(16th meeting) - Fifth Session of the Intergovernmental Negotiating Committee on the UN Framework Convention on International Tax Cooperation (INC Tax) - 3 to 13 August 2026
General Assembly
Date: 12 August 2026
Language: English
Transcript: https://transcripts.un.org/en/asset/k14/k14zi6pr08
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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INC · Co-Lead · Khalid [38:49]:

So, dear colleagues, friends, sorry for keeping you waiting. There was a Bureau meeting that took place and it took a moment. So, thanks for your understanding. Let us resume where we left off. And I said earlier before the lunch break that we had a list of speakers. I have it still in front of me. At the same time, I see that At least two delegations have lowered their hand. I don't -- it was earlier this morning, Mexico and France. Well, France? Focus now. So Mexico and France were asking for the floor. So the invitation stands. Okay, well, okay, then. You're good? I see, thank you. Okay, so we have a list of speakers, we take them, but we close the list as it is right now. So we kindly ask you to refrain from raising your hand now on that topic because at some point we just have to move on to the next chapters. No worries, as we said this morning, we have a buffer, like according to our schedule, we would end our discussions tomorrow noon, But we do have tomorrow afternoon, so no worries. Can you please unlock that? Thank you. And we continue. Now we continue with Mexico. Mexico, please.


Mexico [40:33]:

Thank you. Mexico welcomes the draft protocol too, and we thank the colleagues for all their work. While we would have been keen to have another issue such as high network individuals or illicit financial flows as the focus of this protocol, we do recognize the need to get this discussion right as not doing so could lead to the power imbalances when it comes to the dispute resolution within tax cases. Over the past decade, we have seen an increase of tax related investor state dispute settlements, which often have financial and policy effects. To this end, we see the benefit of including language on including tax authority determination mechanisms within this protocol. Under such determination mechanisms, One that we already consider in my country, when an investor brings a claim and the respondent's assessment of said claim is that it should be addressed via an applicable tax instrument, the tax authorities of the home state and the host state should come together to determine whether or not the claim can proceed to an investor dispute settlement. This could support states in getting their tax authorities involved to determine whether tax -- where tax-related cases should go.

And that would be all.

Thank you.


INC · Co-Lead · Khalid [41:52]:

Thank you, Mexico. Thanks for stressing the importance of our work and also for -- thanks for flagging the issue that you just outlined. And, yeah, we would welcome further interventions to that effect and shared experiences. We continue with Senegal, Senegal, please, the floor is yours.


Senegal [42:23]:

Thank you very much, Chair. I'll try to be very brief and not take up too much time. I am very pleased to have the work presented by the co-facilitators, which is of great quality and is an excellent starting point. I echo the comments by the African group, especially with regard to the excessively detailed nature of the text, and these details would be more appropriate in other instruments, whether in appropriate documents or other annexes. In our national capacity, we had a few comments with regard to the adjustments that were proposed where a certain flexibility would be required so that this post hoc adjustment can be carried out. This is under paragraph one of Article 25 on amicable proceedings. These adjustments ought to be made regardless of the timeframe needed. If you look at this, even if You can see this in Article 25, there's a certain flexibility that certain countries had already issued reserves on, including my country, Senegal. Why? Because we need to ensure that the timeframes are aligned for the adjustment. That's the first concern. As for the preliminary agreements on transfer pricing, There is a great deal that ought to be reviewed here when it comes to the appropriate deadlines for the transaction selection of methods. And it also would be important that in our future work, there should be other considerations linked to the tax conventions in terms of characterization, contracts and so forth that would have a major effect on how to prevent disputes. So these are the considerations that we wanted to share with you. Thank you.


INC · Co-Lead · Khalid [44:52]:

I thank you, the Senegal, for sharing those. I give the floor now to the Philippines.


Philippines [45:04]:

Thank you, Khaw Li. Effective tax dispute prevention and resolution mechanisms are essential for protecting domestic tax bases, ensuring cross-border investment certainty, and upholding the principles of national fiscal sovereignty. The Philippines strongly supports the provisions on simultaneous tax examinations, joint audits in host territories that comply with domestic procedural laws, reliance on valid tax information exchange instruments, and strict confidentiality protections. We support taxpayer initiated prevention mechanisms such as advance pricing arrangements, advance rulings and cooperative compliance arrangements provided they remain voluntary and subject to competent authority discretion. We welcome the provisions allowing competent authorities to decline taxpayer initiated requests based on administrative resource constraints and practical visibility and the wording providing that the initiation of prevention mechanisms must not suspend or delay ongoing domestic audits, assessments, or collection procedures. We stress that dispute prevention and resolution tools must explicitly respect deferring stages of technical and administrative readiness among states parties. For jurisdictions that are less advanced in utilizing complex mechanisms, participation must remain optional and non-mandatory. Tax administrations must retain full autonomy to determine whether, when, and to what extent they engage in this mechanisms based on domestic visibility, institutional readiness and national policy priorities. We emphasize the importance of robust technical assistance, specialized auditor training and practical guidance tools to level the playing field for developing countries. Furthermore, we welcome paragraph two, which explores a phased and pilot program implementations between willing parties. We support flexible target timeframes that accommodate complex transfer pricing cases, and administrative capacity limits. We support voluntary, non-binding mediation and conciliation as constructive options to break MAP impasse. The Philippines has reservations on mandatory binding arbitration. Compulsory arbitration may encroach upon national constitutional sovereignty and deprive domestic courts of final authority over revenue collection. Dispute resolution must remain consent-based and grounded in MAP. We urge the negotiating body to focus on voluntary prevention tools, robust information exchange, capacity building, and non-binding dispute resolution that respects sovereign rights and varying capacities of developing countries. Thank you.


INC · Co-Lead · Khalid [47:48]:

Thank you, Philippines. Previously, Brazil was raising its flag.


Speaker 8 [47:59]:

Play all songs of the Great Indian Dysfunctional Family.


INC · Co-Lead · Khalid [48:48]:

So we have more member states asking for the floor. I said earlier that we have to move on and in particular, as a point where we also have to move on with the stakeholders. So therefore, we take a couple of stakeholders first. We acknowledge that Switzerland, the United Republic of Tanzania are raising their hands. So we will take you following the stakeholders and we start with the African Union.


AU [49:16]:

Thank you, colleague, for giving us the floor. And thank you to you and the Secretariat for the work that you have done so far. Given the presentation we saw in the morning, we acknowledge that a lot of work has been put into this protocol. The African Union would like to align itself with the position of the Africa Group as presented by Ghana, with also the positions that were articulated by Mauritius, Kenya, Algeria, Nigeria, Ghana in its national capacity, and now Senegal. And we appreciate the comments that also emerged from the from Brazil, India, Papua New Guinea. We would like to reinforce this with a few points. We support the objective of establishing a comprehensive framework for the prevention and resolution of cross-border tax disputes and recognize the importance of improving tax certainty and cooperation between tax administrations of various jurisdictions. At the same time, we agree with the Africa Group that in its present form, the draft is very detailed administratively, but more specifically for a legal framework. We therefore support the proposed that more details in terms of procedure and operational provisions should be put and moved into annexes, guidance or implementation instruments or notes and acknowledge that this should not be done at the expense of losing the necessary guidance to support countries without domestic mechanisms or experiences where needed. We also wish to underline the importance of ensuring the protocol reflects the different levels of capacity among tax administrations. Mechanisms under the protocol should be designed in a manner that allows countries with different administrative technical and legal capacities to participate effectively and should not create obligations that are disproportionately difficult for low capacity jurisdictions to implement. We reinforce this point as has been explained by multiple African countries on the administrative and policy challenges they face at national level when it comes to implementation. On the definitions, we support the Africa group's position and commit that the use of harmonized definitions across the convention and its protocol is efficient while ensuring that this definitions are sufficiently broad to accommodate different legal systems, administrative structures and treaty practices. Turning to the dispute prevention mechanisms, we particularly share the Africa's group concern regarding the administrative demands associated with APAs and similar mechanisms and we support the call for greater clarity on the interaction between advanced rulings and the domestic anti-abuse provisions so that the protocol does not interfere with legitimate domestic measures designed to protect the tax bases of developing countries. We look forward to working with the Africa Group to submit our written inputs. I thank you.


INC · Co-Lead · Khalid [52:04]:

I thank the African Union and give the floor now to INESC.


GATJ [52:10]:

Thank you, co-lead, for giving us the floor. I'm speaking on behalf of the Global Alliance for Tax Justice. From the start of this process, civil society has shared concerns regarding the direction taken by this second protocol, not only regarding different options envisioned in the protocol, but also regarding the role that the protocol is ultimately intended to play. We have four comments. First, we would recommend the urgent inclusion of both a preamble and an objective section to the draft. This will help give more clarity on the problems it aims at solving and how it all links to the framework convention. Secondly, we also remain concerned that many of the options proposed build the very problematic The options proposed build on the very problematic system that fuels tax disputes, especially the transfer pricing system. Furthermore, Protocol One is currently considering alternative methods for profit attribution, including through the discussion on a reasonable allocation of profits, but Protocol Two mechanism seems to ignore this. Thirdly, regarding the legal base. As reflected in the definitions in chapter one, the protocol would take ground in the current bilateral and multilateral tax treaties architecture. Yet, it appears to us, building on last week's discussion, that the relationship between the framework convention and existing agreements has not been agreed upon. On the contrary, we understood that many countries have expressed, as regards article 21, a strong urge to question these existing agreements and to advance towards a new multilateral set of rules. We are therefore worried that this approach undermines the protocol by introducing unnecessary complexity. Lastly, we understand that the key purpose of this protocol will be to implement Article 9 of the Convention. From last week's discussion, it seems that there are still some questions around the precise scope and application of this article. For instance, several delegates expressed concern about the scope of Article 9 and sought clarity on whether it applied to cross-border disputes or domestic disputes. We find it critical to ensure that protocols in general remain closely connected to the broader convention and contribute to effectively operationalizing its provisions. Maintaining this coherence is important to strengthen the convention as a whole and avoid creating standalone instruments. Thank you.


INC · Co-Lead · Khalid [55:21]:

Okay, we continue with the Global Alliance for Tax Justice, please.


