Intergovernmental Negotiating Committee on the United Nations Framework Convention on International Tax Cooperation - Second Substantive Session 2025, 6th meeting

Good afternoon. Welcome back, everyone. Now we are going to continue our discussions for work stream two, protocol one. I'm giving the floor back to Lisa. We're going to continue and resume the floor for multi-stakeholders who was there in the loop before we go to the lunch break. Lisa, please go ahead.

Thank you, Chair. We had actually a member country, but it just disappeared. So we'll start off with and invite the stakeholders to make their comments. And I first have stakeholder 10, Bombay Chartered Accountants Society. Sorry, we Just Senegal -- could you wait Senegal until after the first stakeholder, if you don't mind, because I've called on them. So please go ahead, Bombay Chartered Accountants Society.

Thank you, Chair, for the opportunity. I have a few comments. First one is on -- you know, there's a lot of discussion on auto operating or the word which is used here is self executing. I mean, of course this term has a meaning which is well explained, but the way I would want to understand or maybe the most relevant in this context could be something like a BEPS MLI wherein once a country signs or offers a particular tax treaty in the future, whenever the counterparty agrees to it, the treaty becomes operational. So in the OECD legal note, they call it as an open offer. And maybe that feature of the arrangement may be kind of not treated as a part of self-operating protocol. There's a question on fast track process. Obviously, it has to be fast track process. We already spent a lot of time, OECD started BEPS 1.0 in 2012, There's no outcome till 2025. And if we still make it bilateral, one-on-one, probably it may take 10, 15 more years. All of us may have retired by that time, except for the young people sitting behind. The question of rates, that can be included or addressed in a particular manner, can we think of a situation or a structure of protocol wherein we adopt minimum standards. Minimum standard could be, let's say, a rate of 5% or 10%. So everyone who signs the protocol would agree to it. Or minimum standard could be net basis as well, whichever way the countries may want to do, so either of these two. And then with a commitment to further improve on it, if the counterparty agrees. So if we look at the BEPS MLI, Some countries, especially India, has said that we want PPT. But if we get a relevant party who is interested in detailed LOB, in the future we want detailed LOB. So if we adopt this method of adoption of rates in the protocols, maybe everyone who signs has some skin in the game. And at the same time, the source country has the ability to further negotiate it and improve the rates if they want. Thank you.

Thank you very much, Raval. I have Senegal. Please go ahead.

Thank you, Madam Chair. I have taken the floor because at the point when you concluded your last statement, you stressed that the goal of the protocol was to correct the imbalances in the allocation of taxing rights and those that relate to existing treaties and issues raised by developing countries. From that point of view, if we look at the protocol as optional, which is the case today, when that provide services decide to not accede to the protocol because they're already in a comfortable situation in light of the tax treaties that they've signed, would our goal be achieved then in such a case? In our view, that is not the case. So then how do we continue discussing this protocol? I think we need to keep thinking about this further. If we continue from this perspective of the protocol being optional, if countries providing services decide to not sign this protocol, would there be any alternatives that would allow us to address the imbalances that we have raised? And Are our current deliberations working towards such possible alternatives? That's what I wanted to raise, this issue of any possible alternatives. Thank you.

Thank you, Senegal. I think I might take the opportunity, because over lunch we had some conversation, and I think We have stressed that one of the issues that have been raised in the issues note and during the discussions is that many countries have, but not everyone, the right in domestic law to charge withholding taxes on non-residents who provide services in their country. Not everyone has that right. The fact is that There are countries that don't have double tax relations, and we've focused a little bit the discussion on the problems that many developing countries raised in their workstream meetings, that the main problem, as they saw it, was the tax treaties they had entered into and the difficulties of renegotiating them and the difficulties of denouncing them. But, and we mustn't forget that this is not only about this. I just wanted to stress that taking the opportunity with Senegal has just raised some of the issues that are really related to that. I think we still have to have remember that the scoping is more than what we are perhaps thinking of, perhaps what I have said, that we should be aware that the scope is big. and we must look into these different possibilities that Senegal has just raised. Thank you for that comment, Senegal. I will carry on with the stakeholder list. Now I have NGO 4, which is Oxfam. Please go ahead.

Thank you, Madam Chair. The discussions held yesterday confirmed the view that both developed and developing countries are severely restricted when designing and implementing taxes on the income from cross-border services, particularly digital services. A main reason for such limitations is exactly the widespread use of double taxation agreements between countries, as highlighted by the issues note. While the traditional narrative from wealthy countries and international organizations has consistently promoted double taxation agreements, as the key to unlock foreign direct investment, provide legal certainty to investors, generate economic activity and additional revenue for developing countries, the concrete impact of such agreements is much more controversial. Analysis from academia, civil society organizations and developing countries have repeatedly concluded that double taxation agreements are instrumental to profit shifting by creating loopholes and tax avoidance opportunities for multinational corporations. severely limiting or fully preventing some forms of taxation and reducing effective tax rates. The main stated purposes of these agreements is avoiding double taxation. However, methods to avoid double taxation are not limited to such agreements. There are other approaches that are commonly utilized. As recognized by delegates during yesterday's sessions, many of these agreements were actually entered into by countries in the past decades without a full understanding of their practical effects on the limitation of domestic taxation rights. The fact that some agreements were signed during colonial times and continue to be in effect long after independence also reflects the need to rethink the role of such agreements moving forward. A bias towards residence taxation of services and outdated concepts of permanent establishments were disseminated through these instruments, creating the very issues we are currently trying to fix. Just as many countries, both developed and developing, are questioning the impact of bilateral investment treaties and the limitations that investor state dispute settlement mechanisms have on progressive policies, This framework convention on international tax cooperation provides a unique opportunity to reevaluate the role and practical impacts that double taxation agreements have over developing countries. Finally, on the question of having a similar structure to the MLI, civil society organizations do not consider that a positive approach, as it would surely lead to a high degree of complexity. Thank you very much.

Thank you very much. I have Atav. Please go ahead.

Thank you, Madam Chair, for giving Atav the floor. We appreciate members' contribution to this discussion. And we want to quickly respond to a few points. Number one point is the point which was first raised by Cameroon and has been repeated by Senegal. And it relates to how the obligation raised on parties could be discharged. Obligation raised on parties via the framework convention could be discharged using the protocol since the protocols are optional. Uh, we want to believe chair that the best way to go. is to ensure that the obligation raised in the framework is such that parties or members could meet up with using variety of choices and tools, which we include, of course, the protocol, but we not exclude other optionalities like bilateral arrangement and other measures which they may choose to use to discharge such obligation. Then having said that, Chair, we will also want to talk about the relationship between the protocol and the convention itself. Madam Chair, we believe that in elaborating the framework convention, there must be a portion of the framework convention, an article which we demonstrate or at least provide for the relationship, clarity on the relationship that exists between the framework and the protocol. In addition to that, our experience looking at other framework conventions will show that elements like the objective of the framework convention, the principle that underlies the framework convention, and of course the commitment, we have direct relationship with the protocol. And in the protocol itself, there may be need for a clause to also explain what happens where provision of the protocol conflict or at least is to be interpreted vis-a-vis the provision of the framework. In many instances, such provision will relate to the fact that the provision may be in the framework convention will prevail. Now, on the issue of self-executing, we want to say that self-executing instrument have meaning in public international law and, uh, as far as we understand, it means that, that the, the instrument developed may not need further, um, further measures from nations for it to become applicable. And in this sense, we have members who are divided basically into two. For some of our members, this could be true. For other members, they must take measures within their national or domestic framework for the treaties to operate or become effective. Now, the discussions around self-executing are part of implementing measures. And we support the argument that this discussion should be had once the instrument has been fully elaborated. We believe that the workstream should be given the flexibility to look at the context of their work and then elaborate the treaties, in which case there must be rules that would be of general applications, both to those who have bilateral treaties and those that do not have. For the aspect of those rules which must deal with bilateral treaties, we support the move to have an FTA as a way to bring in those rules to apply to existing treaty network. Having said that, Chair, we are hopeful that we are finally getting to where we need to be in terms of discussing key issues and we appreciate contribution made in this regard. We thank you, Chair.

