proposal which has been presented in the document. We also believe that the optionality should be granted here. And as far as the superseding effect of the identified mechanism is supposed, we would like, we also believe that we do not have to construct our protocol in that way that we have a superseding effect for the other solutions. Protocol should be rather one of the alternative for the taxpayer to be used in the when there is a need to somehow set up, settle the dispute between the contracting states and the competent authorities. So we support all these countries which do not want this superseding effect. As far as the letter C is concerned, I think that the basic reference to case-by-case basis mechanism could be good with maybe some selection of the specific mechanism for opt-in, opt-out solutions, maybe in case of arbitration, for example. So I think it could be further discussed. Of course, it depends what kind of solutions finally we will provide in our protocol. So thank you very much up to now.


Germany · Co-Lead · Michael Kollitsch [1:12:20]:

Thank you, Poland. Our next speaker is a distinguished delegate from Ghana.


Ghana [1:12:29]:

Chair, colleagues, and distinguished delegates, I thank Marlene and Michael for their efforts and for this morning's presentation. Ghana aligns herself with the statement delivered by Kenya on behalf of the Africa group and welcomes this opportunity to contribute to this discussion on optionality in her national capacity. At the outset, Ghana supports the proposed two-step approach. We consider it practical to begin by elaborating comprehensive menu of dispute prevention and dispute resolution mechanisms before determining which among them should constitute the common baseline for all parties. However, we need to stress that greater clarity is still required on how optionality will function in practice. Optionality can provide welcome flexibility, particularly for developing countries with diverse administrative capacities. Yet, without clear operational parameters, we risk introducing uncertainty rather than enhancing cooperation. For Ghana, from Ghana's perspective, three points merit emphasis. Number one has to do with structure development of the menu of mechanisms. We support the deliberate inclusive design of a full suite of potential mechanisms for both prevention and resolution of disputes. This should reflect the experiences of all countries, especially developing ones, covering administrative, cooperative and treaty body tools. Number two, defining the core mechanisms with equity and balance. Once the menu is established, identifying which mechanisms forms the minimum baseline must prioritize accessibility, fairness and capacity considerations. Core mechanisms should not impose beddings that developing countries are unable to operationalize. The baseline must therefore be proportionate and reflect the genuine common ground. Number three, operationalizing optionality in close coordination with workstream one. We agree with the concepts notes call for close coordination with workstream one. which is essential to ensure coherence between the overall architecture of the protocol and the specific provisions governing optionality. This coordination should clarify the following: how parties would exercise their choices, how these choices would communicate, would be communicated and updated, what safeguards would ensure that optionality does not undermine certainty, predictability, or fairness in tax cooperation. In conclusion, Chair, Ghana supports optionality as a tool to enhance inclusiveness and respect for different levels of administrative development. But optionality must be designed with precision, so that flexibility does not come at the expense of effectiveness of the protocol. We therefore look forward to collaborating closely with all delegations to ensure clear, implementable and equitable provisions on optionality. I thank you.


Germany · Co-Lead · Michael Kollitsch [1:16:20]:

Thank you Ghana, thank you in particular for highlighting the need to coordinate with Workstream 1 and to, as a quick reminder, in the concept note it is explicitly mentioned that the practical application and the modalities would have to be reconciled with Workstream 1 later on. I want to give the floor now to the distinguished delegate from Japan, Japan.


Japan [1:16:50]:

Thank you, Co-Lead. First of all, I would also like to thank Secretariat and Co-Leads for preparing the documents and the presentations today. Regarding the questions, Japan also agrees with the proposal, the proposed approach of developing the comprehensive menu and core mechanisms.

And for question.

B, we also agree that the mechanism and the protocol, including the core mechanism, should not have a superseding effect unless the concerned parties agree otherwise.

It should be up to states to choose whether existing mechanism or the new protocol is to be used.

For question C, when operationalizing optionality in practice, we would prefer prior opt-in out declarations like the MLI.

Considering a case by case could be problematic in terms of tax certainty, as Noe mentioned earlier.

And would also be burdensome for both taxpayers and tax administrations. But as others said earlier, maybe it depends on the actual mechanisms and how the protocol is organized.