GATJ [55:29]:

Co-lead, I speak on behalf of the Global Alliance for Tax Justice and the African Civil Societies Organization working group on the UN Tax Convention. We have a general concern about the approach of introducing rights for multilateral corporations to initiate mechanisms within the protocol. We believe that the most common approach within the UN law is for the UN member states to define their commitments and hold each other to account, but not to define rights for corporations. We believe that dispute prevention mechanisms can be introduced without defining rights for corporations. On the specific issue of APAs, they are often presented as a means of providing certainty within the existing transfer pricing system. but evidence shows that they do not address the fundamental weaknesses of that system. In some cases, they can deepen them. The 2014 Lux Leaks scandal exposed how APAs have been used as confidential arrangements enabling multinational enterprises to significantly reduce their tax liabilities in jurisdictions where they conducted substantial economic activity. The Apple case similarly demonstrated how long-standing tax arrangements could ultimately be challenged, resulting in 13 billion euro in tax being recovered by a single jurisdiction, despite the underlying profits arising from the global sales. This is an example of how APAs provide neither fairness nor certainty, and thus it is unclear why they are relevant for the UN tax convention. For developing country tax administrations, APAs also come at a significant cost. They require considerable technical and administrative resources while reinforcing reliance on a transfer pricing framework that has consistently proven unfit for purpose. APAs lock in questionable profit allocation methodologies for years. and due to their legally binding nature, constrain tax authorities' ability to respond when aggressive tax avoidance or profit shifting is subsequently identified. We are particularly concerned about Article 2.3 in the protocol on coordinated unilateral APAs. Coordination between tax administrations does not by itself resolve these concerns. Where jurisdictions negotiate or align separate agreements with the same multinational enterprise, Taxing rights can still be determined through confidential case-by-case arrangements rather than transparent and universally applicable rules. This risks creating a patchwork of negotiated outcomes that will favor multinational enterprises and more powerful tax administrations, while leaving developing countries with weaker bargaining positions and potentially diminished taxing rights. The question therefore is not simply how to make APAs more efficient or more accessible to tax administrations. It is whether the protocol should legitimise an instrument that remains rooted in a fundamentally flawed transfer pricing framework. We do not believe that it should. We urge Member States to ensure that this protocol advances structural reform rather than entrenching transfer pricing and its derivatives, including APAs. Thank you.


INC · Co-Lead · Khalid [58:54]:

Well, I thank you. We have heard the Global Alliance for Tax Justice, and we continue with Ataf. Ataf, please.


ATAF [59:02]:

Thank you very much, co-leads. And I want to join others that have taken the floor to congratulate co-leads and secretariat for excellent work in putting together the details of this protocol. This is truly appreciated. Our submission, we want to align our comments with the submissions made by Ghana on behalf of African group and of course other African countries that have spoken before, including the African Union submission. Just a few comments. I'll follow the structure that was presented, sticking to the first two chapters. The first one is on definitions. On the definition, particularly item D of definition, our submission is that we include multilateral agreements because there are also certain regional agreements that promote exchange of information. and they are not necessarily conventions. And so just for clarity, we insert the words multilateral agreement there. A good example is an instrument that ATAF has got is called ATAF agreement on mutual assistance in tax matters and is one of those that will be quite instrumental in that space. There is also another concern, which is something you can think about in terms of definition of the applicable tax instruments. When you're talking about those instruments must be those that establish loose rules of allocation of taxing rights. It's good to ensure that that is also consistent with the framework itself. Moving on to the second chapter on prevention. The details provided for APAs by Latin, what Latin and advanced, I think those are very useful details. We also align our submission with others that have said that whereas the details are a bit a lot, but I think they provide very useful information in terms of procedure and of course there's some legal requirements and so we can agree to them. been this way at this level, but of course as we progress with the negotiation there is need to have more legal drafting and then the other details can be in the commentary. Three technical observations. One is the protocol needs to be clear on commitment to the implementing state parties to have the necessary domestic laws. There is reference to domestic laws being used in terms of guiding countries that are entering into this mechanism, but needs to be very clear that member states in any case needs to have those in place. Then on the APA requirements, the requirements that are listed in paragraph four of this document, no three, These need to include some slightly more very important documents that need to come together with the application. One of that information is about functions that are, who be performs risks to be assumed and assets that are going to be used by the parties involved in these arrangements, the proposed comparable data sets, and of course, the critical assumptions that have been proposed by the taxpayers. Then on the issue of optionality of the preventative measures, like others, we have the view that many developing countries, including African countries, they have not really implemented this mechanism, including the basic one, the APA. Currently, just very few African countries by count, not more than five now, that are actually in the process of introducing APA. So making this to be a common mechanism, We need to be careful with that. And if we are to go down that route, then we need to consider capacities and reasonable timelines that allow state parties to implement these measures based on their capacities. Lastly, you asked the question about the timeline. I think we support the idea of flexibility on timeline. especially when negotiations involve complex matters. And so that flexibility is something we welcome. And in relation to capacity building, just a proposal that in the framework convention itself, there's a chapter that speaks to capacity building. It's very important that we still make reference to that. and also maybe consider maybe many of these provisions still remain in the framework as opposed to the protocol. Having said that, we want to underscore the importance of capacity building being coordinated between parties, including regional and international organizations. And lastly, because others have commented on this, we strongly support on MAP procedure being the core mechanism for dispute resolution, Summit.


INC · Co-Lead · Khalid [1:04:24]:

Thank you, Adeb. Just on your last point concerning capacity building, allow me to point out that Article 2.10, it starts by saying in accordance with the capacity building commitment under the Convention, so that is expressly to emphasize that this is not a self-standing provision here, but it is anchored or has to be read and understood together with the Framework Convention and its broader for our objective of capacity building. So, um, next is, uh, BCAS. BCAS, please.


BCAS [1:05:06]:

Thank you, co-lead. Ordinarily, the preference is not to speak before the member states, so this could be an exception. Compliments to the co-leads and the entire team for preparation of these documents. The mechanisms offered in the document are really interesting, and especially the ones which are dealing with dispute prevention mechanisms. Some technical comments, the words without prejudice to are at times difficult to interpret and may lead to confusion. My comments are on para five of article 2.4. The second last sentence provides that the outcome of the cooperative compliance arrangement is not binding. The last sentence of para five uses the term without prejudice to. It provides the outcome of the common compliance arrangement shall be without prejudice to the position taken by the party in domestic audits, etc. Now, I believe it should be worded differently. It should be worded other way around. So the stand to be taken by the party under the domestic audits should be without prejudice to the outcome of the common compliance procedure. If the administration has already taken a view on a particular issue in the domestic audit, then the issue of application of corporate compliance arrangement does not arise. There is already a dispute and one has to go to prevention mechanism. There was a discussion on the definition of cross border dispute. Ordinarily, one would say that cross border dispute involves tax resident of one country and administration of another country. The suggestion is that where possible, tax dispute involving subsidy of a foreign company should also be considered, although it's kind of within the jurisdiction disputes, but these mechanisms are important. because, uh, this subsidies essentially involve the foreign investments and they need to have proper guidance on the dispute resolution mechanism. Similarly, disputes related to withholding tax obligations of a resident entities, putting, putting the payment to a non should also be treated as a cross border dispute. A small comment on para 11.7 para two provides That submission of, uh, request under Article 11.1 to 11.4 shall not require suspension or delay of the proceedings under the domestic law. Uh, my suggestion is that once a request is submitted, uh, under one of the prevention mechanisms, the domestic law procedure should ideally be kept on hold. Even if the outcome may not be binding, if a dispute can be prevented, it's logical to, you know, attempt the dispute provision rather than getting into something when the dispute is going to arise, thank you.


INC · Co-Lead · Khalid [1:07:47]:

Yeah, thank you very much. And on your first point, in principle, we let member states speak first. I cannot, however, promise the stakeholders that they will be given the floor and to withdraw the same promise a moment later. So we have two more stakeholders followed then by two member states that were coming late. ICC Italia, followed by DMUN Foundation, and then we're going to listen to member states again. So ICC Italia, please.


ICC [1:08:20]:

Thank you, Chair. We would like to thank the co-leads for the work done to present a complete draft of the text for the session. Every effort to reduce the burden in international tax dispute is deeply appreciated by the business community. We would like to intervene on protocol two from a technical perspective with a couple of comments aimed at providing legal certainty, proportionality, and the practical functioning of the proposed provisions. In these comments, we're going to focus on prevention of disputes. First, with respect to Article 2.2, we believe that the provision should clarify expressly if its scope is limited to the taxes covered by the convention or not. This clarification is important to reduce interpretative uncertainty on the mechanism. Second, on Article 2.4, we know that in some tax jurisdictions, there are comprehensive and detailed cooperative compliance regulations already. In such regulations, cooperative compliance arrangements are not limited to a generic dialogue with the tax administration, but are process oriented. Such processes are usually based on a structure ERM enterprise risk management methodology, including as an example, the definition of the task risk, the definition of the task risk maps, the methodology of measurement, monitoring and tracking, a system of internal and external reporting, a matrix of internal control and a clear segregation of duties. Therefore, if the intention of this article is to provide a baseline for coordinated cooperative compliance, we suggest that the article in paragraph three should include a set of standard process based items to be applied in this regard. Finally, with respect to Article 2.5 and Article 2.6, we would like to underline that audits are also process-related activities. Considering that these articles provide flexibility between the parties and that coordination can be discretionary or not complete between tax authorities, any misalignment between the authorities involved might create a significant burden for taxpayers. both in terms of timing and costs. Misaligned tax audits are longer, they bring costs and uncertainties. Therefore, the protocol should include guidelines to the parties, such as a safeguard for taxpayers in cases of unreasonable procedural complexity, duplication or delay. Such protection could be included in Article 2.9 with the objective of ensuring that lack of administrative coordination does not harmfully affect the taxpayer under audit. Thank you.


INC · Co-Lead · Khalid [1:11:11]:

Thank you. The floor goes now to DMUN Foundation.