Thank you very much. And we also appreciate very much the input by Yataf. Thank you. We have now NGO2, which is the major group for children and youth. Please go ahead.

Thank you, Chair. My name is Caleb Lee. Today I'm delivering the speech on behalf of Jorge Valderrebanos, a member of Agora and the FFDE Children and Youth Constituency of the UN Major Group for Children and Youth. He writes the following. I am Mexican, and since many years ago, my country has been profoundly affected by criminality and violence, where nearly half of our economy operates in the informal and illegal sectors, in activities such as weapons, drugs, and human trafficking. In this reality, criminal organizations often act as de facto tax collectors, extortioning the citizens to profit from the many activities that the state is unable to tax. We believe that the success of this convention hinges on its ability to deliver tangible justice, equity, and accountability for vulnerable communities. A critical part of this process is tackling tax evasion and the mechanisms that enable it. We see a clear path to achieving this by ensuring the protocols address the most pressing issues for developing countries, namely the erosion of their tax base through illicit financial flows. This is a problem that goes beyond a simple technical deficit. It is an issue of sovereignty, security, and the variability of a state to fulfill its social contract. Tax evasions and IFS in this context are not merely economic challenges, but existential threats that undermine the rule of law and public institutions. We propose targeted mechanisms to combat tax evasion and streamline the adoption of new international standards. The framework convention should include commitments to combat tax evasion and illicit financial flows, recognizing them as major obstacles to domestic resource mobilization. The protocol on cross-border services should include a clear definition and provisions to prevent IFS, as these problems pose significant obstacles for domestic resource mobilization, a concern previously raised by Algeria and the African group. Establishing a clear definition and robust provisions in the services protocol is a vital first step, but it is not enough. The true test of this convention's success lies in the ability to quickly and effectively operationalize these new rules across the globe. This is where a fast-track instrument becomes essential. The FTI would serve as a powerful tool for harmonization, directly addressing the slow and cumbersome nature of negotiating tax new agreements, a concern highlighted by countries like Spain and the Philippines that support a flexible opt-in and opt-out approach. It would function as a multilateral mechanism to accelerate the adoption of key provisions from the Framework Convention and subsequent protocols into existing bilateral tax treaties. This would help avoid unnecessary duplication of efforts and of taxes, an issue raised by countries like Canada and Hungary. By providing a clear and efficient pathway for implementation, the FTI offers a unique opportunity to better operationalize provisions about illicit financial flows within the vast network of existing regional and bilateral treaties, considering that we left aside a specific protocol to fully address this issue. If the committee incorporates these targeted and explicit provisions, we can draft a truly transformative convention. We stand ready to collaborate on building a global tax architecture that delivers on its promise of a just and equitable future for all. We thank you, Chair.

Thank you also to the major group for children and youth. We look forward to collaboration with you. I don't have any other requests for the floor, but we do have more questions, so I suggest we don't hesitate, we just carry on with the next slide. So this is also something that we have picked up from Monday. And it's basically the relationship of a protocol on services with information exchange on services. We wanted to come back on a suggestion that we heard on Monday with respect to exchange of information with respect to payments for cross-border services. There are some points on the slide. You see them. Such reporting could ensure that income does not go untaxed in the state of residence. could also be the state where someone is providing a service without that state knowing that that person is there. That could also be part of that information exchange. Facilitate data and collection analysis. How is it currently collected? How hard would it be to start collecting this data? if it's desirable, should it go in Protocol 1 or in a more general provisions on information exchange in the Framework Convention? And if so is the case, then, you know, we could listen to what the plenary thinks here and then, you know, include it here and then we can have a look at where we're included in the whole framework, so to speak, of our Framework Convention and of protocols. So these are things that we've been listening to, we heard and we wanted to pick up to hear if there is some input by the plenary, its reactions to what we heard. So this is not a planned discussion, this is just, as you know, we are scoping and therefore it's important to try and pick up what has been said in the plenary meetings so far and we've tried to listen to what you've said and if possible if you could go more into depth into this that would be of course very useful but then again we know that this is this is not a planned discussion so you have might want to think a little bit very welcome to do that but if you do have any views already, that would be very gratefully received as well. So I'll pause a little bit. I don't think we can have coffee yet, Chair, but we just started. But we'll take a couple of minutes to let you think about this and see if you can give us some comments. Thank you. Madam President, I will.

Try to be as brief as I can in my intervention, and I think I will be raising more queries than I will be giving answers to the questions here. If we look at bilateral conventions, we already have a specific article on information exchange that, as far as I know, works really quite well in the majority of cases. So I'm really struggling actually to see why in our work we'd need to create a new provision or in any case a new structure for exchange. What would be, what we would be exchanging, I think I can see that, but would we be exchanging something differently with more of a framework to it, would it be automatic? Perhaps my knowledge is a bit too recent, but I'm really struggling to see what type of scope we'd provide to the specific case of taxation of services with an example that an article that would be different to the ones that we already have that work unless I'm mistaken in most cases with international oversight also to make sure that it works so I'm a bit lost on that I must say.

Thank you, Frans. Yeah, well, I think many of us are lost on it, but we don't need to, we have time, so we don't need to be short. We can discuss this. And I think the point is that we heard it and we wanted to see if it was a concern. So I have heard one concern from a developing country that there is quite a lot of service providers that are nomads today. And the country where they go to, that might be a sunny beach country three months a year or whatever, and that country actually do not know that this is a service provider in their country. Now, I don't know how to solve it. I'm just saying that, you know, this country, might have a taxing right that they don't know about. And that has been raised because they don't know that this person is in their country. So, you know, I don't know if that's something that we could solve. I heard this is a problem and today it's a problem today. So that country in the meeting actually asked if we could strengthen the rules on exchange of information to include this type of persons that move around quite a lot. So that's a sort of practical input into discussion. But again, I agree with Frans. There are rules on exchange of information and we're just thinking of if there is anything extra here. that Members want to raise, but if not, we'll just move on to the next slides. We do have another slide, so Senegal, please go ahead, and the Russian Federation afterwards.

Thank you, Madam President.

I share a large part of the comments made by France because When it comes to collecting the information, I'm not sure about exactly how it would work. Would it be an automatic exchange of information or would it be on request? So if we're exchanging data on request, one of the criteria would be that the intelligence would be available in the country. So if I take the example of someone a service provider who is established in their country of residence, who is considered as a nomad and provides a service in a third country and there are payments, well in principle this is an international payment that is paid into their account in their country of residence, so the information does exist already. And then would we draw on the information exchange provisions? Well I don't think so because the information already exists and perhaps we're not looking at the right source and that would be a problem. The other element on collection of data for analysis, we'd need to know exactly what we want to analyze. For now, we don't have any idea in substance. So first of all, we're going to create a database that will be used subsequently and We'd await for answers on that. Yet there's an important thing where information exchange could be interesting. And I'll give you a practical example now. If we were to decide to have a taxation database, well, we'd look at the net amount and then we'd need to know exactly what elements contributed to the cost of the service provided, and then there'd be an obligation that would come in that would work to say that such a service was provided over a certain period of time and cost a certain amount. and would have to be justified by the company. Then exchange of information would be interesting. But outside of cases like that, perhaps as we move forward in our work, we'll be able to decide a bit more. That's just the comments I wanted to make at this stage. Thank you.