So we would like to come back later and look forward to future discussions.

Thank you.


Germany · Co-Lead · Michael Kollitsch [1:18:18]:

Thank you, Japan. Our next speaker is Israel.


Israel [1:18:24]:

Thank you, colleagues, and thank you for preparing the presentation itself, it's very easy for me to work like that when I have it before we are talking about it, before me. Now, we agree with others that the optionality will bring wider participation in the protocol. We also think that core mechanism should be optional and should not proceed the other mechanisms. We would appreciate further elaboration and examination regarding situations where there is no tax treaty to explore what.

The meaning of core would be in those cases.

Thank you.


Germany · Co-Lead · Michael Kollitsch [1:19:21]:

Thank you, Israel. Maybe we will get the opportunity in the context of our discussions on the scope. And with that, I would like to hand over to the chair for a very important announcement.


Chair · Rami [1:19:36]:

Okay, thank you. This is one of my most favorite announcements, which is like we can have 10 minutes coffee break. I think it's also Everyone like it. So it's 10 minutes, coffee break, and we'll be back. We have a long list of member states asking for the floor, so please make sure that you're back on time because we need to start on time to make sure that we give a chance for everyone to speak. Thank you. I'm sorry to say that the coffee break finished. So now we are back and we're going to continue the discussion. So now I'm going to hand over to the co-lead to continue the discussion and resume the floor. Thank you.


Germany · Co-Lead · Michael Kollitsch [1:41:43]:

Thank you, Mr. Chair. Thank you for the coffee break. We resume with the list of speakers, starting with Portugal.


Portugal [1:41:58]:

Thank you very much, Mr. Kollitsch. Let me show our appreciation to you and also to Ms. Parker, our co-leader in this work stream for the concept note that was delivered to us and also for the presentation of today. We believe that these two are instruments that help us to understand and to try to share with the membership of the INC some contributes that may be useful. In respect of the question under letter A, we would like to reaffirm our position in respect to the virtuosity of optionality that we identify when applied to something like what we are building upon under Protocol 2. We believe that such an internal optionality will be crucial to have most large participation possible in this instrument and for sure we can go along the concept note in respect of working upon this optionality. We also agree that our efforts should primarily be aimed at reaching a comprehensive menu of mechanisms for the prevention and resolution of tax disputes. And just subsequently, we will be in position to try to identify the possibility of determining that some mechanisms could be provided under the protocol for application by all States Parties under which we are calling the core mechanisms. Given this, you can deduct and conclude correctly that we fully support the proposed approach in the document. In respect of letter b, We agree with all the interventions that we heard until now from the distinctive representatives of all delegations that took the floor in respect of the superseding effects that the protocol should not have in relation to mechanisms that are already in force. And most -- allow me to underline the interventions by our distinguished representative of Italy and also the distinguished representative of Austria in respect of the crucial importance that this topic may have to European Union member states. In respect of letter c, that is the question that I do not have a straight answer to give you. We are listening to the various interventions in this respect, the nuances that are being expressed, and we believe that we will be able to have a clear view in respect of this question, how we operationalize the optionality. for sure in the future moments, especially since we will be some idea of concrete mechanisms are we talking about. Thank you.


Germany · Co-Lead · Michael Kollitsch [1:45:13]:

Thanks to you, Portugal. One next speaker is Cote d'Ivoire.


Côte d’Ivoire [1:45:27]:

Thank you, I would like to thank and commend the Secretariat for the quality of their work and also thank the colleagues from workstream 3 which have enabled us to have this very clear concept note. I would also like to support the position set out by Kenya on behalf of the African group. also expressed by Zambia and other countries. So we want to support the proposal by the Secretariat while indicating that it would be appropriate to have an inventory of dispute resolution and prevention mechanisms available amongst which we can identify the mechanisms we believe to be the base mechanism. However, at this point, from a national standpoint, we would like to specify that we need to continue reflection on optionality. So continue reflecting on the notion of a base mechanism. So what are the characteristics of a definition of this base mechanism? and what will be the scope and consequences which we would like to imbue a base mechanism with. For us, the protocol is optional, so states have the possibility of adhering to it or not. That should be indicated in terms of reference and mandate. We believe that a country that adheres to the protocol should be links to minimum obligations contained within this protocol, which they can not remove themselves from. The notion of a base mechanism should be part of these minimum obligations. If not, it would have no sense to have a protocol which is optional and which then has content where everything set out is also optional. So a country adhering to the protocol should have a minimum of obligations, which they need, or which they would be bound to due to their adhesion to the protocol. So in short, we think it's important to be clear on the concept of a base mechanism and on its scope in relation to the issue of optionality. This to ensure that the base mechanism can be considered as the basis on which all state signatories to the protocol can agree on. And perhaps it can have a preeminence nature over the existing mechanisms and bilateral agreements without replacing them. Thank you.


Germany · Co-Lead · Michael Kollitsch [1:49:34]:

Thank you, Cote d'Ivoire. I give the floor now to our next speaker from Ireland.


Ireland [1:49:44]:

Thank you very much, Chair, and thanks to you and Marlene and all the secretariat for all of the work leading up to this session and for the presentation this morning and the questions provided, which form a good basis for this discussion. On paragraph we agree with the proposed approach and we look forward to discussing what may be optional core mechanisms in due course. On point we agree with others that these mechanisms shouldn't have a superseding effect and where effective procedures and options are already in place for jurisdictions they should continue to be able to utilise them. On point clearly much of of this will be determined in due course as we shape, as the shape of the protocol is developed further. We believe that in order to enable as many jurisdictions as possible to participate, the ability to make notifications to opt in and opt out appear sensible. It'll obviously be important to allow parties to opt into additional mechanisms at a later date as circumstances change. We share some of the comments made in relation to the use of a case-by-case approach. We share concerns that this potentially could increase uncertainty for taxpayers and other parties to the protocol and I think we should be cautious around that. Thank you very much, Chair.


Germany · Co-Lead · Michael Kollitsch [1:51:07]:

Thank you very much, Ireland. The floor goes now to Belgium.


Belgium [1:51:14]:

Thank you, Co-Chair. Thanks again to Walter, to co-chairs for all the work done and your very structured approach and presentation also during the informal work stream sessions. So on paragraph A, we support the idea first developing the comprehensive menu of mechanism for the prevention and resolution of tax disputes. Belgium also possesses a comprehensive toolkit for addressing and preventing these disputes, more particular on tax dispute prevention, which can also be very important as the co-chair already touched upon. We have in Belgium an extensive cooperative tax compliance program, so maybe it will be interesting to also look further into the prevention side more as well on the whole menu. The broad mapping exercise will allow all countries to identify the tools that best match their needs. And in the second step, it will be important to identify the core mechanisms that will be accessible to all parties. We want to make sure, of course, that these core mechanisms are interpreted the same way and consistent across all the jurisdictions. On the superseding effects, we agree with what many other speakers already said that the protocol should not automatically supersede any existing or future dispute resolution frameworks, particularly for us those already in force between the EU member states. which was already touched upon also by my distinguished colleagues from Austria, Italy and Portugal. For us, this is very essential for the legal certainty and administrative efficiency, but broader, we think that any derogation from existing bilateral or multilateral instruments has to be subject to the explicit agreement between the parties. On the operationalizing of the optionality, we think that we should explore modalities that allow the broadest participation. We are more in favor of the idea of opt-in, opt-out declarations, but we agree with what the distinguished delegate of Ireland said before, that these that it must be possible to later change your opt-in or opt-out decision depending on changed situations. So whatever approach is adopted, we want to see again that there is consistent application of it across the jurisdictions. Thank you.


Germany · Co-Lead · Michael Kollitsch [1:54:11]:

Thank you, Birgit. Belgium. Our next speaker is Mauritius.