DMUN [1:11:29]:

Thank you, Chair. The major group of children and youth and the DMUN Foundation support Articles 11.1 and 11.2 as useful mechanisms for preventing disputes and providing advanced certainty to both taxpayers and tax administration. We propose a limited number of revisions to ensure that these mechanisms are clear, accessible, and workable for parties with different treaty networks and administrative capacities. First paragraph one and five should clarify that a taxpayer may submit a request subject to the domestic law and administrative procedures of each party concerned. At the same time, those procedures, including any applicable fees, should be transparent and shouldn't create unnecessary barriers, particularly for smaller taxpayers. Second, in paragraph two and six, any deadline should begin only upon receipt of a complete request. We suggest the formulation within a reasonable period and where practicable within 120 days of receiving all information reasonably necessary to assess the request. The text should be also clarified that the acceptance of a request doesn't require a competent authority to conclude an arrangement or ruling or to accept the taxpayer proposed treatment. Third, the retirement in paragraph three and seven that an applicable tax instrument be in force may disadvantage parties with limited treaty networks. We invite consideration of whether the protocol itself could provide the necessary legal basis where the parties concerned expressly agree. This would broaden across while preserving state consent. For the information requirements should be and proportionate, we therefore suggest replacing any documents or information required in paragraph three, F and seven H with any other documents or information reasonably necessary and proportionate for the assessment of the request. For multilateral cases, competent authorities should, where possible, coordinate their information requests to avoid duplication and unnecessary compliance burdens. Fifth, any application to prior taxable periods under paragraph 4E and 8E should require the agreement of all competent authorities concerned, substantially similar facts and circumstances, consistency with applicable domestic time limits. It shouldn't automatically prejudice an ongoing audit or proceeding. Sixth. Both articles should contain common safeguards concerning confidentiality, legal effects, and revocation. Information exchange should remain subject to applicable confidentiality, data protection, and permitted use rules. An arrangement or ruling should bind only the participation competent authorities and cover taxpayers only while the stated facts, conditions, and critical assumptions remain satisfied. Retroactive revocation should generally be limited to fraud, material misrepresentation, omission, or non-compliance. Finally, we noted a technical correction in paragraph seven. The words are request under the paragraph one should read a request under paragraph five. These targeted division would preserve the preventive value of both mechanisms and while protecting taxing rights, avoiding disproportionate burdens and supporting effective participation by the administration at different level of capacity. Thank you, Chair.


INC · Co-Lead · Khalid [1:15:15]:

Thank you. We give the floor now to the United Republic of Tanzania, please.


United Republic of Tanzania [1:15:21]:

Thank you, colleagues. The United Republic of Tanzania appreciate the work undertaken on this draft protocol and supports its objective for preventing and resolving cross-border tax disputes. We fully align on the statement of the African group delivered by the distinguished delegate of Ghana and supported by many other delegations. On chapter three, colleagues, Tanzania supports MAP and the core dispute resolution mechanism. We believe priority should be given to strengthening MAP while mechanisms such as mediation, conciliation and arbitration should be reassessed further taking into account concerns raised by many jurisdictions. including resource constraints and their implications for domestic resource mobilization. This resolution should continue to respect its sovereignty, domestic legal systems, and different legal traditions. On chapter two, we recognize the usefulness of APAs, simultaneous audits, and joint audits. However, given resource constraints in many countries, Sufficient flexibility and the phased implementation supported by capacity building should be provided. Finally, Tanzania supports a concise high level protocol with a detailed procedures addressed through appropriate explanatory guidance. I thank you.


INC · Co-Lead · Khalid [1:16:49]:

I thank you very much. Switzerland next. Switzerland, please.


Switzerland [1:16:55]:

Thank you, Mr. Chair. Thank you for giving me the floor a second time. I just want to also to add as we go through this, I know at this point you're waiting for concrete proposals and I think that will be the case more in written comments. As we fine tune this text and the concepts, I think I mentioned optionality in my first intervention here. I wanted to echo the delegates who talk on building on what we have and I think as we are trying to figure out for the different positions how detailed to be, high, high level. It seems to me when we have procedures or institution in place that mainly work, we should really focus on not giving too many details and avoiding at least to create parallel procedures that are similar but not the same as those that exist. And if there are problems, be it in, I don't know, exchange of information or mutual agreement procedures, and that we wanna deviate for, we should really be clear why we're deviating from those, and why we're not building on what exists. And then in the situations where you don't have as much existing models or institutions I think many have talked about joint tax audits, which also Switzerland see with a certain difficulty. But in those cases then if we want to flesh out such procedures, then we will need more detail. So I think the level of detail or high level also depends of what's existing and we really want to avoid losing too much time creating details in matters where in the biggest part they work already quite well.


INC · Co-Lead · Khalid [1:19:01]:

Thank you Switzerland. We will consult briefly here in the front and we will be back in a second. Okay, let us start with bad news. In the interest of finishing early tomorrow, we're going to skip the coffee break today. And then second, this morning we said that we would take two chapters as a block. So we have just consulted, so it seemed to be better for us also to get more targeted input for us. tackle chapter by chapter, so therefore we going to focus now on chapter three in our next discussions. We have to be mindful of the time. Therefore, it is why we would ask you to try to stay within the three minutes in your interventions. So let us have a look on chapter three. We are going to enter the realm of dispute resolution now with the MAP provision as probably something that you will consider a key provision in this protocol. But chapter three is not limited to the mutual agreement procedure, but covers also other dispute resolution mechanisms, namely mediation and conciliation as well as arbitration. Everyone seems to be seeing the slides in front, but me So, just fetch the slides. For chapter three, we have total two slides. So, the first one, it is on a map provision. The question here in particular that are of interest to us is whether the paragraphs four, six and seven appropriately address constitutional limitations, parallel domestic proceedings and final unappealable decisions. Another question is something that we have already touched upon this morning. Are the timelines appropriate that are mentioned in that provision? So we have two times, the timeline of three months and an indicative timeframe of 24 months that is also mentioned in the provision. Are there any views on the bracketed timelines? Concerning mediation and conciliation, the questions are whether the procedure and timelines are workable and efficient. And as for arbitration, are procedures and timelines as well workable, efficient, are the rules governing the appointment of arbitrators sufficiently clear and workable and should independent opinion arbitration remains the default. So why is that? In particular when it comes to arbitration, some alteration have been made to what, we're given some attempts and thoughts to improve the arbitration procedure and one of the One of the changes or one of the proposals to that end that were made was to go for an independent opinion arbitration by default instead of a baseball arbitration style that you would normally encounter in other tax-related arbitration procedures. The provisions on mediation and conciliation fairly new so on that there are less examples out there. Therefore it is to a greater extent freestyle that was applied in drafting those provisions. That being said, those provisions are heavily inspired by best practices and guidelines that are already available. Can we have the next slide please? And chapter three comes similar to the chapter two on dispute prevention resolutions with a set of common provisions that those are the rules applicable to mediators, conciliators or arbitrators, their nomination and the qualifications that must be met by those third parties. We have a provision on fees, remuneration and expenses, as well as eventually the United Nations support. The questions here are whether the proposed disqualification criteria and cooling off periods are appropriate. Another question is whether the proposed scope of UN support accurately reflect the idea discussed at the previous session and during the intersessional period. And On this, you might remember that earlier today it was highlighted that capacity building is currently something that is reflected on the second chapter while the United Nations support is for the time, at this moment, it is limited to the third chapter and it was questioned whether this is something that is appropriate and this is something that is for all of us to consider going forward. Before opening the floor, I was asked to extend to you the ask to speak more slowly to allow interpretation to keep up with your interventions. Thank you. So the floor is open on Chapter 3. And Ghana is going to break the ice.


Ghana · Africa Group [1:27:30]:

All right. Chet, thank you very much. And Thank you for giving us the floor for the second time on this important subject. So Chair, straight to the point, I speak for and on behalf of the 54 Africa member state. And Chair, on Article 3.1 mutual agreement procedure, the Africa group generally supports the mutual agreement procedure as a primary and core dispute resolution mechanism under the protocol. and same should not be subject to any reservations. MAP has a long established history as a government to government process that preserves sovereignty while facilitating the resolution of cross-border tax disputes. It therefore provides the best foundation for international tax dispute resolution under a UN framework. However, the Africa Group expresses concern regarding inclusion of legally significant timelines and procedural obligations in the draft protocol. While timely resolution is desirable, complex transfer pricing and PE cases often require extensive factual and legal analysis. Treaty-based deadlines could create compliance difficulties and generate disputes regarding procedural compliance. The timeline should therefore remain indicative and have a degree of flexibility, especially for competent authorities facing capacity constraints, and on that timeline, Chair, We say that the draft can be then deferred to domestic laws to come up with reasonable timelines within to apply them, not to have straight timelines within the protocol. The AG would also like clarification on the proposal to eliminate double taxation in cases not otherwise provided for under applicable tax instruments. The meaning and the scope of this phrase is should be more clearly defined to avoid uncertainties regarding the powers of competent authorities. AG also recommends a hierarchical order to be followed in terms of the dispute resolution mechanisms, with MAP being the core and the first mechanism to be pursued before mediation and/or conciliation. Chair, permit me to also go to Article 3.2, Mediation and Conciliation. As you rightly indicated, this is a new and not much, which we generally don't have much issue with, but however, their role within the overall dispute resolution framework requires further clarification. It remains unclear whether these mechanisms should operate as the extent stand alone procedures, as concurrent tools within MAP or as optional facilitative process that may be invoked when appropriate. While AGIS generally favours retaining the voluntary nature of mediation and conciliation, it does not support making these procedures mandatory prerequisites before access to other dispute resolution mechanisms. Clear operational guidelines should be developed to ensure that these mechanisms remain efficient and accessible. Chair, also on Article Today, this arbitration, as stated consistently, the AG does not support the inclusion of arbitration, either tax treaty based or investment related commercial arbitration as one of the mechanisms for resolving cross-border tax disputes. Arbitration remains the most significant area of concern for the Africa group. While proponents see tax arbitration as a means of addressing unresolved map cases, many African countries remain concerned that mandatory binding arbitration will undermine the tax sovereignty and shift decision making authority away from constitutionally accountable institutions. Chair, the current proposal would allow tax arbitrations to be initiated upon the request of a single competent authority, once specified conditions are met. This approach is nothing other than forcing arbitration on another state. Such an approach will create unnecessary pressure African countries to participate in process that they have not expressly accepted because it violates their constitutional provisions. Other important point to worry is that the current article remains silent on investment arbitration, leaving open an increasingly common channel for tax disputes that further undermines tax sovereignty. And Chair, permit me to also touch lastly on the fees, remuneration, expenses and United Nations support. The cost associated with the mediation, conciliation and other dispute resolution mechanism may present a major obstacle for low capacity member states, including African countries. Financial constraints should not become a barrier to participation in mechanism established under convention intended to be universal and inclusive. Africa group believes that the protocol should provide for funding mechanism, technical assistance and cost sharing arrangement design specifically to facilitate the effective participation of African countries. Such support will help ensure that access to dispute prevention and dispute resolution mechanisms is determined by need and merit rather than financial capacities. Sir, Chair, I so submit and I will present again our written input for consideration. Thank you.