Thank you very much, Senegal. You have pointed to some issues that could be interesting for this work stream. Thank you for that. I have the Russian Federation and then Estonia.

Thank you for giving me the floor. I support Senegal's comments insofar as information exchange could be useful to qualify services that could come under our protocol according to the tax bracket. that would be proposed in the protocol. And the effects on the taxation regime. This process could be facilitated by standardising information exchange, which would enable the tax administration to better understand exactly what services we're talking about services for shareholders for example digital services they need to be featured in the rules that we are planning to draft here so accelerating automization of standardization for taxation information exchanges could be very beneficial. When we talk about digital services, well.

There are very serious players in this area, such as digital platforms, which themselves generate significant revenues from providing digital services around the world. They also serve as intermediaries for a significant number of sellers, offenders of digital services. And depending on the approach we take, we could consider them from the point of view of being suppliers of information for tax administration purposes.

Thank you. Russia Federation, Estonia, please go ahead.

Thank you. I'm also a bit puzzled by this slide and the questions on it, perhaps because of my background. Estonia is part of very many exchange of information systems, both OECD and the EU, and I quickly checked and the OECD and European Council's convention on the mutual administrative assistance in tax matters has 151 participants. It's not fully inclusive, but pretty close to it. So I have also a similar question to Franz that are we really going to add much value if we come up with a new instrument rather than try to make the existing ones work? But just a couple of comments what we are doing at the moment. We usually don't collect data on the payments to non-residents that we do not tax under the domestic law. As soon as there is taxation, even if it's relieved by the tax treaty, then we collect the information and then we also exchange it. If we're talking about digital nomads, then my first thought was that this could be more of for concern or an issue to solve domestically. Because if you have a border control that many countries do have, you should know who is in your country. And of course it will be with a different authority unless the customs registers this person, but also customs and tax administrations could be separately, but it should be achievable within one jurisdiction. to establish whether and how long a person is in the territory and when this person leaves. And when they leave, they usually end up in another country unless they get lost in the, I don't know, not in the airspace, but perhaps in international waters for a while. So it seems that perhaps there is something that can be done domestically in terms of individuals. And I do hope that if we're talking about information exchange, that then at first we assess whether we can use the existing international framework. Thank you.

So I will come in here with my reflections on the questions that I see in the screen. I think here we're more talking about using the exchange of information as a tool. If you go to the last point, it says if such a provision on information exchange is desirable, it's not talking about setting to set a new exchange of information standards and rules that should exist in this protocol more than that if this can be one of the tools in protocol one that can use to solve this problem. Then this tool where it is, then it's something else like where it is now, it can be used or coordinated to coordinate with it in a way or another. But here I think it's more mentioning the extension permission as one of the tools more than saying that it to introduce something new or to have a new standard is different from what exists currently. This is my understanding for the slide and for the question.

Thank you, Chair. And I have Saudi Arabia. Please go ahead.

Thank you for giving me the floor. I think if we are talking about information, do we need information? Definitely, we need information to be able to enforce what we are going to develop. Now, the other question, do we need to exchange some information among ourselves? I think this question will take us to what we have highlighted before is that Unless we are clear on what the issue is and what we are trying to address and what are the models that we are going to find solution for, we will not be able to assess the information needed. Because in order to assess the information needed, we know what we are trying to solve exactly here. And then we look to what is available today with us and whether we need a new mechanism to exchange a type of information that is not available today. to the member jurisdiction. So that's I think it's we need that before we can jump to what type of information that we need to exchange among ourselves. And I think when it comes to whether should we have something in the protocol or the in the convention. I'm, I'm not sure honestly that we should embed such thing in the convention, but rather if we are going to do it, it, it will make more sense to me to have it as part of the protocol rather than of, of the, of the convention. And also, I think also all we have, some colleagues have highlighted that today we, there are some instruments and there are some mechanisms to exchange information, maybe is accessible to all, but not accessible to some. So that's also a question that need to be considered when, whatever we are going to develop to address that issue. And also the issues of capacity. building when it comes to the information that is being exchanged today between member jurisdictions, how to use that information is also for the purpose of the protocol that we are going to develop. So that's my comment. Thank you.

Thank you very much. That was very helpful. There is a role for exchanging information when you deal with services and we will, I'm concluding that we will keep our ears open to see what that role will finally be, if it's really something that is missing from the actual framework, which we know there is a huge framework out there on exchange of information, but we will keep our eyes open to see if there's anything that we could add to that which would be specifically needed for our purposes. I have Cote d'Ivoire, s'il vous plait.

Yes, thank you, Madam Chair. I'll be very brief, especially given that you've already addressed one part of my concerns. We must not forget that we are talking about cross-border services taxation, and when we talk about these services, we need to keep in mind that this is something that takes place across borders. So to exchange information -- do we need to exchange information to ensure equitable taxation of these services? Yes, indeed. In order to tax them, tax these cross-border services equitably, we need to exchange information. So what type of information, what kind of information do we need to exchange? I believe that more in-depth work on these protocols will show us, will indicate the type of information that we need to exchange. The second or rather third question is, do current mechanisms for information exchange, are current mechanisms satisfactory in terms of exchanging the type of information that we have identified I believe that today, in light of the novelty of these services, existing mechanisms might appear somewhat inflexible, but again, future work will shed light on what exactly is required. So our position right now, off the cuff, is that yes, we need to address the question of information exchange, do we need to include it in the protocol or in the framework convention or does it need to be a standalone protocol? I think for the time being, we, I think I've only addressed the most basic aspects and we don't have enough information to answer that question.

Thank you. So We have heard some input and we will therefore keep our minds open to what is necessary for the work forward and having the information that is necessary and we will see where it fits in into our whole project of a framework convention and protocols. Do you want to say something? Patricia, Secretary.

Only if the co-lead is happy to have me do it. But so this, as the co-lead said, this question, the first question did not come from us. This was a suggestion that was made on Monday. But as we thought about it, we thought it was worth discussing. And I'll give two reasons. One, you know, before I came here, I was working in academia. I was doing some consulting for a non-US company. And I received a payment from the, of course, with respect to US clients. I got a 1099 that was reported to the IRS, but when I was working for non-resident companies and getting paid, the IRS had no idea that I was earning that money. And so, of course, I reported it, but one could imagine that others might not because there is no automatic system of exchanging information, as far as I know, of exchanging information with respect to cross-border services. and that can be important if you're dealing with, you know, it doesn't even have, I was gonna say neighboring countries, but it has, doesn't have to be neighboring. There was a whole ocean between me and the company paying me. Um, so that's one point. It, yes, maybe the mechanisms exist, but they maybe are not used. And I don't know how the IRS would've ever asked, frankly. known to ask in that case. And the other point is one we've spent a lot of time or we've heard a lot about economic analysis. And I've talked to a number of people who have tried to do research in this area. And the difficulty that they have had is that the trade data on services does not sort of map to the current categories in tax treaties, which means if you want to do an economic analysis of potential new rules, you actually don't know what the baseline is. right, because you don't know how those services are in fact taxed under treaties currently. So it's difficult to figure out how changes in those rules could affect the revenues that are collected, the risk assessment that people are talking about. And so this question that says, is this information collected, is goes not only to data collection and analysis under the framework convention, which is what the TOR talks about, but it actually, if this data exists in a way that actually looks at the classifications under treaties right now, it would be really helpful to the secretariat to know that because it would help with the economic analysis that you have been asking for. So we thought it was, you know, We'd ask.