Mauritius [1:54:19]:

Thank you, Chair. Good afternoon to everybody. Let me join others to commend you for the, both you and the other colleague, for the comprehensive work that has been done up to now, and also for the brilliant presentation that has been made on the concept note. That said, Chair, first of all, I would like to say that we are aligned with the position of the Africa group. in terms of the approach that has been proposed, approach which I believe is quite logical in the way it's presented in terms of, you know, first of all identifying the whole comprehensive of possible mechanism for dispute prevention and dispute resolution out of which we would, you know, try to discuss and probably retain some of them and from the retained ones identify those mechanisms that would be considered as core and others that would be considered as the remaining ones. So on the question of optionality also we are aligned with that. As regards, you know, the question on paragraph b, the question of effect, whether it would have a superseding effect or complementary effect, I think the question is a bit premature and we would not be, you know, in favour of, you know, having the mechanism having superseding effect, but then remains to be further discussed in light of, you know, the detailed provisions that will be provided to us. Thank you, Chair.


Germany · Co-Lead · Michael Kollitsch [1:56:01]:

Thank you, Mauritius. The floor goes now to the Netherlands.


Netherlands (Kingdom of the) [1:56:09]:

Thank you, colleagues. I would also like to join others in their expression of their appreciation to the co-leads for preparing this very extensive and comprehensive concept note. In relation to A, we also support the proposed approach of first elaborating a comprehensive menu and then look at what can be a core mechanism. Further on, we also echo others that have said that they wouldn't like this protocol to have superseding effect. And in relation to question C, we would like to draw your attention to a possibility of perhaps singling out some mechanisms to apply for certain countries and other mechanisms which would like to apply in respect to other countries. And that would also relate to question B, a little bit of the superseding effect. As for example in the European Union, we do have some mechanisms which work very well. So in the relationship between two European member states, some mechanisms you want to opt out for, but maybe you could apply them in relation to non-European Union member states. Thank you for having us make this intervention.


Germany · Co-Lead · Michael Kollitsch [1:57:44]:

Thank you Netherlands for that intervention. The next one is coming from Algeria. Algeria has the floor.


Algeria [1:57:53]:

Thank you, Chair. First of all, I'd like to thank the Secretariat and co-facilitators, but also the delegates for the concept note, which has really highlighted the different points of view of the member states. on the issue of the prevention and resolution of disputes and also proposed approaches to find solutions so that we can have a protocol which is effective and relevant. Before setting out our national position, we'd like to support the position set out by the Afghan Group. We also support the approach proposed within the context of this protocol when it comes to the identification of prevention mechanisms and resolution of disputes. It's important to place an emphasis on the issue of prevention, not just the prevention of disputes, as mechanisms of prevention and the resolution of disputes. So these mechanisms should be offered to countries according to an optional approach to enable them to implement mechanisms according to their own needs and capacities. That will enable the maximum possible adherence to the protocol. On the second issue, on the place or the scope of the protocol with relation to existing mechanisms, we believe the protocol should not substitute existing mechanisms. unless parties agree to it of course, but could complement them if states believe that this will be relevant. On the third issue, which is optionality, this is important as it will enable a progressive adoption approach to enable states to prepare and adapt to the various mechanisms according to their relevance. On the core mechanism, We think that core mechanism should be a more procedure and then other procedures can be looked at posteriorly. Thank you.


Germany · Co-Lead · Michael Kollitsch [2:00:28]:

Thank you Algeria. I want to give the floor now to Rwanda. Rwanda.


Rwanda [2:00:39]:

Thank you so much, Chair. I would like to commend Marlene for the well elaborated presentation. and the secretariat for the work well done so far. Rwanda align with Ghana, Mauritius, Zambia, Algeria, and Kenya, and other many members on the issue of optionality and strongly support the proposed approach of first elaborating possible dispute resolution mechanism and subsequently identifying those core mechanisms which in principle should be available for use by all parties. Regarding the core mechanism, we strongly advocate for MAP because it has been used by quite a large number of developing countries and the tax administration in those states have the tools and are familiar and the capacity to administer those tools. But that being said, these cannot stop other options also to be elaborated in the protocols, but they should remain optional. We also agreed that the mechanism under the protocol, including the core mechanism, should not have a effect unless the concerned party agreed otherwise. This will lead to complementarity where domestic dispute resolution mechanisms are in place. On point C, Rwanda supports how optionality could be operationalized. We also support the point of opt-in, opt-out by declaration at the entry point so that we remain flexible and developing country can be able to operationalize these dispute resolution mechanisms. Thank you so much.