INC · Co-Lead · Khalid [1:33:19]:

Thank you very much Ghana, and we really look forward to your written input. A quick reaction on one point that you made in the beginning of your intervention. So no worries, not a follow-up question, but just a reaction. So indeed the procedures, mediation and conciliation as well as arbitration, those are not functional independent, but they rather like arbitration, mediation and conciliation, they complement the map. provision. This is because like in the articles themselves, you can see they are being stated that an agreement that is eventually reached facilitated by, for example, mediators or conciliators would then be like formally reached by virtue of a mutual agreement, according to the mutual agreement procedure. So therefore it is dependent on the MAP provision. Then second, you mentioned investment arbitration and earlier this afternoon or this day, we also heard other delegation Mexico speaking about investor state dispute settlement. I see no reason why this committee should not consider means to tackle the issue of ISDS in the context of our negotiations here. Not to say that this is something that needs to be done or can be done in the context of the protocol, but more broadly because it addresses the phenomena of tax related dispute settlement or not settlement. The floor goes now to Germany.


Germany [1:35:19]:

Thank you, Chair. Germany welcomes the overall design of Chapter 3, which strengthens the mutual agreement procedure and adds further flexible tools. We see this as a good basis to improve effective, timely dispute resolution while respecting national legal frameworks. I have a couple of comments and questions. Paragraph two of Article 3.1 currently contains no provisions for the case where an application for a MAP is not accepted. This should be supplemented. On Article 3.1 para 3, sentence two should be adapted to the formulation in para one in which I quote, "result or will result in taxation not in accordance" is written. Also at this point an obligation could be added that the applicant and the other competent authority are informed about the decision. On Article 3.1 para 8, in contrast to a result after successful arbitration, it is not provided at this point that implementation of the result only takes place if the taxpayer also consents to the implementation. For us, the reasons for this different handling would be interesting. Article 3.2, paragraph 5, the applicant should not only not attend the deliberations between the competent authorities, this should also apply to the deliberations between the mediators and conciliators. The following should therefore be added to the last sentence, I quote, in the deliberations between the competent authorities and the mediators or conciliators. Article 3.2 para 7, we would like to ensure that the introduction of mediation and conciliation does not undermine the timeframes by leading to open-ended extensions of the MAP timeline. To address this, we would suggest making the link between the MAP timeframe and mediation conciliation more explicit. We therefore propose that the text clarifies that mediation or conciliation may pause or extend the MAP timeframe only where the competent authorities expressly agree on a revised, clearly defined indicative deadline. And second, any such revision should be notified to the taxpayer concerned. On Article 3.3, in accordance with existing international models on arbitration and tax matters, arbitration should only be carried out if a taxation not in accordance with the provision of an applicable tax instrument has already occurred. Article 3.3, part one, the current draft provides that an arbitration procedure is initiated if any of the competent authorities concerned so requests. We would like to propose that the arbitration procedure is initiated when the taxpayer requests it. because it involves costs and obligations for the taxpayer. Thus, paragraph six provides that the taxpayer has to provide factual information or clarification. It could also be that he is asked to provide this information to the arbitration panel in person. All these things involve costs for the taxpayer. Nevertheless, it could be included that an arbitration procedure is not carried out if both competent authorities do not consider the specific case suitable for an arbitration procedure. This regulation would have the same effect as the current wording. As soon as one competent authority wants to conduct an arbitration procedure, it would be conducted only with the additional condition that the taxpayer would also want to conduct the arbitration procedure.


INC · Co-Lead [1:39:26]:

Okay, Germany.


Germany [1:39:28]:

Yeah, sorry, I'm too long. Can I make a last comment on Article 3.4? It's only two points. It should be clarified that material refers to both financial interests in and voting rights in. And secondly, and my last point, an arbitrator should not be excluded merely because he might hold just one share in an affected person. I thank you so much.


INC · Co-Lead [1:39:49]:

Okay, thanks, and we look forward to your written comments. Yes, yes. Okay, all right, so next we have France, Martin.


France · Martin [1:40:03]:

Thank you very much, Madam colleague. So as it is the first time today that I'm taking the floor on this protocol, I would like to thank you for the outstanding work that you've put in the document, which is a very good starting point. And just as a general comment, I share the view of my preceding colleague that in some points, as it's a protocol legally binding, some provisions do not really have their places here and they would be better suited in another type of document. So, but you already know that. So on the chapter here, that's where you want some inputs. I think on the map, a few comments. First, I don't really understand why there should be constitutional limits for some countries because if we consider as it's drafted here, it's not a core element, it's still something that you could opt in or opt out, that's to be discussed later. But then if a country opts in for the MAP procedure, I don't see why it should then oppose some constitutional impossibility or limitation after having taken this map article and adopted it. As of the timeline, I do share the point of view of my colleague from the Netherlands, who I think was the first one who expressed it. The timeline should be more indicative, thrive too, because otherwise it's going to be complicated. For mediation and conciliation, you said it's more freestyle. So France would be happy to explore freestyle because I think mediation and conciliation are not a mechanism that are already widely out there, so why not? And I think one of the important point in this drafted in your text would be that it doesn't enlarge add more time to the map. So that's the thing that's the last paragraph. So that would be an important feature of those mechanism if they were to stay at the end of the day. For arbitration, I would say that's a very important element for France to have arbitration in this protocol, even though it may be optional. But as we said, we could have a phased approach. Every country could have a phased approach, but at least Having this mechanism in is important. And just one comment on the nomination of the arbitrator. We don't really see why an arbitrator could not be part of the arbitration panel just because he's a national or resident of one of the competent authority. So maybe you could give us some explanation here. Well, for the rest, I think we would be mostly fine. We will give you some written comments on what parts could be taken out and put in another type of document. And one last word or sentence on Chapter 4, I know it's not here for this exact discussion, but I share the view that was expressed this morning that I don't see why this chapter is in the text if you don't have any common ground. Discussion is always possible. You don't need to have something in the text when it's not legally binding, because once again, this protocol is going to be legally binding, so having such blurry and procedure doesn't really fit with the exercise here. Thank you.


INC · Co-Lead · Khalid [1:44:01]:

Thank you, Franz. Chapter four is indeed not the current topic of our discussions here. We took note of your intervention nevertheless. But please everyone try to adhere to the subject matter of our discussion. moment and on the provision that you questioned, so as to why a national or a resident of any party should not be a mediator, conciliator or arbitrator, that was the intention behind us to ensure, to further ensure a level of impartiality. Whether this does the trick or not is, of course, up to all of us to decide whether this goes too far or whether you would consider this as something that is appropriate and is necessary. The floor goes now to Israel.


Israel [1:44:58]:

Thank you. Okay, regarding Chapter 3, Article 3.1, paragraph 2, Regarding the guidelines, regarding the access to map, we think that there should be guidelines or accepting current guidelines that are common. Regarding the protocol, the protocol states that access to map may be denied on procedural grounds. As I understand, the current guidelines say that only time time grounds are ground for denial. So do you think that there are more ground for denials? I'm not sure, but I'll be happy if you can explain. Regarding paragraph four, the domestic law limitation, we request clarification whether MAP decisions according to the protocol will override domestic law provisions in the same manner as bilateral treaties. We would like to know if this is what you mean. Regarding paragraph six and seven, regarding the suspension of the mutual agreement procedure, if the case is before court, court decision. So I understand that is the other way around in the current procedures in the bilateral treaties. So is it why did you do it the other way around? Because now the court procedures are the ones that are suspended and here you change the here the map is suspended. So we want to understand if there is a reason for that. And regarding paragraph seven itself, legally unable to deviate. Sometimes you said that only in the law if if I can say it's if the domestic law does not permit, but sometimes like the difference between court and high court, the high court, you cannot deviate by law, but the court you can deviate by law, but but it's a policy for us not to deviate. So maybe to make it sure that not just the law, but also policy. Regarding paragraph 11 timelines, we think about 24 months, but from the start date of the MAP case, we don't understand exactly if receipt of the case is the start of the MAP date or the receipt of the application. So if it's something before the start of the MAP case, we prefer more time than 24 months. paragraph three two the mediation and conciliation um regarding park uh park of seven uh completion of timeline um we suggest this six month timeline for the completion of the mediation um but we wanted to ask if with regard to paragraph 11 of the last of 3.2, if those six months are included in the 24 months, because we think that we should not include them because we want to have a little bit more time. I'm talking about paragraph 11 of 3.1. We prefer it to be different and to accumulate it. And we will submit specific comments in writing. We prefer it -- if we're talking about submitting the comments, can it be a bit at the 28th or is it before that?


INC · Co-Lead [1:49:47]:

For this protocol, it's the 24th. 24th. Okay. So we expect your written comments in Israel. Okay, thank you. All right, next we have Brazil.


Brazil [1:50:07]:

Thank you, Madam Colledge. I concentrate my comments on Article 3.1 and later we'll send some written comments for For this article and others, although we understand that the map procedure is an important dispute resolution mechanism, we have concern that the proposed provision departs in important respect from the traditional map framework reflected in Article 25 on the UN model convention. In particular, the draft introduce features that are more characteristic of taxpayer centered administrative procedures, including narrowly defined grounds for denying access, mandatory procedural steps prior to rejection, and indicative timeline for key stage of the process. While these features may enhance taxpayer access and procedural certainty, they also alter the balance that has traditionally underpinned MAP as a government-to-government mechanism aimed to resolving treaty disputes through cooperation between competent authorities. As drafted, the provision may significantly reduce the discretion of competent authorities in managing map inventories and determining the most appropriate use of administrative resource, potentially affecting the efficiency and functioning of the procedure. Regarding the paragraph three of the article 3.1, The requirement that a competent authority consult the other competent authority before determining that an objection does not appear to be justified constitutes a departure from the approach also reflected in the current framework. Under the traditional framework, the competent authority to which the case is presented is responsible for conducting the initial assessment of whether the objection appears justified. Of course, that there is also an obligation to notify the other competent authority if it's denied. So we think that this could create unnecessary administrative burdens, delay decisions on admissibility and require competent authority to devote resource to case that may not present a credible claim of taxation, not in accordance with the applicable tax instrument. So in addition, the proposed approach may reduce the effectiveness of the initial screening function traditionally exercised by the competent authority. So thank you. That's our comment for this article and we'll send written comments for the others. Thank you.


INC · Co-Lead [1:53:29]:

Thank you, Brazil. UK.