Thank you. I have Sambia. Please go ahead, Sambia.

Thank you, Madam Chair, and good afternoon to all the delegates. So I agree with, I think, Saudi Arabia when they mentioned that we need to find out what the problem is with the current existing frameworks. for us to be able to determine what the correct treatment for this will be. And I think after Secretary Aitchison spoke saying, obviously, it's something to explore, so I just thought I would ask, so would this be something like the CRS, but more of, if I could call it CBS, kind of automatic exchange that we're talking about, that it would have to be automatic for whatever services we're receiving from the jurisdictions that say that sign up to the protocol, then we always have to pass on, I don't know, and also what information are we passing? Is it the value of the transactions or the type of services rendered and things like that? I just wanted to just get clarity on that. Thank you.

I think it's a scoping exercise we're doing now. And it's part of trying to see if there are cracks in the actual system whereby this type of income is not reported and we do not get it. So it's trying to focus on the service activities. And my example was what I had heard from developing countries that wanted to know if these not necessarily digital nomads, but service provider nomads that move from one country to another, they wanted to know if they were providing services from their country. That, of course, will then depend if if they are going to tax that, if we're going to give them taxing rights. But that's part of the analysis that we have to make in the end of the day when we have set as Saudi Arabia, as you say, Sambi, when we have sort of decided on the fair allocation of taxing rights. But the point I think when we heard the question on Monday and the discussion we had here with the Secretariat and the Chair, we do the fair allocation taxing rights and the second step then would be do we actually have the information? that we need to be able to tax that in new allocation of taxing rate. It's just a question of checking basically, but it's just raising the question that we need to hear from you here. And you know, is this important still? And I think it is, you know, and we just need to do as our colleague from Saudi Arabia said, you know, we need to find out what is the allocation and then to make sure that we have the information that makes it possible for us to tax as well. Uh, Singapore, please go ahead.

Thank you, Madam Chair. I just want to also add on to what our colleagues from Saudi Arabia has explained. I do think that it is important for us to have a better understanding of what are the issues that we are trying to solve and then to do a proper analysis of whether exchange of information is the solution. Just reacting very quickly to some of the questions that you have asked. I think for some of us have had experience with exchange of information. It is not a easy exercise. It is in fact quite costly mechanism where we need to put in place processes to either collect the information, to think about transmitting the information. And there is always a question of do the recipient jurisdictions, do they really use the information? And for EOI system to be effective, I think it is important for all parties, both the intermediaries that may need to collect the information, pass the information to the tax administration to process, and thereafter for us to then transmit to the receiving jurisdictions. So in the whole scheme of things, there are many parties that will be involved, and there will also be costs on all the parties as well. So I think that it is useful maybe for all of us to have a better understanding of is this the information that we really need and if so whether we are prepared or we are in the capacity to actually put in place the processes to collect the information and then to think about how do we use the information. My own preliminary view is that probably this will be a matter that needs further discussion before we can decide whether it should be included in the protocol. Thank you.

Thank you very much, Singapore. I have Germany, please go ahead.

Thank you, Madam Co-Lead. I apologize, apologies upfront that I'm a little bit off track, but I missed part of the discussion. And I'm now being confronted for the first time with that slide about the exchange of information, and maybe I'm not so -- you know, again, I have missed a little bit, but I would just want to share some reflections on that with you. And I was just listening what you said that we would have to consider which information would be required based on the rules we are going to determine. In an ideal scenario that would be the case. However, in reality rules have to be designed based on what is possible in terms of transparency because not everything that is desirable is also from like a realistic economic point of view is feasible. And it is, as was just said by Singapore, it is not as easy as simply exchanging information, unfortunately. There has to be someone who is reporting the information in the first place. So normally there is an intermediary. More typically, this is someone who is subject to other provisions or regulations that already requires them to apply some kind of due diligence. So something like anti-money laundering regulations. For some sectors, service providers, there might be other provisions that prescribe such kind of due diligence, which includes the identification of the person on which the reporting is taking place. But what is typically of a greater interest is to identify the beneficial owner, and that is more difficult. then secondly, the information have to be reported and it is always about being -- so like striking the balance, not ending up with an over-reporting and being flooded with information that is never going to be used that is also like very sensitive when it -- from the perspective of like data minimization and data protection. but also the technical infrastructure that is required to do so. And ultimately, it is costly. And it is not only costly for the tax administration to process all the information, but it is more expensive for the businesses, for the service providers, and ultimately kind of the consumers which have to bear the costs. And this is something one really has to be mindful before simply designing rules that require the exchange of information in order for the verification purposes or to avoid the abuse or misuse or the avoidance or evasion. But it is often enough, it is more wisely to do it the other way around. Thank you.

Thank you, Joern. You had also asked for the floor just before lunch. And I don't know if you want to come back on that. You're very welcome to do it, although it's changing the subject, I suppose. But if you want to think about it, I have the United Arab Emirates before and then you can, you are very welcome to come back on that if you want to Germany. United Arab Emirates, please go ahead.

Thank you, Madam Co-Chair. And I'd just like to pick up on the last point that I think Germany just raised and that was around the enforcement and I think we are very much of the view as well that it's, We're quite, we're finding it quite strange that we're trying to define something that you can enforce when we don't actually know what we're enforcing. So for us, I think it's much, it would be much more sensible if we focused on the primary technical issues around the taxation of services before we kind of looked at this topic. And in particular, I think, just like to cast our minds back a year ago and one of the fundamental principles of the Framework Convention as well was the recognition that we wouldn't have a duplication of rules, particularly with existing rules. So I think as many delegates have mentioned, these kind of systems around exchange of information, they're not easy. There is, for them to be truly effective, you do need to have then assessment procedures in place and of course, all the like I think it was Michael that just said the costs around you know the infrastructure then the actual end-to-end processes so I think we're a little bit confused or concerned that we're shifting away from what was agreed that would be the original protocol was the taxation of services and at the time we did also obviously discuss exchange of information as well and it wasn't chosen as a specific protocol so I think to add it here as an add-on feels like it's stretch. Again, I think we should be focusing on the actual problem that we all agreed that we would focus on, rather than trying to solve things that are just far too complicated to solve in one go in this case. Thank you.

Thank you very much. I have Switzerland.

Thank you, Madam Co-Lead. I will echo everything that was just said by my distinguished colleague from the UAE. That was quick and short. Thank you.

Okay, I don't have any other flags up. I think we understand, oh, Nigeria, please go ahead.

I don't think we need to look too far because exchange of information is critical to the work of tax administration. And if you go to look at the discussions that were had previously, it's a part of the commitment that is expected to feature in the convention. And it's also listed as a possibility of looking at exchange of information as a protocol, having a protocol on exchange of information. Yeah, quite agree with colleagues that currently there are instruments for purposes of exchanging information, but if we cast our mind back to the discussion, I think in the morning session or yesterday, I think somebody, a delegate really drew our attention to the fact that there are bilateral treaties that were done or negotiated during the pre-colonial era. Most of these treaties don't have provision for exchange of information. So that is a challenge that we must consider. The second issue, I think Singapore and some other have also reiterated it, that the exchange of information, yes, in theory it looks so simple, but in real application of it, it is not as simple as it seems. Uh, if you consider developing countries, and especially on the African continent, I can tell you that the number of, uh, countries that are able to implement exchange of information are just very few, maybe about 15. five or six or so because of the strict requirements of confidentiality and data safeguards that must be met. So it's not as if it's working effectively for everybody. So if we are able to have a more simplified rules or platforms and we have an idea of what exactly the data that we want to source and they are available, so it may not be a bad idea, but I agree with the suggestion by others that for now we are dealing with the service article. So is this the appropriate place where we should have it or should it be in the framework convention? I think since the conference this is this commitment as spoken as stated that it should it could be a part of is a commitment under the convention then it could be it could feature under that convention. Thank you chair.