Germany · Co-Lead · Michael Kollitsch [2:02:51]:

Thank you, Rhonda. The floor is now-- I give the floor now to France.


France [2:03:01]:

I will speak in French. Thank you, Chair. And as other colleagues, I'd like to start by thanking you for the quality of the concept note and for the proposals which form a real solid foundation of our work and allow us to have fruitful discussions. To respond to the various questions, I think it's good to have a sort of menu or list of all the different options available. In particular, when going through the notes, you can see there's potential interest in certain usual mechanisms within certain branches of law, but maybe not within tax. So I think it would be interesting to see to what extent it would be useful with our excise to include these and whether we have an interest in including certain mechanisms within our reflections. Of course, this menu should be as extensive as possible in order to enable as widespread adoption as possible of the protocol. That's why we're also in favour of optionality. And to respond to question c, what form could optionality take, I think we should study all possible cases. keeping in mind that at the end of the day it needs to be able to be implemented both for administrations and for those being administered. So this will require a certain degree of limits of possible choices at the end of the day. This reminds me of discussions we had on OCDE multilateral treaties on the degree of flexibility and we found a kind of compromise between total flexibility which is too complex to administer, and the lack of flexibility, which would not have enabled widespread adoption. I think we need to find the right balance there. Finally, along with many other European colleagues, I think that the instrument should not supersede existing mechanisms for reasons already set out. At the end of the day, we also speak a lot about the rights of taxpayers, and the idea is to prevent disputes, or to settle disputes. And the end goal of this is to ensure that taxpayers are only taxed once. So we need to ensure that we don't have a result which means that There is a hierarchy of norms which would limit the rights of certain taxpayers. So we need to ensure that our work and that the protocol we create does not supersede what already exists. Thank you.


Germany · Co-Lead · Michael Kollitsch [2:06:33]:

Thank you, Franz. Our next speaker is from Bangladesh.


Bangladesh [2:06:39]:

Respected chair and distinguished colleagues, a special thanks to colleague for presentation such a beautiful presentation regarding protocol and place three questions before us to discuss. Overall Bangladesh agree with this process of the committee, but we have some common comments about it. Firstly, my first question, we think a country like Bangladesh requires a state-centric development and cost accessible dispute mechanism. We talk about second question, it is very much appreciable that Mechanism under the protocol including the core mechanism should not have a supersending effect. We support that question. We think meditation and consultation first, not immediate arbitration. Any binding arbitration only with the consent of both states. Cost must be equity shared with support for developing administrations. Question number three, we think we like Bangladesh do not accept mandatory international arbitration. Tax disputes must first go through joint review and meditation process and binding arbitration may be undertaken only if both government consent. Estate sovereignty must not be submitted to private arbitration panels. Thank you.


Germany · Co-Lead · Michael Kollitsch [2:08:47]:

Thank you, Bangladesh. The floor goes now to the Islamic Republic of Iran.


Iran (Islamic Republic of) [2:08:55]:

Thank you, colleague. The Islamic Republic of Iran supports a fully optional approach to mechanism for the prevention and resolution of tax disputes. as such as approach promotes border participation and respects institutional diversity among countries. Within this framework, Iran believes that conflicts and resource intensive mechanism, including arbitration, cannot be considered core or mandatory elements of the protocol. The high cost of arbitration and its reliance on extensive legal and administrative capacity make it impractical for many developing countries and risk creating a structural imbalance. Therefore, should arbitration be included in the protocol, it must be strictly optional and incorporated only through opt-in or opt-out modalities. We further emphasize that the protocol should prioritize simple, low-cost and accessible tools, such as map and preventive mechanism, so that all countries can implement them. Thank you.


Germany · Co-Lead · Michael Kollitsch [2:10:14]:

Thank you, Iran. The floor goes now to Morocco.


Morocco [2:10:21]:

Thank you, Khaled. Sorry.