United Kingdom of Great Britain and Northern Ireland [1:53:38]:

Thank you, Madam Co-Lead. I'm going to give some high-level comments on the various articles in chapter three with a view to following up with some more granular points in written comments. Starting with the mutual agreement procedure, we strongly support the MAP and agree it should be the the cornerstone dispute resolution provision in line with some comments made by my distinguished colleague from Switzerland. We do appreciate the fact that the current draft draws heavily on UN and OECD models. We note that it has considerable additions to it, which creates concerns about a similar but not quite the same process. Many of those seem to have been drawn from the commentaries to the models. We would prefer it to be more aligned with the models but still to provide the detailed guidance that is needed for countries to apply it. Moving on to mediation and conciliation, we accept that those are very new concepts for cross-border disputes. In the UK, we have quite extensive experience with mediation for tax matters through alternative dispute resolution, and we are happy to share that. One comment that we would make on the current proposal is that we think that there is value in allowing the taxpayer to request Mediation. We think that taxpayers usually proportionately bear the majority of the brunt that can come with disputes and double taxation, so we think they should at least have the ability to request mediation or conciliation, but of course subject to agreement from the competent authorities. On arbitration, we've strongly supported the inclusion of it as an optional mechanism throughout and we won't repeat ourselves from previous sessions as to why. We do understand that many states are either unable or do not want to use arbitration. We note the concern raised in respect of investor state dispute settlement procedures. We noted the proposal from Mexico earlier about potentially addressing that within this convention. We think that is something that is worth exploring. In the UK, we don't generally accept ISDS and investment agreements, but where we do, we ensure that for anything related to tax, there is a competent authority filter mechanism which from what I understood from Mexico's suggestion was what they were also suggesting. So I think that is something that is worth exploring in this work. Just one technical point on the arbitration proposal. We note that there is a mechanism for objection to the appointment of one of the arbitrators, but only one objection. Um, we think this is an improvement on, on a previous draft we saw where there was an, an unrestricted right to object, but, um, we, we still are of the view that there should be no right of objection. Um, all of these arbitrators from, as far as we understand, are on a United Nations register. Each side gets to pick one. and between them they will then pick the chair. It just seems an odd procedure to have only one objection. What if the second one is even more objectionable? It just, I think, will lead to odd situations and further delays. But we will submit for now and we'll provide further detailed comments. Thank you.


INC · Co-Lead · Khalid [1:57:38]:

Thank you UK. The Netherlands please.


Netherlands (Kingdom of the) [1:57:44]:

Thank you, Michael. A lot have been said already by some delegates, so not to repeat everybody, but a few questions we have on the map and arbitration provision and in a more general sense, I think on the mediation and conciliation. Indeed, there are new concepts, but the way it's drafted now, it's always optionality in an individual case for competent authorities to agree or not agree. So that flexibility is already from a Dutch perspective welcome. On the MAP process, we have some questions. First of all, they are modeled after the UN and OECD standards and supplemented with some new provisions. But those that are similar, how would the commentary on those models at all be applicable, yes or no, or have relevance? For example, if you look at the case must be presented within three years, Does it mean that the guidance that is given in the current commentaries has relevance here too? Maybe not, but how would you then interpret and apply these sentences? That's a question. Secondly, Frans already mentioned that on the constitutional limitations, we have some difficulty understanding why the need it is to introduce it since in practice and in current treaties, this is not an an option not to go for the MAP or not to pursue and continue with the MAP. And it could also be, if it's not very worked out in more detail, countries could be behind constitutional limitation not to go further with the MAP case. Second one, or third one is the standard as it stands in paragraph one here is saying that you should file your MAP request to the competent authority of the party of which you are a resident, whereas there is an option And a lot of treaties now foresee that you can file your map request in either state. And we would like an option that you can also choose for that alternative instead of only focusing on this one. The question there arising too is that if you have a map provision which allow you to go to either state, is that a substantial similar provision as to this one? On the decision not to accept a map request, I know that the timelines refer to three months for accepting the case from a formal perspective and a further three months to see whether the objection is indeed justified. But from a practical perspective, normally that is done in one take, so it would be more logical to have one timeline applicable for the whole acceptance process. Currently the minimum standard under action 14 allows you to have a notification on consultation process in case you do not accept a map request, whereas under this provision the standard would be that you have to consult and it would be helpful if you have that optionality in place too. On the arbitration, of course the Netherlands and that's a really well-known statement, we are very much in favor of arbitration, although in practice we have very little experience in actually the need for having arbitration. But we would like to echo the comment by Germany on the drafting of the initiation of the arbitration process. And what we notice is that it's now relating in paragraph, I think it's nine still, on unresolved issues and part of unresolved issues. What we generally see is that it's only applicable for unresolved issues and all unresolved issues should be resolved via arbitration. So it's for us a bit difficult to understand why you can only pick a part of an unresolved issue in an arbitration and then move further in MAP after the arbitration process. We would prefer to just have all the unresolved issues done in arbitration and be resolved as such. And the last point we would like to make is on the level of detail in the provision. We notice it's more detailed than the general provision now, for example, in Article 25.5 of the UN model. And these additions are to be welcomed, But at the same time, a lot of details have not yet been filled in, which you need in practice to actually be able to conduct an arbitration process. So the question to the co-leads would be, would there also be a kind of standard CA agreement you could use to further fill in the details as some of these paragraphs also list as procedural aspects, type of arbitration process, et cetera? Thank you very much.


INC · Co-Lead · Khalid [2:02:04]:

Thank you, Netherlands. We continue with South Africa, please.


South Africa [2:02:13]:

Thank you, Chair, and thank you so much for giving us the floor. We would like to register our comments from South Africa. Firstly, we would like to take note of the statement that was made by Ghana on behalf of the Africa group, and we're saying we do support it. We just wanted to add to these comments. on a basis that tomorrow we might not be available to attend this meeting. So just a couple of issues. If we start with Article 3 on map, I think on the issue of timelines, I think on paragraph 11, I think the timeline we need to extend it. I think that three months access and the justification is quite small, including that 24 months for the resolution. And then there is also just a clarity seeking question, whether the suspension of collection remains governed by the domestic law. I think it's implicit in the wording, but it's not coming out clearly. And then on the mediation and conciliation article, it's more of a question. I mean, if you read that paragraph seven, it's not clear if there is an extension of a map timeline there. So that's that. And then the last one on arbitration, we just like to state that we do not support arbitration. And then that's all from my side, Chair. Thank you.


INC · Co-Lead [2:03:57]:

Okay, thank you. South Africa. Okay, before we take Russia, just a housekeeping matter. If you are using prepared statements, we're asking that you send those to e-statements@un.org. This is in aid of facilitating the interpretations. Okay? So if you're using a prepared statement, please send it to e-statements, one word, at un.org. Okay. Russia.


Russian Federation [2:04:47]:

Thank you, co-chairs, for giving me the floor. I will comment on Article 3.1. two years or two months timeframe we think is too strict. We ought to maintain flexibility in the protocol and should not indicate a concrete timeframe under this procedure. In addition, this is due to the fact that in many states they have bilateral arrangements that stipulate other timeframes and they're not represented here. As for article 5.2, we have a separate comment on that that we will present later. I'd like to also comment on Article 3.2 and 3.3. For 3.2, in particular, the Russian Federation supports including mediation and conciliation in the menu of mechanisms for dispute resolution. We propose clearly distinguishing between these two mechanisms and ensuring that their use does not automatically suspend or undermine any mutually agreed procedures. We have some technical comments on 3.3. In the current phrasing, it states that non-resolved issues ought to be submitted to arbitration on the request of any competent authority. Submission to arbitration should not be understood as an agreement to any mandatory unilateral launch of this kind of proceeding. In our view, arbitration ought to be applied only in those cases when the parties have directly accepted this mechanism, for example, by selecting its application through special agreements or any other separate declaration. If you maintain the model of the general application of arbitration, then we could make reservation in Article 5.1 and 3.3 ought to have these reservations. As for paragraph 11 of 3.3, these are issues already resolved by tribunals, and that should be maintained. For separate categories, we might need to have separate agreed exceptions. This approach would allow us to maintain arbitration as a useful reserve mechanism for parties that agree to it, and it would not be made automatic for all parties to the protocol. Thank you.


INC · Co-Lead [2:07:20]:

Okay, thank you very much. Russian Federation, India, please.


India [2:07:30]:

Thank you, Madam Co-Lead. India would like to make the following observations with respect to the timelines prescribed for the mutual agreement procedure. Under paragraph six, it is provided that the competent authority may suspend its bilateral discussions where judicial proceedings concerning the same issue are pending and have not been stayed or suspended. The competent authority is also required to notify the other competent authority regarding the pending judicial proceedings and any stay of such proceedings. India understands the rationale for this provision. At the same time, judicial proceedings may be time consuming and difficult to predict, and this needs to be appropriately factored in while prescribing the overall timeframe for the conclusion of a MAP case. Further, we note that the draft contemplates a three month period for determining access to MAP, followed by another three month period for determining whether the taxpayer's objection is justified. With our experience, we find that these timelines in some of the cases may be ambitious, particularly considering the varying institutional capacities and domestic procedures of different jurisdictions. We are mindful that the draft envisages that MAP cases should be, as far as possible, be resolved within two years, and India also has similar provision in its domestic guidance. However, again, given the differing legal and administrative frameworks and capacities across jurisdictions, India would suggest providing a more flexible outer timeframe, possibly up to three years for the resolution of MAP cases, especially considering that we are proposing MAP to be one of the core dispute resolution mechanism. At the same time, where MAP proceedings are suspended because of pending judicial proceedings or a request for stay of such proceedings, the period during which the MAP proceedings remain suspended should be excluded from the computation of the overall timeframe prescribed for resolution of the MAP case. And this would provide the necessary flexibility to competent authorities while ensuring that delays attributable to judicial proceedings, which may be beyond the control of the competent authorities, do not adversely affect the prescribed timeframe for the resolution of MAP cases. I understand that my time limit is over. I would just take a small time of yours to point out that the provisions relating to mediation and conciliation as well as arbitration do not mention any kind of a threshold time limit where the competent authority upon mutual agreement can choose for any of the such procedures. So we would like to understand that would an option be available with the member states opting for such resolution mechanisms to begin with these procedures without exhausting the MAP process and completion of its time limit thereof. Thank you so much.


Speaker 49 [2:11:10]:

Play all songs of the drama company.


INC · Co-Lead · Khalid [2:11:41]:

So we take Zambia next and just a quick note, so when your mic starts flashing, you have still 30 seconds left. So your time, by then it has elapsed. So Zambia, please, followed by Ghana. So Zambia first, thank you.