Thank you very much. Yes, I think what we were thinking of is just to identify gaps because I think we all recognize the tremendous work in other forums on exchange of information and the whole, you know, framework that already exists in this particular area. And I think the only thing that we were concerned about was someone who raised the issue on Monday. And I also think that we still need to keep in mind when we design our rules that it should be possible to get the information in order to be actually able to tax it as well. And even if we don't include anything in in our protocol on exchange of information if there's anything else, but we should be aware of it. And so any problems that we have and anything that we identify with allocating our taxing rights that affects that protocol in its implementation, at least we should be aware of it. I have Sierra Leone. Please go ahead.

Thank you very much. Thank you very much. So I just want to, you know, share Patricia's concern about tax administration that may possibly not have, you know, real time information from taxpayers involving cost by the service. So imagine if advanced economies have such challenges, how much more, you know, developing economies and us in Sierra Leone, we We're having such issue as with the increasingly people involved in cross-border services and we're relying on them to actually declare the taxes, their income and pay the correct taxes. And if they don't, we don't have the necessary mechanism to get such information. So as colleagues from Zambia and Saudi Arabia has expressed, there are existing framework that governs exchange of information and these frameworks or rules to be critically considered as we are discussing how we develop rules and framework that involves cross sharing of information when it comes to cross-border services, which is really critical for us in the developing economies. Thank you very much.

Thank you very much, Sierra Leone. I don't have any other hands up. I will give the floor to the secretariat. Patricia, please go ahead.

Thank you, Lieselotte. I just wanted to come back on a technical point that the delegate from Germany had raised and the United Arab Emirates, and that is about determining beneficial ownership, layers of intermediaries, the cost of implementation. all of that is obviously a key point when you are dealing with CRS because of the layers of intermediaries between the paying company and the recipient. Um, and but it is not the case with respect to most services, right? If you Michael seems confused that I said that. So I'm sorry. I was just going to leave it at that. But remember, I spent four years on the CIV and Trace project learning about the plumbing of the international financial system. So in the case of securities and a lot of the financial accounts that we're talking about in CRS, you have a company that is paying a dividend. It has a paying agent. That paying agent pays to one of the, in the simplest case, a clearing organization. The clearing organization pays to a global custodian. The global custodian pays to the local financial institution where the customer may have the account. In the simplest case. What was that? Five, six? we're talking about services. The services are not, in most cases, not going to go through a paying agent because they're paying to a few people, not thousands of shareholders or thousands of bondholders. And so it's probably the paying company paying to a single recipient, possibly to the recipient's bank account, in which case there would be a record. So I fully acknowledge the complications of CRS. I fully recognize all the costs that have been referred to. I understand the cost to developing countries that have prevented them from participating in CRS, among other barriers. But let's not assume that the same costs would be incurred here because the situation is very different.

Thank you for clarifying that point, Patricia. I think, again, just repeating, we keep it on the table in order to understand and keep it possible for any allocational taxing rights that we would have to be effectively able to be taxed where it corresponds. So we keep that on the table for future, not necessarily into our protocol, but we should be aware of it. I think that's the conclusion I get to today. So we have actually -- I think we have -- We want to have a coffee break, so let's have Let's see if we can do 15 minutes this time. So we have a coffee break for 15 minutes. And we can put up-- before we go, let me do this. We have a third slide, which also has been raised questions from Monday, I think. Could you put up the third slide, Katie, so we can have a look at this and see if you can think about this over coffee? I don't know if you want to go through it or do you want a presentation and then we take the coffee break? Okay.

Do you want me to do it? Yeah. So I hesitate. Again, these are not, this was not a question raised by the secretariat. This is the first question was, it was suggested that protocol two would have to have its own dispute resolution mechanism in it. And I don't remember who raised it, although it did also has come up in at least one work stream meeting as well. And so the question, so that sort of general question led to these sort of follow-on questions. If you did want to have such a -- before you draft something and put it in the protocol, you first have to decide what mechanism do you want to use to resolve those. Do you want to use protocol two? Would you want to apply a state-to-state dispute resolution mechanism that would apply to disputes under the framework convention? This is the type of dispute resolution mechanism that is referred to in paragraph 13 of the TOR. Would you want to put in a MAP-like procedure? So it is also state-to-state resolution, but it's specific to Protocol I, so it'd be more like a MAP. or just leave it to normal domestic litigation approaches where the investor, if the investor feels that one of the parties to the protocol is not applying it, they could go to correctly, they could go to court. And that will depend a bit on how specific the protocol is. So these are the options. that we came up with this morning, there may be others. But before you think about, you sort of need to think about who can bring a case and how do you want it resolved? If, and remember, keeping in mind that all the protocols are optional, we talked about it. So you can't just say everything is going to be resolved under protocol two. I mean, you can say that in protocol one, but it is possible that there are parties to protocol one that are not where a dispute arises and they are not both parties to protocol two, which is why this issue arises.

Thank you for that, and then you have some time to think about this, we'll have 15 minutes coffee break.

Now it's 10 of, now it's 450.

We have 15 minutes and it will, we will resume 10 to five.

Play song, Manoj Kumar.

Dear colleagues, I think now we are opening the floor to get your comments and reflections on the questions which is on the screen right now and to know your thoughts about it. So the floor is opened. Mr. President.

Maybe I would not refer to all of the questions, but I would like to comment on something here. Having in mind that, let's say, in one of the scenarios we are going to have the this self-executing protocol on the services. As I said before in my previous intervention, it is kind of small double taxation treaty on the services, yes. So I cannot imagine situation when this kind of treaty could be effective without the effective mechanism for the dispute resolutions based on the cases concerning the cases based on the application of this kind of protocol provisions. And we have also protocol two, which is going to be like comprehensive solution for the dispute resolution for the international cross-border tax cases, let's say. We do not know yet the precise scope, but generally I understand that this is the reason why we have chosen this topic for the second protocol. It is that we want to cover all the possibilities to solve the international taxation cases between the parties of our convention and the protocols. I think that This protocol should concern also the protocol first, yes, because duplication and having the same provisions in protocol one and protocol two would not be the good solution, because it would be the creation of the two simultaneous systems, which it is, in my opinion, not very good way to do it. But there is a but, because if you have a protocol, first protocol, without any dispute resolution mechanism, so in my opinion, and we have on mind that the effective way to apply the provisions of this protocol is also having some dispute resolution mechanisms. So in fact, we should think that the consequence of this kind of thinking should be that the Protocol II for the countries which sign Protocol I should be mandatory because without having any dispute resolution mechanism, the Protocol I wouldn't be effectively applied. So I think that our decisions during the February session like the consequence of this decision is that if we want to have the Protocol 1 as a self-executive instrument, then it is normal consequence that we should then be a party also to Protocol 2. Until we would not decide that we will go for the kind of solution based on the BEPS MLI, because then, in fact, the situation would be totally different because then we would have in Protocol 1 only provisions modifying double tax treaties between the parties of this protocol and double tax treaties already contain the dispute resolution mechanisms. And in such a situation, Protocol 2 could be totally independent, separate way and alternative to solve disputes in the international taxation without this close connection with the Protocol 1. So I see this situation in these two different ways we can go here, but in the first case when we see that the Protocol 1 should be like self-executive international agreement, then the consequence of this is that Protocol 2 should be just simple mandatory instrument. Thank you very much.