I'd like to thank you and Anne-Marlene for the work you put into preparing the concept notes. First, we would like to support what Kenya has said on behalf of the AG, the African Group, with regard to question A. On our national capacity, we find appropriate the proposed approach of first elaborating a comprehensive menu of mechanisms before identifying core mechanisms, This will allow to fully understand all available options before committing to core elements, assess compatibility with national legal frameworks, and evaluate capacity requirements for each mechanism. We would like to suggest that core mechanisms should focus on fundamental elements like map, while more complex mechanism like arbitration should remain fully optional. regarding question B, we strongly support the approach that mechanism under the protocol, including core mechanisms, should not have a superseding effect. This approach will respect existing bilateral treaty mechanisms and preserves legal certainty under current arrangements.

Thank you.


Germany · Co-Lead · Michael Kollitsch [2:11:52]:

Thank you, Morocco. Next is Sierra Leone.


Sierra Leone [2:11:58]:

Thank you, Chair. Greetings, everyone. Thank you, colleagues, for putting the document together. Thank you for the presentation this morning. Sierra Leone's positions reflect administrative reality, legal sovereignty, and alignment with positions of the African group such as Kenya, Ghana, Ivory Coast, Rwanda, Algeria, Morocco and Etel. CILUN supports the proposed approach. CILUN believes in and supports a comprehensive menu approach. CILUN supports the committee's proposal to first elaborate the comprehensive menu of dispute prevention and resolution mechanisms. We believe this allows For full inclusiveness, Sri Lanka believes a menu approach allows developing countries to see all options, traditional, innovative, before agreeing to any binding obligations. Provides flexibility to accommodate capacity differences. Sri Lanka's tax administration has limited resources. A menu ensures mechanisms can be selected according to administrative readiness not imposed uniformly. It encourages transparency and fairness. Sierra Leone believes that by listing all mechanisms openly, Sierra Leone would have clarity about which systems are most expensive, most complex, most intrusive or sovereignty, most appropriate for high capacity versus low capacity jurisdictions. Sierra Leone welcome the first step. Sierra Leone would caution against premature identification of core mechanism. While the menu first, core second structure is acceptable, Sierra Leone would express caution about identifying core mechanisms that must be available to all parties. Developing countries differ vastly in capacity. It is unrealistic to expect every country to be able to operate complex mechanisms such as mandatory map deadlines, arbitration models, or binding expert panels. Imposing core mechanism too early risks excluding low capacity states, creating compliance burdens, reinforcing inequality in tax diplomacy. It also believes that risks of slippery mandatory binding arbitration into the call list. CLRN would strongly object to any attempt to classify arbitration or quasi-administration arbitration mechanisms as core. CLRN would insist that identifying core mechanisms must not undermine policy space, reduce sovereignty, taxing rights, create de facto obligations through peer pressure or treaty interpretation. For Sierra Leone, we believe that taxation is core sovereignty functions and should not be outsourced to external tribunals. Thank you, Chair.


Germany · Co-Lead · Michael Kollitsch [2:15:12]:

Thank you, Sierra Leone. Our next speaker is from Nigeria.


Nigeria [2:15:20]:

Thank you very much, Chair.

We would like to thank the Secretariat for the good work being done so far. as well as for the presentation this morning. Nigeria would like to align itself with the position of the Africa group, which was expressed by Kenya. We also want to endorse the position of some other colleagues, including Ghana, Zambia, Sierra Leone, and so on. Nigeria is endorsing a dual stage approach which is similar to the position earlier presented by India. And this approach involves, first of all, developing a comprehensive menu of dispute resolution mechanisms followed by an open discussion to identify which mechanisms should be considered core. This discussion, of course, will take into account relevant factors and details that will ensure inclusivity. The phased approach preserves policy space for jurisdictions while establishing a meaningful flow of available tools. And we believe that this idea of having core mechanisms will give some kind of stability, if you like, to the protocol. We thank you for the opportunity.


Germany · Co-Lead · Michael Kollitsch [2:17:00]:

Gladly. Thank you, Nigeria. The floor goes now to Cyprus.