Zambia [2:12:07]:

Thank you for the floor. Seeing as I'm taking the floor for the first time, let me begin by thanking the Chair, the co-leads and the Secretariat for the enormous work which has gone into presenting the draft under discussion before us. We acknowledge that it was no mean feat. Zambia would like to support the position advanced on behalf of the African group by the distinguished delegate from Ghana. We wish to state that indeed disputes are inevitable and we support MAP as a core mechanism to ensure that the resolution of disputes emanating from tax matters remain the preserve of competent authorities. In terms of arbitration, Zambia is not in favor of it in all its forms. And we note that an arbitral award is final and binding, and that the decision arrived at is made by persons who are not competent authorities, which raises for us the issue of sovereignty. We shall in due course, Chair, be submitting our written submissions, but for now, we beg to submit. Thank you.


INC · Co-Lead · Khalid [2:13:20]:

We thank you, Sambir. And with that, I give the floor to you, China.


China [2:13:26]:

Thank you, Curtis. We've got some comment upon paragraph four of 3.1, which is by the phrase of constitutional limitation.

We are wondering if this phrase, constitutional limitation, only means the limitations on the basis of the constitution of.

A certain state party.

If so, our proposal is to replace it by the phrase of limitation on the basis of domestic laws. And that's our comment.

Thank you.


INC · Co-Lead · Khalid [2:14:07]:

Thank you, China. Singapore, please.


Singapore [2:14:13]:

Thank you, colleagues.

Just two quick points for me.

On MAP, paragraph three, just a small suggestion to replace shall Before making such a determination, that competent authority shall, we propose to replace it with may consult the other competent authority. We thought that requiring consultation in all cases may not be necessary and could unnecessarily slow the MAP process because eventually after all, the two competent authorities will come together later. So may will keep the process flexible and allow consultations where it is necessary. Moving on to arbitration, I think we had a similar point with Germany that a dispute resolution mechanisms are ultimately initiated by the taxpayers. So it's not so clear that the taxpayer should be out of the process when arbitration is decided to move on.

So we think it would be more appropriate for taxpayers to trigger the arbitration or agree to trigger that arbitration.

And if the.

Protocol permits the CAs to trigger the arbitration, the taxpayers should be consulted and their consent obtained before it proceeds.

Thank you.


INC · Co-Lead · Khalid [2:15:32]:

Thank you. Singapore, Switzerland, please.


Switzerland [2:15:36]:

Thank you, Mr. Chair, or Mr. Khalid. I have two, three comments. To come back on what the Netherlands brought up on the possibility of maybe having a competent authority agreement, like for arbitration is one, maybe not for maps, but I guess it depends on the level of detail. So you have the one choice of being very, let's say, shorter in our in our provisions and then give the possibility of a competent authority agreement, which is quite extensive and that's kind of the solution you have in double tax treaties. Or you have the solution of the MLI, which basically the whole procedure is spelled out in the MLI, which means that you have Article 24 of your tax treaty that is four pages long, kind of disproportionate compared to the rest of the treaty. And I understand here that we want to have some sort of unification and can't like just refer to competent authority agreements. But big advantage of competent authority agreements is that two partners can customize the procedure with their practice, with what they desire. And I don't think it really matters if there's slightly different time limits between two countries if they agree on this. So maybe one option for this is like for arbitration, to have one article noting what paragraphs can be amended if both competent authorities agree to amend them. So like the default procedure would be what we have in the treaty here and then certain aspects It's kind of going back to what's core and what's not core. So core things could have to stay the same, but everything procedural that could be fine-tuned between two countries and a competent authority agreement, we could list out all the paragraphs that can be amended with a competent authority agreement. So those who want to make one can do it, and those who don't want to make one and just stay with the default rules can also do it. Another, and I was just trying also for MAPs trying to imagine now where are we, who's gonna use these, this procedure? If you list out the different situations, you have people have a tax treaty with a MAP agreement, they won't need it. If you have a tax treaty without MAP, then you might come here, and then you have the situation of no tax treaty, and are those people gonna use this, but it's difficult to see how you're gonna do a MAP if you don't have substantial provisions to arbiter the procedure. Another point, I agree also that it should be a taxpayer that should trigger arbitration. It's a good example of where there's a slight deviation from what actually exists and it seems to me we would complicate things if in our procedure here for arbitration, the taxpayer wasn't involved in triggering arbitration. And my last point, is that we always think of, okay, do you sign up to arbitration here and then you're stuck in arbitration and some countries don't want that, or do you not sign up and you never use arbitration? Maybe there's a middle ground, maybe there's the possibility to prepare arbitration here and have it on a shelf and for countries to decide, okay, for this case, there's certain cases who might agree on arbitration on a case-by-case basis. And if at that point we agree, maybe it's a tax treaty with arbitration, but if at one point they think, okay, this is a very difficult question or very gray question, let's have it decided by arbiter, they can choose for that case to come here in our tax treaty and use this procedure and this provision. It's kind of like a middle ground between people who are pro or against arbitration.


INC · Co-Lead · Khalid [2:19:58]:

Thank you, Switzerland. We continue with Nigeria. Nigeria, please.


Nigeria [2:20:07]:

Thank you, colleague, and greetings to everyone. I wish to make this submission on behalf of Nigeria. The African group has spoken through Ghana. And we support that position of the 54 member state that constitute the African group. On MAP, we want to say that we support it as one of the core dispute resolution mechanism. We know that MAP is a widely accepted government to government mechanism as already explained by our colleagues. On the dispute proceedings, we observed that the provisional map should not require suspension of domestic proceedings based on the provisions that we have read. However, for most jurisdictions like Nigeria, where competent authority are not able to deviate from court judgment, which is also contained in the write-up. So the practice on the map is that taxpayer should suspend domestic legal proceedings while the case is on the map. That's what we advise in Nigeria. It's therefore our view that this provision should not be included in the protocol itself, rather it should be left to domestic practices of participating jurisdictions. You know, guidelines may be provided in that respect. Regarding implementation notwithstanding domestic time limit, where there is a constitutional limitation, uh, assisting that assist in the cause of the map party should notify the other parties early. You know, this will say about the efficiency and respect, caution, constraints, and also the resources that may have been expended or that will be expended in the course of the map process. We observed that, um, the, what the, um, statement or the article provided was you should notify the other within a reasonable timeline. I think that may be subjective and would lead to misinterpretation by various participants. On the timelines for the completion of MAP, I know we had discussed, we had made a few known in the morning session and many other delegates have also expressed that the 24 month period is low. is too inadequate for most jurisdiction, especially the lowest capacity jurisdiction, if you compare, if you consider the complexity of issues that might be involved. Arbitration, we have reiterated it over and over, and the African group have also said it that for us, we are not in support of arbitration. It infringes on our constitutional rights, and we cannot support it in any form. We, however, look at the test that has been written, we observe our suggestion will be that arbitration should only commence when all the parties involved have agreed to it. Because based on what we read, one party can trigger arbitration and that means that you are forcing it on other member states that are involved. Arbitration should only be available when everyone has opted in, every member that is concerned has opted in. We also advise that the UN roster of arbitration should support transparency and diversity in the maintenance of the roster to ensure that all the regions are actually well represented or adequately represented. On the independent opinion arbitration, we have a concern too, even though we don't support the arbitration, we see that as transpiring state dispute into authority that away from committee authority of member states and that we caution against it. We have concern regarding the drafting of the paragraph nine on the arbitration and I know that distinguished delegate from the Kingdom of Netherlands raised that issue. Because when the issue is not resolved, we say we go back to MAP again. We wonder what then is the use or the importance or the need for arbitration in that respect. On the fee, my colleague from Ghana has made known the position of the African group regarding fee remuneration and expenses. I do not want to waste the time of the committee on that again. comment, we'll be glad to submit it at the appropriate time. Thank you.


INC · Co-Lead · Khalid [2:25:01]:

Thank you, Nigeria. Japan, please.


Japan [2:25:11]:

Thank you, colleague. Uh, so re- regarding MAP, we believe it is not necessary to prescribe procedure in such detail in the protocol itself, uh, we would rather develop separate guidance that provides protocol details on the operation of the procedure. In particular, with respect to paragraph six concerning the interaction with domestic court, as practices differ across jurisdictions, we do not believe that this issue should be addressed in the protocol. Regarding timelines, we also prefer a non-binding approach such as guidance rather than protocol text. Turning to arbitration, we believe that it is beneficial for the timely and effective resolution of disputes. We also understand that a number of jurisdictions face constitutional or legal constraints with respect to arbitration. But the existence of an arbitration mechanism itself can serve as a strong incentive for competent authorities to resolve cases at an earlier stage. We therefore believe it is important to include an arbitration provision in the protocol. I also thought Switzerland's suggestion was interesting and would like to consider further. And finally, on technical assistance and capacity building, as we noted earlier, Cooperation with other organizations is essential from both a resource and efficiency perspective. The UN should not be expected to undertake these activities by its own. We would therefore propose adding the words with relevant international and regional organizations as in Article 2.10 to emphasize the importance of coordination and collaboration with other providers of assistance. Thank you.


INC · Co-Lead · Khalid [2:27:15]:

Thank you, Japan. Senegal, please. The floor is yours.


Senegal [2:27:24]:

Thank you, co-chair. Senegal aligns itself with the comments of the African group. and would like to make a number of comments in its national capacity with regard to the M.A. piece in paragraph eight where it says that the agreement ought to be implemented regardless of the time frame stipulated by domestic law. Senegal would like, however, for there to be some flexibility at this level, especially because our domestic timeframe would not allow us to proceed to the implementation of an agreement like this beyond certain time limits. And that is in light of the various international instruments that we've adopted. As for the time frames for submission of the request for MAP, I think that we have to use a practical approach. I think that the statistics that are regularly published are a valuable source of information that we could base ourselves on, because we must keep in mind that in African countries, time frames may exceed 36 months, essentially the three years that were proposed in this document. So we should take into account that reality. Because we have tried to set a common standard, but it has to be implemented by countries with very different realities. When it comes to dispute settlement in African countries, the teams for MEPs are very small compared to developed countries. I'm sure you're aware as well that in the African context, few countries have provisions for these mutual agreements. Most of the legal frameworks don't have that fully provided for. So I think that's an indicator that we have to think about. And this ought to draw more of our attention. And this ought to be reflected in changes to indicators C4 and C5. As for arbitration, we are fully in line with the concerns of the African group. We think that if you look at many of our African countries, many of us use the UN model. and the UN model uses option A where there is no arbitration. It's only in option B where there is this arbitration option that is recommended. So that is an element beyond the constitutional constraints as well as the costs or even the fact that when you look at the reality of African countries, it's not easy to deal with these issues. This proposal applies for arbitration as well as for all investment projects. Thank you.