Thank you very much for that input, Poland. I have Saudi Arabia. Please go ahead.

Thank you for giving me the floor. I think this takes us to our intervention in the first session. is that we are talking about, we will have a protocol for dispute resolutions. And then we also discuss dispute resolutions under the convention itself. And then we have the dispute resolution here for the services, digital services or cross-border services taxations. We are talking about optionality under for these protocols. So it is optional to join one but not the other. So we cannot envisage a case where a country joins the protocol on cross-border but not the dispute resolutions one. Therefore, we put a suggestion at the beginning is that maybe protocol, the protocol on dispute resolution focus only on issues that we have today and disputes that are arising today is because not everyone have a tax treaty with the other. And each protocol, like the cross-border services and maybe future protocols that will come, each should have its own dispute resolutions mechanism. Maybe to the issues of leave and get through domestic litigations approaches, Again, I don't think that this might be the best outcome because we are talking about multilateral instruments and allocation of taxing right. So definitely if a jurisdiction increase its own allocations of taxing right, that will impact the other jurisdictions and that will be a nightmare for the taxpayers, which we should definitely keep we focus on here, that certainty and dispute resolution, dispute prevention is something very important for all of us and for all of our taxpayers. So something like MAP procedures would be definitely more preferred and definitely we are open to more options and alternatives for that matter. Thank you.

Thank you very much for that, Saudi Arabia. I have the United Arab Emirates. Please go ahead.

Thank you, Madam Co-Chair. As has been raised in the past few days, I think what is important is to determine whether the scope of this protocol will be covered by existing international model tax treaties. So for example, if it is, then the dispute resolution mechanisms in those tax treaties may apply and if we devise a separate mechanism which also applies then you might end up running counter intuitive to protocol two in terms of increasing tax disputes regarding the correct dispute resolution mechanism so therefore we strongly advocate as we have done that the committee should not seek to reinvent the wheel and draw on the productive work regarding dispute resolution mechanisms including that within the UN Model Tax Convention. Thank you.

Thank you. I think we do need to clarify that the scope that we're looking at now is not only actual relationships on bilateral tax agreements. Yeah? So it is wider. That I would like to make absolutely clear. It might have been somehow misunderstood because we were talking about one of the problems that developing countries had was with their actual tax treaties, but the scope of our work is actually wider than that, so we must keep that in mind. Thank you. United Arab Emirates. I have Brazil and then the Russian Federation. Please go ahead, Brazil.

Thank you, Chair.

I would like to as straight as possible, direct as possible. At the current stage it's quite difficult to choose for any option to have a sound perspective on which approach should be taken because we don't know whether we will restrict it to tax treaties, we will just an instrument to put on top or to modify tax treaties or whether we will make it a bit bigger than the.

Scope of tax treaties as you just mentioned.

So I think that it's for the moment quite difficult to take a position on that. I think that I hope that from our discussions I think that to the full extent possible we.

Put a lot of.

Weight on administrability and simplicity of whatever we can find here as a scope for protocol number one and then.

Also that would reflect on what the mechanism should be allowed to solve disputes?

So if we find the simplest possible solution for the scope of protocol.

One, then we would calibrate accordingly how we have to solve.

It, whether through the connection with the protocol number two or maybe as part of what was just mentioned as part of the map resolution.

Disputes under double tax treaties as usual.

So I think at the current stage, it's quite difficult to take a position and we will have to see more on the scoping exercise to define what would be the optimal dispute resolution mechanism.

Thank you.

Thank you, Brazil. I have the Russian Federation and then France.

Thank you for giving me the floor. I'll try to answer the questions in order. or at least I'll try to provide answers. Of course disputes should be resolved, but how and through which mechanisms, that is the question. Regarding the first question, should they be resolved exclusively under Protocol II, probably not if Protocol II might be optional here, we will agree with the Secretariat, a country might be party to Protocol I and not Protocol II. At the same time, if Protocol II is developed and if it provides effective mechanisms for dispute resolution, then States parties to Protocol I would also be interested in being a party to Protocol II on dispute resolution. I don't know to what extent we can discuss whether or not Protocol II on dispute resolution should be mandatory. I'm not sure that that should be the subject of our discussion right now. But If a country is a party to Protocol II, then yes, it can be applied to resolve disputes under Protocol I. Should the mechanism included in the Convention itself be used? Well, it's hard to answer that question because we don't know what mechanism the Convention itself will contain for dispute resolution and how it can be used. Will it be universal? Will it be adequate? So I think attempting to answer this question right now is premature. Would that mechanism allow dispute resolution under Protocol I as well as other protocols and other issues that are part of the convention? Would that mechanism be appropriate? Will it be universal or not? It's difficult to answer that question right now. The third question, using a MAP-like procedure for the purposes of Protocol I, perhaps this is something we should focus more on because if we have an international convention for Protocol I, that will interact with existing tax agreements in some way, then a MAP procedure that is contained in those existing conventions would automatically apply to bilateral disputes under Protocol 1, and they could be used whether or not they will be effective and whether or not they can be used in all cases. That is the question. It's possible that they won't be applicable in all cases. And there's another concern here, which is that Protocol 1 could give rise not only to bilateral disputes but also multilateral disputes if it covers purely digital services. then in the case of a dispute with more parties existing maps might not be sufficient and a separate mechanism might be required. So it could be a separate mechanism under Protocol I that would be used for dispute resolution or if there is a good toolkit under Protocol II then that could be used as a reference. And this is something also for discussion during future meetings. And finally, the last question about using national normal domestic litigation approaches. Well, of course, these can always be used, but they might not always be effective for cross-border disputes, and they might not always lead to a solution that satisfies all parties. So in our view, the preferred options would be either Protocol 2 if it is developed and effective, but the issue here is the optionality, or it would be a MAP-like procedure under Protocol 1 that would allow for dispute resolution pertaining to Protocol 1 disputes that involve many parties and not just two parties perhaps. Thank you.

Those were very good considerations that we need to consider. So thank you for that, Russian Federation. I have France and then Italy.

Thank you, Madam Chair. If you'll allow, I'd rather ask a question on the eventual scope of our work. or in any case the protocol, perhaps I missed something, but as I understood it, we might be considering a hypothetical situation as we discussed yesterday where everyone decides for themselves, or we're looking at a convention where there's a legal obstacle in that legal obstacle that these protocols that we're discussing could help overcome. If we are looking at the convention framework, then we can have an information exchange mechanism and a dispute mechanism. But if we're looking beyond the convention, then again, it's everyone fending for themselves and everyone deciding for themselves in terms of what mechanisms they use for taxation, for services. But again, here I don't see how there could be a dispute if there are no legal norms in place that lay down certain limitations then how would a dispute arise with another country so I'm a little confused about what is being proposed here because the this might not align with the scope thank you.