Cyprus [2:17:08]:

Thank you very much for giving me the floor. Allow me first to thank the secretariat and the co-leads for their hard work in preparing this issues note and for the very clear presentation that we had this morning. I would also like to extend our sincere appreciation to Kenya for hosting us in this beautiful country, which many of us had the chance to explore over the weekend. Cyprus welcomes and supports the inclusion of optionality in the issues note. We believe that the mechanism under discussion should remain optional and that they should not supersede existing mechanisms unless of course the parties explicitly agree otherwise.


Germany · Co-Lead · Michael Kollitsch [2:17:55]:

Thank you. Thank you, Cyprus. Next is Uganda.


Uganda [2:18:05]:

Thank you, Chair. Chair, like the colleagues have mentioned, we would also like to thank you, Marlene, and the team for putting this together. It's quite comprehensive. and very easy to follow. Chair Uganda aligns itself with the position of the African group as articulated by Kenya and in national capacity would like to support the position which was put forward by the Ivory Coast with regard to clarifying the principles for the core, identifying the core mechanisms. I think that would have been an important question of its own. The other comment, Chair, regards again question A, the last part which says that the identified core mechanisms should in principle be available for for use by all parties. That's a little confusing. Our understanding is that all the mechanisms are available for use by all parties. I don't know why that had to be added. I submit, Chair.


Germany · Co-Lead · Michael Kollitsch [2:19:58]:

Just a moment, please.

Thank you so much, Uganda. We took note of the question towards the end regarding the confusion, so we reflect on that later and for the time being continue with our list of speakers. And this is the United Republic of Tanzania.


United Republic of Tanzania [2:20:59]:

Thank you, Chair. Tanzania Alliance is safe with the statement made by Kenya on behalf of the Africa Group, and we wish to make a few interventions on our national capacity. Chair, on the first question, we support developing a comprehensive non-strict menu followed by the identification of a narrow set of core mechanisms for prevention and resolution of tax disputes. However, both the menu and the identified core mechanisms must first exclude or avoid establishing any mechanisms that have historically disadvantages, disadvantaged developing countries. And second, core mechanisms have to be subjected to periodic review and impact assessments based on developing sensitivity test. On the second paragraph, we do not support automatic overriding. The protocols mechanism should not override existing treaties. The drafting should include a treaty preservation rule favoring existing bilateral or multilateral treaties. Furthermore, Chair, we hold the view that the protocol should not override the domestic laws of respective state where a dispute arises in the absence of a treaty and in such cases available domestic mechanisms should be given priority. Thank you, Chair.


Germany · Co-Lead · Michael Kollitsch [2:22:46]:

Thank you, Tanzania. We continue with Lesotho.


Lesotho [2:22:51]:

Thank you, Chair, and thank you for the work done. We align ourselves with the interventions made in particular on the issue of available menu. We just want to talk to the issue of whether they should supersede and hopefully I'll not be getting ahead of myself. We've talked about having to improve some of the existing mechanisms. For example, there's a talk to actually improve on the efficiency and transparency of MEAP. So for us, to the extent that the improved mechanism will find themselves in the protocol, then our thinking and wish would be to have those superseding the existing mechanisms otherwise to be left to the parties. So I think that's one point that we'll be very interested in seeing as to whatever member states agree as an improved mechanism that in itself I think logically and by right taxpayers should be entitled to an improved mechanism. Thank you, Chair.


Germany · Co-Lead · Michael Kollitsch [2:24:15]:

Thank you Lesotho. Next is, is everything alright? We'll switch the lights back on, Mr. Thank you. So nothing prevents us from continuing with Sweden.


Sweden [2:24:33]:

Okay, thank you for giving me the floor.

And thank you very much co-leads for the work that has been done so far within the work stream. leading up to this meeting. I just want to mention that as regards letter A, we support the proposed approach mentioned in the concept note.

And as regards letter B, I just want to echo that many countries already said that the mechanisms.

Should not have any superseding effect. Thank you.


Germany · Co-Lead · Michael Kollitsch [2:25:16]:

Thank you Sweden. We take now Switzerland followed by Italy who already had the floor previously. Then we close the list of speakers for the time being so we have quite a significant list of stakeholders who asked for the floor. We will take them following our lunch break but first let us have Switzerland followed by Italy, sorry, Switzerland, Italy, Switzerland now.