INC · Co-Lead · Khalid [2:30:50]:

Thank you, Senegal. The floor goes to Kenya now.


Kenya [2:30:55]:

Thank you, colleagues, members. To start with, I'll mention that we align ourselves with the sentiment made by the African group by the delegate from Ghana on behalf of the African group and in particular we want to mention about the arbitration. Kenya does not support any form of arbitration on this matter as the decision making will be moved from the.

Authority that is bestowed to our to authority, to a tax authority to make decisions for taxes and tax purposes.

Thus, we feel that it will undermine our tax sovereignty. In terms of when we look at the issues of.

Timing, again, we align in the sense that we prefer it to be left to domestic legislation.

Since, as I mentioned earlier, there could be issues of complexities when dealing with matters of how we the transfer pricing matters that have quite complex and issues of capacity within the two parties to be able to settle on a fair footing so we believe that we should have enough time to have a look at the matters before we commit for maps so yeah terms of timelines we refer to uh domestic registration thank you chair.


INC · Co-Lead · Khalid [2:32:20]:

Uh thank you Kenya We move on to Morocco.


Morocco [2:32:28]:

Thank you very much, Khalid. Very quickly, I just want to say that we align with the statement made by Ghana on behalf of the African group and underline that Morocco does not support arbitration under any form.


INC · Co-Lead · Khalid [2:32:42]:

Thank you. We give the floor now to the United Arab Emirates.


United Arab Emirates [2:33:03]:

Thank you, Co-Lead. Just on Article 3.1 on MAP, we'd like to just reiterate our support that we believe MAP is the most effective cornerstone for dispute resolution. In terms of our further comments, we'd like to align with the comments made by the Netherlands. So with respect to paragraph one, we have many treaties that refer to the fact that taxpayers can file in either party state. And we think given the purpose of what we're doing here today is to make dispute prevention and dispute resolution as effective as it can be, widening that access goes some way to achieving that objective. With regards to paragraphs two and three, as was mentioned earlier, we typically find that both of those aspects, the procedural and determining whether the objection is justified, is typically done before map access is granted. Now, it could be deemed just semantics, but I think in the future, should there be any sort of peer review process or monitoring, I think that's an important part to distinguish whether we want to keep it separate. I understand why, given the timelines have been outlined, three months and three months, but maybe something to consider. Paragraph four, just a quick clarification, it talks about the constitutional limitations where a competent authority becomes aware. We just wanted to understand what was being envisioned, how that would be outside of your procedural check that you do under paragraph two. Thank you.


INC · Co-Lead · Khalid [2:34:47]:

Thank you, UAE. We have now Ghana the second time. Thank you, Ghana.


Ghana [2:34:54]:

All right, thank you, Chair. This is now speaking on behalf of Ghana. Ghana aligns itself with the statements made for and on behalf of the Africa Group and similarly supported by other African member states and other member states here in. Chair, with respect to MAP Ghana, strongly also support that MAP remains as the core mechanism for dispute resolution. And with respect to Article 3, paragraph 1, similar to the same comment made by colleague from Netherlands, we would rather prefer that the matter is referred to either of the contracting states or the state parties, not limiting to only just the resident states of the party to bring more flexibility in there. With respect to timelines as to completion of the map case, Ghana As I indicated through the Africa group again, what we think is that this provision must not be tied to legal rigidity, but allow flexibility that the map will be concluded within the time space as may be provided for in the domestic law. The particular reason being that when you read paragraph eight, paragraph eight has an open-ended application of the agreement which talks about no time limitation for implementing MAP result. And so if you put in a time test here, then technically paragraph eight becomes redundant. We are trying to, so it's for a good reason why paragraph eight is drafted in that sense. So member states, of course, depend on the complexities, can spend some time to finish the case properly for the betterment of member states. And my last comment will be on the issue of domestic or constitutional limitations. And I think as really mentioned by my colleague from Netherlands and other member states, usually this protocol will be subject to the domestic process of legal before it becomes force of law, for example, in Ghana. And so and we are already applying map process. I mean, we have gone through all our DTAs that we have map procedures going through the parliament. So there was no need for any, there will not be any limitations. So we don't see why we have this kind of provision in here. Maybe possibly we recommend that we take it out from this provision and then let it be. I so submit, Chair. Thank you.


INC · Co-Lead [2:37:58]:

Okay, before we bring in our civil society colleagues, just a comment on the fully understood concern regarding arbitration. I think perhaps I should say that we can, you can rest assured that arbitration would not be on the list of a core mechanism. We have heard you loud and clear on that. However, it is an option that is given in the protocol because there are countries who have had a good experience with arbitration. They find it to be a suitable process to resolve tax disputes. and so in the interest of inclusivity, the arbitration is one of the options that is given under the protocol. And this would be in keeping as well with the UN model that was referred to earlier. Article 25 does have an alternative A, which is the one without arbitration, and an alternative B, which includes arbitration. So I know the issue will come up again, but those are all comments for the time being. And of course, we will consider your written comments and we will also have the discussions in the intercessional debates.


INC · Co-Lead · Khalid [2:39:42]:

Yeah, from my side, This afternoon we have received many, many questions, a large number of it, and that was to be expected. We cannot take all of them, probably not even many of them. Lucky us, we have the intercessional period in which we will be able to answer some of your questions in greater detail. It is just a random selection, but what I would like to remark is that it is Because there were many questions, many comments concerning Article 3.1, the map provision. And it is true, and it was discussed previously by the INC that we took as a blueprint Article 25 of the UN model, which by the way comes in two alternatives, one of which contains the arbitration option. And that also explains already one of the questions that were asked as to why currently the outcome does not need to be accepted by the taxpayer, but the outcome of the arbitration needs to be accepted that this-- well, it is normally you would derive it from the commentary, so it might be something that needs to be added in our text. So many of the text in the text, in the current Article 3.1, it is also drawn from the commentaries on Article 25. We have also taken into consideration the development surrounding MEMAP. And my impression from the discussion this afternoon is that Although everyone is aware that we are building upon something that is already there, Article 25, some want to deviate from the standard procedure, for instance, regarding implementation regardless of domestic timelines. Others strictly insist on a greater consistency with the existing procedure. So it is difficult for us to satisfy everyone. Then there was the question on where this provision comes from concerning the constitutional limitations. This is something that was brought up by developing countries speaking on behalf of a larger number of developing countries. The same country is, of course, invited to share in greater detail with the audience here where the benefits of that provision lies. In general, we have heard many questions and comments concerning the timelines, whether they are appropriate, whether they are flexible enough, how they are computed. Indeed, those are questions that needs to be answered by us as a membership and then Here too, similar to the previous discussion on the other articles, we have heard that some parts of the provision could rather be outsourced, would be better to have them customized and, for example, competent authority agreements. I think in that regard, we have to be mindful of the potential pros and cons of such an approach. One benefit, as was said as part of the introduction of this protocol, is that it allows, or it provides for a certain standard that can be then applied, in particular, can be good applied in multilateral circumstances, a multilateral situation, multilateral dispute prevention or resolution scenarios. And it would probably be detrimental to that objective to have individual parties agree in a bilateral fashion on competent authority agreements. That could also, what I just said, I think could also be used as an answer to the question that was raised, why someone should even refer to Article 3.1 instead of the Article 25 that you already have in your bilateral agreement. It's true that your current Article 25 might work, and apart from the fact that not necessarily all existing agreements contain an Article 25 or that they might differ in certain aspects. They probably do not provide the level of standardization that we want to achieve here. Some could also argue that the current provision here might be more beneficial to a group of countries like developing countries, for instance. And in general, I would like to remind you of the approach that the INC wanted to take is not just to be satisfied with what is already out there, not to replicate what is already there, but wherever possible, try to improve the provisions in order to provide for a better and a more universal dispute settlement and dispute resolution toolbox. So as I said, there are many, many more, many more questions, but we have to be mindful of the time. So we have half an hour left and we have a number of stakeholders asking for the floor. We have Switzerland asking for the floor again. And as I was instructed by the chair, we have to take Switzerland first. followed then by the stakeholders. So therefore, we go and give the floor to Switzerland again, followed then by the stakeholders. Thank you.


Switzerland [2:46:04]:

Thank you, Mr. Khalid. I'll be very brief. I just want to react to maybe on the conclusion of our discussion regarding arbitration and options. It seems to me that we don't need to put options if it's provisions that aren't core mechanisms. We can have, we only need the options if it's a core mechanism. For everything that's not a core mechanism, then it's de facto optional and when one country indicates what exactly he's taking out of the optional provisions in that process, we'll know if he has or not arbitration. So it doesn't seem to me we need to put specific options and arbitration in the tax treaty.


INC · Co-Lead · Khalid [2:46:59]:

Sorry, Switzerland, at least we in the front, we didn't understand.


Switzerland [2:47:07]:

Just simply, we talked about alternative A and alternative B regarding arbitration, and I -- for like for the people who'd want it or not want it, and it seems to me we don't need to do that. We can have an arbitration provision in the protocol and then when we do our article, whenever it is, 21 with reservations, everybody who doesn't want to do arbitration will do a reservation on arbitration.


INC · Co-Lead [2:47:35]:

Just to clarify, Switzerland, the alternatives that we spoke about, A and B, are in the UN model tax convention. We don't have an alternative A and B in the protocol.


INC · Co-Lead · Khalid [2:47:55]:

Mike to Switzerland, please.


Switzerland [2:47:56]:

Thank you. Yeah, sorry. Maybe since I didn't have a coffee break, maybe I misunderstood. So sorry about that. I had understood there were some alternatives in this framework convention. I'm sorry.


INC · Co-Lead · Khalid [2:48:15]:

Well, no one had a coffee break, Switzerland. Well, and the reservation, yeah, that is, so the provision in Article 5.1, that is how the concept of optionality is supposed to be operationalized by virtue of those reservations. So it is like when, like, take for example arbitration. Arbitration is currently Article 3.3, and then imagine that currently where we have like the square brackets or the articles in square brackets, Imagine that Article 3.3 would be one of those currently square bracketed articles. It would mean that signatories to the protocol could lodge a reservation according to which they do not want to apply arbitration. So that way they would apply their opt out. big use of their optionality. And then speaking about the optionality, as we have seen in the many mechanisms, there's another layer of optionality like when you're in principle, when a country in principle has implemented, is applying a mechanism, there's always on a case by case basis, most of the mechanisms, the possibility for the competent authority to make a determination whether it engages in a specific case or not. Very good. We move on to the stakeholders and we start with DMUN Foundation.