Thank you, colleague. Thank you, Chair. It's difficult to answer now, to reply now to these questions because, of course, it's quite premature without looking at what the framework convention says, for instance. We had thought that the framework convention was those overarching legal instrument where the commitments are translated into legal terms. So we expect that all the commitments are translated there. So also the dispute prevention and resolution, as well as the exchange of information, the cooperation and others. So perhaps we imagine that the framework convention would have some legal obligation to the parties to include in their domestic law effective provision to prevent disputes, because this is more a question of domestic law than on treaties. And then perhaps making reference to the second protocol for the implementation rules of the dispute resolution. Then there is the problem of the optionality of the protocols, of course. But all the parties should be more encouraged in signing as much as possible all the legal instruments we are trying to do. What we want to say is that perhaps we should end up in some agreement in this framework convention looking at the drafting. and seeing if it really covers dispute that may arise on the framework convention itself, because we will have definition on the framework convention, for instance, which is a field where dispute may also arise. And then see how we can end up in the second protocol, possibly allowing options so that the majority of countries may be parties that. What we would not like to lose if some provisions are included on Protocol One as far as dispute are concerned, to lose completely the approach on prevention because for intercompany services, the prevention of dispute is also a very important issue. And another thing that we would like to have, having this possibility of designing the new architecture, is not to lose the multilateral option that this new instrument gives. So let's go step by step and try to translate into legal terms, DTR in the framework convention, and then discuss again when we have more awareness if we could really end up in some agreement on protocol two. Maybe it's useless to duplicate something in protocol one, but at the moment we are not able to say that. Thank you.

Thank you, Etila. I think you're right. We can't really say it's duplicate unless we have both of them ready. So thank you for the considerations and the input. I have Switzerland and then India.

Thank you, Madam Co-Lead.

I agree with my distinguished colleague from Brazil that it is early to actually answer many of these questions, especially until we know the content of Protocol 1. We have just seen in our previous discussion that there are different options of a amending protocol or maybe you still need to do bilateral agreements next to the protocol and that will make a big difference in the answers to the questions. Here we can maybe think what can we cross out to simplify the situation and I think the last option, which is normal domestic litigation, at this point we can already say that wouldn't work to handle problems of the application of a tax treaty, which is Protocol 1. Protocol 1 will be a binding international treaty and you need a provision in a binding international treaty to handle those disputes.

And finally, when we do.

Get into the details once we know more about Protocol 1. I think I'll echo what the UAE said on avoiding to reinvent the wheel and duplication in cases where, for instance, Protocol 1 is adding one, let's take the option where it's adding one new article to an existing tax treaty.

So that's all I have to say.

Thank you very much, Switzerland. Just, I had a quick chat with the chair, and of course, when I mentioned that we shouldn't have duplication, there is the point made by the Russian Federation that if we have two protocols and you don't need to sign both of them, you might need to have, you know, rules in both of them. So, you know, but that is still to have to be considered. I have India and then Colombia. Please go ahead, India.

Thank you, Chair. We agree that there is a merit in having a separate dispute resolution mechanism for each of the protocol, particularly given the possibility that some Member States may not agree to certain provisions of protocol two. However, this naturally raises the question of whether the dispute resolution elements developed under Protocol 2 could be incorporated into other protocols or whether we would need to design an entirely new mechanism each time for every protocol. And though I believe that it is premature at this stage because we really don't have a complete picture of either of the protocols, nevertheless, in the interest of efficiency and to avoid unnecessarily, which has been also stated by many of my colleagues, reinventing the wheel, it would be prudent to develop a framework that provides a common set of dispute resolution options adaptable to different protocols. And such a framework could offer a range of procedural choices and safeguards, enabling countries to select the approach that best aligns with their legal systems and policy preferences before acceding to the obligations under the protocol. And I submitted in the morning also, this flexibility would help accommodate diverse domestic positions and in turn encourage broader participation. Thank you.

Thank you, India. Colombia, please. Senegal.

Thank you very much, distinguished co-lead. Colombia, Following what Brazil said, we believe that we're at a premature step in which it's difficult to resolve these questions without being clear on the scope of protocol one and the level of detail that this agreement will have. So until we have it defined, we can't decide what the best mechanism to resolve disputes would be with respect to this protocol. Furthermore, we agree that it is difficult to leave protocol to close because as a lot of delegates have mentioned there are countries that might sign protocol one but that wouldn't agree to sign protocol two so I think we'll have to introduce something in protocol one on this dispute settlement mechanism however we'd also have to look at what happens when we conclude this protocol whether it comes under the framework convention, look at the provisions or whether definitively we would have to have an instrument under the protocol itself. However, at this stage it's quite difficult to say for sure. Thank you.

Thank you very much, Colombia, says the co-lead, for pointing to the options that we need to have. Thank you. Senegal, please.

Thank you, Madam facilitator. I think that as certain delegates have pointed out here, we can only make general comments and observations at this stage. And my first observation is that we do not yet know what the scope of Protocol I will be. What kind of disputes could the convention generate? That is That is the challenge. We don't know at this point what kind of disputes those would be, so it would be very premature at this point to try and make progress on the mechanism for resolving disputes generated by this mechanism. And that is also why we see a certain incoherence here. How could a dispute born of a binding convention be resolved through a protocol that is optional, that would mean that this wouldn't even ensure legal certainty because if my country is not a signatory to Protocol II and we have a dispute arising from Protocol I, how can we be a party to this dispute resolution? That is indeed an issue, and I think we need to make further progress on the substance of the actual protocols in order to answer this question. When it comes to state dispute resolution, well, As Resha said, we could also have disputes that would be of a multinational nature when it comes to digital services. So I think at this stage we need to make a lot more headway and a lot more in-depth thinking on the substance of the protocol in order to address this in more detail. However, it would be desirable for each protocol, for each legal tool to contain provisions on dispute resolutions. That would be desirable and that would ensure optimal tax collection. Thank you.

Thank you, Senegal. I have Ghana. Please go ahead, Ghana.

Thank you, Madam Chair. And I wish we had such questions when we're fresh in the morning, not when we are so fuzzy after lunch. But I'll try. Now, we had some discussions about this in work group one actually. And the general discussion was around having two considering the dispute resolution mechanism in paragraph 13 of the TIR under the framework separate from the dispute resolution protocol such that the one in the framework would look more at the state to state issues when it comes to the framework and then the one in protocol two would look at the disputes that will arise between states and if I should use the word taxpayers when it comes to either cross-border or whatever other disputes that may arise. Now just listening to to others this right now the question really that he raises is what if somebody doesn't sign on to protocol two. Um I think the there's something interesting in the military. When they ask for volunteers. What I do know is that they will ask for volunteers that want volunteers and then they select you you you you've been volunteered. I think that protocol two might end up having to be something which If we want to sign on to the framework convention, we might all have to sign on to anyway. Otherwise, I don't see how we are going to resolve our disputes. It means that we are leaving ourselves wide open when it comes to resolving disputes under other protocols, because we wouldn't have any basis to do that. So as we go along, I think it's something that we'll need to think through very carefully. I mean, as we said, the protocols are optional. You can sign on to it. But the question is, how optional will such a protocol or protocol two be in terms of how we want to go for it? So these are questions, and that's why I said that sometimes these questions shouldn't come when we are fuzzy-minded. It should be when we are fresh. Thank you.

Thank you very much, Ghana. I don't have any other member participants asking for the floor, so I give the floor to stakeholder 10, the Bombay Accountancy. Please go ahead.

Thank you, Chair. Even late in the evening, it's possible to contemplate a structure of documents wherein the provisions are linked to each other. So what I intend to say is that you know, we are at the designing stage. It's for us to design the documents, the contents of it, and how they get linked. So it's possible that, you know, we can think of Protocol Two, which may contain two, three, four, five methods of dispute resolutions. Now parties who are not signing Protocol Two may still adopt one of the methods contained in the protocol two. So protocol one dealing with services may say that if there's a dispute on services related issues, then paragraph 13 to 25 of protocol two will be applicable. And this paragraph need to be designed in such a manner that each of them represent a separate capsule. So there could be chapters or separate capsules or sections within protocol two which will contain different methods. So a person adopting that method need not necessarily adopt all the methods. So tomorrow after five years, 10 years, we may have 15 protocols. Are we going to keep on repeating the dispute resolution methods in all the protocols? Or we can have a one single protocol which is protocol two, we can act as a warehouse of methods and whichever the parties want, they can keep on linking the method, they can keep on adopting the method from protocol two. without signing the entire protocol, without accepting everything which is there in the protocol. Thank you.