Switzerland [2:25:44]:

Thank you, Mr. Chair. I just wanted to come back to letter B and the superseding effect. This is a question that we had to think about with the BEPS MLI, also with the pillar one. The question here is if you have a provision that's contrary to your bilateral existing bilateral tax treaty, does it automatically amend your bilateral tax treaty? And I think there's three different situations you have to distinguish here. You have the situation where there is no treaty between two countries. There you don't have to really even think about superseding effect because there's nothing to supersede. You have the situation where you might be adding a provision to your existing tax treaty, like for instance, a map type of map mechanism where that does not exist or maybe adding a arbitration procedure where that does not exist. Here too, you don't really care if the, you don't have to decide if you have a superseding effect or not because this is just a new provision that's not contrary to the previous treaty and the previous treaty remains the same. And then finally, you have the situation where a provision of the framework of the protocol would be amending your tax treaty. And in that case is where you have to wonder, is there a superseding effect or not? Now, of course, in theory, I think it's good to have a superseding effect because if you agree with another country, for instance, to add arbitration to your map procedure and you sign the protocol, if there's no superseding effect, you have to go back and also amend your bilateral tax treaty. And that is not very efficient. However, I think you need the very important caveat that we do have here. that there is a superseding effect unless the concerned parties agree otherwise because you want, you do not want a situation where, where countries do not sign the protocol because they want to avoid changing tax treaties in a way they don't want to change it. And I think we've heard that, uh, echoed by quite a lot of countries that it is very important, that when we do not want to change existing treaties, we do not get binded by signing the protocol.


Germany · Co-Lead · Michael Kollitsch [2:28:04]:

Thank you, Switzerland. I consider it worthwhile pointing out that what was actually stated or what was presented previously that it is by the concept currently is that by default there should be no superseding effect but that wouldn't prevent state parties to agree differently if they deem it fit. As said previously, we continue now with Italy, close the list of speakers later on but for that purpose I'm going to hand over to the proper chair Italy first.


Italy [2:28:40]:

Thank you co-chair for giving me the floor the second time very quick I want to pick up an issue which is very important for us and it is the content of the core mechanism we will then explore more totally when speaking about the scope but want to pick up some that Indian Ivory Coast and others said which is very important to prioritize those core mechanism we agree about that. In due respect, for us, it would be very important to include into those core mechanisms the prevention side of the issue, as you also suggested. This is something that comes directly from the TOR, because paragraph 10, letter F, also mentioned the idea of prevention. And I honestly think that this is a very important side of the coin, because it really helps for having a mobilization of domestic resourcing have the possibility to handle the relationship with the taxpayer first without having cost of assessing or making other steps on that. So I noted that Africa is very active in participating in compliance program, and perhaps it is important to hear from African country if they also benefited from that. In due respect, also mentioning resources for dispute resolution in the issue of capacity building could be an option that could be explored first. Thank you.


Germany · Co-Lead · Michael Kollitsch [2:30:22]:

Thank you, Italy. I wasn't suggesting myself to also include core mechanisms for the prevention side. I was merely, you know, recalling that it has been the general understanding so far that this protocol is not meant to only tackle dispute resolution but also dispute prevention and it was a gentle reminder that this is a kind of a separate dimension that you might reflect upon, but eventually everything is up to you, member states. So with that, I would like to hand over to the chair.


Chair · Rami [2:31:03]:

Thanks to the two co-leads for their great work actually, and this excellent concept note and very good discussion. So now we're going to go for the lunch break. 00 again. But also I would like to clarify because I get some questions about the intersessional agenda and how it's going to look like and also the provisional agenda for the February session. So I would like to let everyone know that once we close this session, I mean this week, by the end of this week, we're going to release the intersessional agenda. agenda for meetings for the three work streams and the provisional agenda for the for February session in New York also it's now presented to the bureau and maybe like very soon also I think by the end of this week also be released as well. So this is just a very quick update about how things are moving forward and that all the documents will be in your hand to plan your meetings. and have your calendar just blocked for these important meetings. So thank you all, and we will be back after the lunch break to discuss another set of questions by the TOCO leads. Have a nice lunch break. Thank you.