DMUN [2:49:52]:

Thank you for the floor. I am honored to take the floor in my individual capacity as a member of the DMUN Foundation in the financing for development children and youth constituency of the major group for children and youth. Mr. Co-Lead, Chair, colleagues, children and youth recognize arbitration as a possible means for resolving issues that remain outstanding after sustained efforts under the mutual agreement procedure. Given its binding character, however, the mechanism should include clear safeguards regarding state consent, domestic legal limitations, impartiality, cost, and administrative capacity. First, please allow me to provide our comments on paragraph one. The paragraph permits arbitration at the request of any one competent authority. We invite clarification on whether participation in arbitration is intended to require the prior consent of each party, either through ratification of this protocol, an express reservation, or an agreement in the particular case. To preserve certainty, the article should clearly define the basis on which a party accepts binding arbitration and any permitted exclusions. In addition, the three-year period should begin only when the competent authorities have received the information reasonably necessary to consider the case. Delays attributable to the affected person, suspension of the MAP, or an agreed mediation or conciliation process should be addressed expressly. The authorities should notify the person of the date on which the arbitration period begins. Furthermore, the exclusion in paragraph one applies where a court or tribunal has already rendered a decision. We suggest aligning this language in Article 3.1 by referring to a final and unappealable decision from which the competent authority is legally unable to deviate. This would avoid unnecessarily preventing arbitration where domestic proceedings remain pending or further review is available. Second, pertaining to paragraph three, the paragraph should mandate procedural arrangements to the recorded in writing. These should address the issue submitted, applicable law, timeable working language, confidentiality, treatment of evidence, conflicts of interest, cost, and termination. Failure to agree should not prevent arbitration, but the default rules adopted by the meetings of parties should be sufficiently complete and accessible. Fourth, roster under paragraph four should reflect equitable geographical representation, different legal systems, and balance expertise from developed and developing nations. Arbitrators should be independent and impartial and should disclose any actual or potential conflict of interest. No arbitrator should have participated previously in the audit, assessment, MAP, mediation, or conciliation concerning the same case. The article must also address cost allocation and technical support. Arbitration should not impose or just impose a disproportionate burden on a party with limited resource. We suggest requiring transparent cost rules and providing appropriate assistance, including secure facilities, translation and technical support where needed to ensure effective and equal participation. Paragraph five should establish clearer criteria for selecting between final offer arbitration and independent opinion arbitration. Independent opinion decisions should be based exclusively on the applicable tax instrument, the facts established in the case, and the submissions to the competent authorities. The panel should not modify the applicable instrument or create new taxing rights. Finally, paragraph should clarify the grounds, if any, on which an arbitration decision may be treated as invalid, including a material conflict of interest, serious procedural irregularity, or fraud. The relationship between binding implementation, constitutional limitations, and final domestic judgments should also be addressed consistently with Article 3.1. Acceptance by the affected person should be informed and should specify the effect on available domestic remedies. These revisions would prepare arbitration as possible last resort mechanism while ensuring that it operates on a clear basis of consent, respect for domestic legal system and enables equitable participation by all parties regardless of administrative capacity. We thank you.


INC · Co-Lead · Khalid [2:54:02]:

Thank you very much. We would appreciate if you try to stay within the three minutes limit. We continue with Latindot.


LATINDADD · Luis Moreno [2:54:18]:

Thanks, Mr. Collett, uh, I will speak in Spanish, eh, Luis Moreno.

Luis Moreno from the Latin American group, a member of the Alliance group. We have closely followed the discussion of this protocol and would like to make a brief comment on chapter three and specifically on article Roman III-3 which concerns arbitration. First we wish to reaffirm that the priority of the framework convention should be primarily the prevention of tax disputes, not only their resolution. Most current disputes arise because we operate within an exclusionary international tax governance architecture built on the arm's length principle, the transfer pricing system and bilateral treaties that protect and benefit multinational corporations and the wealthiest countries rather than the tax rights of states in the global south. Although we recognize that this is not investor state arbitration, but rather binding state to state arbitration, we believe that both share fundamental flaws and risks. Lengthy and expensive proceedings, a lack of transparency and impartiality, arbitrators who may represent private investors today and states tomorrow, and multi-million dollar sentences that ultimately force countries with few resources to capitulate. In this sense, arbitration has not been a mechanism for conciliation and resolution, but rather an instrument of exclusion that favours better endowed party in the dispute. Therefore, we propose that arbitration in any of its forms, whether mandatory or optional, be excluded from Protocol 2, and we request that any dispute resolution mechanism be based exclusively on the mutual, ongoing and irrevocable consent of the States parties, thereby strengthening multilateralism as a guiding principle. A dispute resolution mechanism will only be legitimate if it is grounded in a common legal basis, the fair allocation of taxing rights. To fully achieve this, we urge the inclusion of rules that prevent disputes before they arise, such as unitary taxation with a fractional formula and tax transparency through public country-by-country reporting. amongst others, thereby replacing the current international tax system, which is opaque, asymmetrical and erodes the resources of the global south. Thank you.


INC · Co-Lead · Khalid [2:56:47]:

Thank you, Lathan Dutt. Next is Asian People's Movement on Debt and Development.


APMDD · Aida Jean Manipon [2:56:54]:

Good afternoon. Thank you. I'm Aida Jean Manipon and speaking on behalf of APMDD and the Tax and Fiscal Justice Asia. and the broad civil society network coordinated by the Global Alliance for Tax Justice. Co-leads, our intervention will be brief. Last week, discussing the article on funding, some member states argued against mandatory financial commitments for the convention. Now, in this protocol, those same states are negotiating text with clear implications for subsidiary bodies and a dedicated UN role in implementation. This protocol is resource intensive for member states and for the UN alike. Civil society's position is clear. The Convention needs a financial mechanism to govern the implementation of the Convention, its secretariat, core mechanisms and its protocols. We cannot accept a framework convention with no guaranteed funding, which allows member states to cherry pick with which protocols to fund voluntarily. that starves the Convention's core resources and turns it into a channel for States to fund only what serves their own priorities. We are also concerned about the task force still working on transfer pricing databases. Task forces must be established with a clear mandate, agreed by the negotiating parties, not created ad hoc and supported by the member states. We recall that there were concerns expressed during the fourth session about diverting scarce resources toward principles never actually negotiated under this framework. Currently, there are four member states with formal roles under Protocol 2 and none under Protocol 1. Thank you for this time.


INC · Co-Lead · Khalid [2:59:12]:

Thank you very much. We continue with the African Tax Administration Forum.


ATAF [2:59:24]:

Thank you very much, colleague, for the opportunity. Our intervention will be very brief. Just three points. One on MAP, as we mentioned in our earlier intervention, we strongly recommend it remains a core mechanism. as it has been intervened by the African group, by Ghana, and of course other member states that have supported that view. As an additional consideration, it is important to introduce a language similar to what the UN Model Tax Convention 2025 has in terms of addressing disputes that are tax related. and they arise in the investor state sort of agreements. So already there is very useful guidance in that model and should be included here so that it's made very clear that in case of such kind of tax related disputes and they arise in those situations, the body or the mechanism for resolving those disputes, it's only through a MAP procedure. Second on arbitration, we've made this point consistently. We just want to briefly remind ourselves that we also, ETAF, don't support arbitration to be part of the mechanism for resolution of disputes. And the last point is on the UN supporting this section. Just two points on that. It is clear that there is need for the UN to support the implementation of this mechanism. Our addition to the current text is to ensure that the support the UN will provide should be done in collaboration with other regional and international organizations that are already providing similar support. Lastly, on the roster of mediators and conciliators that will be used in these processes, It's very important that those, that roster takes into account regional representation. Thank you.


INC · Co-Lead · Khalid [3:01:53]:

Thank you very much, Atif. We continue with ICC Italia.


ICC [3:02:01]:

Thank you, colleague. Um, ICC welcomes the sup- broad support expressed by many delegations for the mutual agreement procedure, from a taxpayer perspective, effective dispute resolution mechanism are essential to provide certainty, prevent double taxation and support cross-border trade and investment. While we recognize the need for flexibility in complex cases, procedures should be designed to promote timely and effective outcomes and avoid disputes remaining unresolved for prolonged periods. ICC also supports the inclusion of arbitration as an important mechanism of last resort when competent authorities are unable to reach agreement through MAP. Access to arbitration can help ensure that disputes do not remain unresolved indefinitely, providing taxpayers with greater certainty and reinforcing confidence in the overall dispute resolution framework. The availability of arbitration can also encourage the timely resolution of cases during the MAP process itself. As indicated by other delegations, we further agree that mediation and conciliation mechanisms should facilitate rather than delay the resolution of disputes. Any additional procedure should complement existing processes and contribute to reaching practical solutions without extending the overall timeframe for resolving cases. In line with ICC's longstanding position, Taxpayers should also have an appropriate role in dispute resolution procedures. Given that taxpayers bear the economic consequences of unresolved disputes, they should be able to request initiation of arbitration where applicable and be appropriately consulted throughout the process. Finally, while tax issues may at times intersect with broader investment or trade considerations, These matters are best considered within the appropriate foray and with the involvement of experts in those respective fields. Maintaining a clear and coherent framework focused on tax matters is essential to promote consistency, legal certainty and predictability. while avoiding overlapping jurisdictions and potentially conflicting outcomes for taxpayers and tax administrations. Thank you.


INC · Co-Lead · Khalid [3:04:42]:

Thank you very much. We had another stakeholder asking for the floor, but I don't see that stakeholder anymore in my list here, just to ensure that is it -- did you lower your hand intentionally? Or in other words, has everyone spoken who wanted to speak? It seems so.


INC · Co-Lead [3:05:03]:

The chair isn't here, and so you still have 10 minutes. Oh, Jan isn't here from Switzerland. I was going to say he could still have his coffee break. But we will see you here tomorrow at 10:00 AM, and at that point we hope that we'll be able to finish with protocol two, and we thank you so much for your engagement today, a lot for us to think about, and look forward to continuing the discussion tomorrow. And so with that, we are done.