Thank you very much for that input. I now have NGO2, which is the major group for children and youth. Please go ahead.

Thank you, Chair. I'm speaking on behalf of the FFD Children Youth Constituency of the Major Group for Children and Youth. Chair, I would like to remind everyone in this room that this global tax convention will not solely affect the economies of countries across the globe, but also chart the course for the future. Therefore, it is vital that we design a convention that doesn't merely serve as an economic--.

Sorry, could you speak a little bit slower because we have interpreters trying to follow your speed?

Apologize for that, but a future proof solution that brings us closer to the completion of the 2030 SDGs and promotes countries to participate on an equal playing field. Firstly, precise definition that clarification are essential in the creation of equitable future proof tax convention. The current ambiguity surrounding forms of taxation not only results in inconsistent interpretation by tax authorities and courts, but also drives us further from a globally recognized and acceptable convention, which allows all countries to contribute while respecting their interests and sovereignty. An equitable, sustainable, and future-proof solution is unachievable when ambiguous language obstructs a clear vision for the future. Chair, we believe that children and youth must be involved in these kind of conversations, offering our expertise and perspective to shape policies and definitions that are able to mold with the future and address realities rather than ideals. Secondly, we recognize and respect the sovereignty and interests of all countries. Therefore, children and youth call for a convention which establishes a strong legal base that works in tandem with countries' domestic policies. In cases where the implementation of aspects of the protocol is hindered by domestic policy, we believe that the convention should encourage and uphold pre-existing bilateral treaties. Distinguished delegates, Mr. Chair, colleagues, let us work alongside children and youth in the creation of a convention that prepares for the future rather than trapping us in the past. Thank you.

Thank you very much. I have Ataf, please go ahead.

Thank you, Madam Chair. The question is a difficult and critical one, but our preliminary thoughts we still derive from the TOR. Paragraph 13 of the TOR spoke about dispute settlement mechanism in the context of the framework. So preliminarily, we think one of the ways we can go about resolving this issue is to look at developing that mechanism in such a manner that it can attend to disputes also arising from the administration or implementation of the protocols. And I say that because why we elaborate the relationship to exist between the protocols and the framework. One key issue which we must underline is that the protocols will be implemented by the governance architecture that is established by the framework. That being the case, we may want to elaborate that mechanism and empower it in a manner to help resolve disputes arising from the protocols. The details of how the mechanism could be triggered could be a subject matter of the protocols themselves. That is to say, in instances bearing this and other possible terms, the mechanism could be triggered. That aside, we are also looking at ensuring that the protocol two, which is on dispute resolution, do not just simply become a kind of, because if we have dispute articles in all the protocols, and then we have protocol two, what will be the purpose of protocol two? Since all the independent protocols will already have dispute resolution articles or mechanisms. So we have to look at that critically and see how we are able to make progress. The alternative would be to say that dispute resolution protocol should be mandatory for any member signing onto the framework. But I think that ship has sailed and we just have to find a way to walk around it. We thank you, Chair.

Thank you, Attaf. I have, let's see, there's only one more in person that, Nigeria. Please go ahead, Nigeria.

Okay, thanks, colleague. I think it looks simple on the screen, but really it's not really as simple as it looks. And probably this should have been shared early in the morning to enable delegates to really discuss this and be able to give a good opinion to the secretariat. It is certain that we can prevent dispute, but we cannot avoid it. But we must be clear what kind of dispute do we envisage under this first protocol. It could be a dispute between the revenue administration and the taxpayer. And if it is such, because we know that the protocol itself will not give you taxing rights, you still need to revert back to your domestic provisions to tax the transaction. So if it is because I've raised an assessment and the taxpayer has disputed it, then such taxpayers would therefore be able to use the domestic provisions of the respective jurisdictions to address or to resolve that dispute. We know that dispute could also arise from misapplication or misinterpretation of the provision of the protocol that is between two states. So if we have that, and because of the reason for the optionality that you have said that somebody or a jurisdiction might sign on to the first protocol without signing to the second protocol, we may then have no choice than to have a kind of article or provisions within that first protocol to be able to resolve issues like state to state dispute that could arise from such. I think I just end it there.

Thank you. Thank you, Nigeria. And I don't have any more hands raised, so I give the floor back to the chair. Oh, International Chamber of Commerce. Please go ahead.

Thank you, Madam Chair. I think I will be very, very brief and I will also be slow. This is just a short comment to emphasize once again that for businesses, tax certainty is of paramount importance. So it is indeed important to stress out that for Protocol One, whichever solution will be drafted, and discuss in the next session. But at the end, the solution that will be contained in Protocol 1 needs to have a way of solving the dispute that might arise. So we're not able to tell you which form of mechanism should be adopted, but we just want to emphasize that it's important to have a mechanism in place to solve any dispute that might arise from Protocol 1. Just as a quick remark on the past few days, in the course of the previous days, there's been a lot of questions that have been raised and discussions. These are strongly linked, we believe, to the different business models, as someone else have raised, even the discussion we had today. And even all the questions that have been raised, we believe it's really important to think about this business advisory council or a way to dialogue with taxpayer, I'm not able to give you the explanation of one single business model because that's not size that fits all. Business models are very different. So yeah, we just encourage you when you will be thinking about the solution to be drafted to really engage with the taxpayer. We are able to explain and engage with you to explain business models and any information you may need to make informed decision. Thank you.

Thank you very much from that ICC. So I will then give the floor to the chair back.

Thank you, Lisa. I have here the screen request from 866. So if you can identify yourself, please.

Mariana Beraldo from Nova Tax Research Lobby. I think Ataf made a very good point, important point, because if we're gonna have the dispute resolutions rule in the convention, in protocol one and protocol two, do we really need an optional separate protocol? this protocol will have some, some will be efficient. We don't know because we are going to discuss different rules in different documents. I know that it's really, it's, It's really early to discuss this because we don't have the content like Brazil said and other jurisdictions, but it's to think about what's going to be the proposal of Protocol 2. I think it's a really important task to think about before we continue these discussions. Thank you.

Thank you. So, I don't see any more hands from member states or from all multi-stakeholders and I think because of the discussion today was very, not only today, for these three days for workstream two actually was very fruitful and we We learned, and I personally need to admit that I learned a lot from this discussion. You bring our attention to a lot of points that was very necessary for us in drafting. Some of them were already like question marks in our heads, and some of them you bring it here, and we saw it. It was very good for us as we're moving further in this process. So I think today now we reach the end of this session and by this we are getting to the end of the discussions for work stream two, protocol one, taxation of cross-border services. And the next step will be an update in Nairobi that will be followed also with some discussions in February on the solutions So I would like to thank you all and for all of this intervention and very good learning and fruitful discussion. I think everyone deserves a bonus of going back home like 15 minutes earlier than was planned. So I would like to thank you all and tomorrow we're going to start deliberations and discussions for protocol work stream three protocol two dispute prevention and resolution with our two co-leads, Marleen and Michael. So looking forward to see you all tomorrow in the same room at 10:00 AM. Have a good evening. Thank you.