Intergovernmental Negotiating Committee on the United Nations Framework Convention on International Tax Cooperation - First Substantive Session 2025, 3rd meeting
General Assembly
Date: 5 August 2025
Language: English
Transcript: https://transcripts.un.org/en/asset/k19/k1975pegj3
Transcripts available through this tool are created by using automatic speech recognition and are not official records nor official documents of the United Nations. Official records and official documents are available on the Official Document System of the United Nations.

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Chair [0:02]:

Excellencies, distinguished delegates, dear colleagues, the informal meeting is called to order. Today, the committee will continue its deliberation of item four, framework conventions. The framework convention is the foundation for all of our work. Such convention will allow for incremental progress over time because tax is relevant to everything. This framework should be drafted so as to provide the widest possible scope for protocols in the future, including protocols on subjects we cannot even anticipate today. Work on the framework convention is in the capable hands of the co-lead, Daniel Nyeru of Ghana, I will now hand the floor to Daniel to describe the work to date on workstream one. Mr. Daniel, the floor is yours.


Ghana · Co-Lead · Daniel Nyeru [0:57]:

Thank you, Chair. And good morning, excellences and delegates. We'll have a presentation, a quick presentation and go through what we've done so far in terms of the framework convention. and the issues notes that we sent out and the various comments that have come in. So for work stream one, so work stream one, the convention basically looked at, can we go to the next slide please? So just to refresh our memories a bit, the framework convention itself aims to establish what require an inclusive and effective international tax cooperation, have a responsive governance system for ongoing and future tax challenges as the chair has mentioned, and also have an inclusive, fair, transparent, efficient, equitable and effective international tax system that we all expect to support sustainable development and strengthen domestic revenue mobilization. So to break it down a bit further, we are looking at establishing a fully inclusive and effective international tax cooperation in terms of both substance and process. We want to establish a style of governance for international tax cooperation that is capable of responding to current, that is existing, and future tax and tax-related challenges on an ongoing basis, basically should be on a rolling basis. And then finally, to establish an inclusive, fair, transparent, efficient, equitable, and effective international tax system for sustainable development with a view of enhancing legitimacy where everybody accepts that there's a certain level of certainty, there's resilience, and fairness of international tax rules, while we also look at challenges that we have to attend to in order to strengthen domestic resource mobilization. So generally, this is the purpose of the framework convention. Can we move to the next slide, please? Okay, so for work stream one, We prioritized commitments to begin with in the sense that as these are technical provisions that will anchor both the early and future protocols to the framework convention. So we expect that we'll work on the commitments up to the end of 2025. The first set of commitments that were selected, we basically went through all the commitments, but the first set that we selected where effective prevention and resolution of tax disputes, fair allocation of taxing rights, and sustainable development for discussion in this particular session. We issued our issue notes, which are the starting point for the discussions for this session. And the main purpose of this session is basically to gather feedback that will inform the future inter-sessional work. Now over here, I want to make a suggestion that we have a very good, we should have a very good critique of what we've done so far. I mean, it is important for us to have a good understanding of what we are doing and also be able to express it quite well. So we all have the opportunity today to, if I can use a word in Coast, tear what we've done apart, not to destroy it, but to sift it just like an archeologist will sift issues just to learn history, sift it so that we can come out with a document that we will all own and can be proud that we have. Next one, please. So the order in which we set out in the work plan to look at the issues were, we created three basically scenarios, the provisions that were to address early, which were the commitments because it formed the basis for most of the discussions. Then we'll, we'll look, next we'll be to look at provisions that subsist or depend at least or in part on the drafting of the commitments. And so, um, some people have mentioned the conference of parties, the secretariat definitions, data collection and analysis, exchange of information for implementation of the convention, the review and verification, subsidiary bodies, capacity building and technical assistance. Now we have a third category of provisions that are not subject matter dependent and basically we can draft them at any time. These are amendments to the convention which we can look at, adoption of protocols, any formal matters, depositing, entry into force, ratification, et cetera, and financial resources. So this is the way we plan to look at the committee. Can we go on please? So we'll move now into the commitments themselves and what we came up with the issue notes. Again, as we said, we are still open to it. So what we noticed, the first one is prioritization prevention and resolution of tax disputes. What we observed then from the statements that came out, we have a summary of what came out. is that tax litigation is costly and very time consuming. And if they are fair and effective alternative mechanisms, they enhance legal certainty, they reduce burdens on both the authorities and the taxpayer, and they support efficient tax administration and revenue mobilization. The other item that came out was that cross-border tax disputes are complex and can be very slow to resolve, leaving double taxation risks and also the time value of money actually for both parties. We also noted that developing countries face a debt challenges due to limited treaty networks, which highlighted the need for stronger dispute prevention mechanisms. And the asymmetry of information between the TSB and tax authorities continues to be an issue, especially for developing countries. So these are some of the things. Can go on, please. So that's what came out. Now, there's one other thing we need to take note of, that in the TOR, there is several mentions of dispute resolution. And you'll find them in three places, in the commitments, in the bucket of other elements, and then as a protocol. So there is the need to align these three items so that there are no overlaps and there are no conflicts with them. So this is part of what the discussions are on the part of discussions we've had so far and we need to continue to have. Next slide, please. So for this resolution and then prevention, what were the general idea that came out of the discussions that we had? One was that there will be the need for a statement that recognized the importance of legal certainty to cross-border trade and investment and the ultimate goal of improving domestic resource mobilization. So in that sense, dispute prevention and resolution should at the end of the day help domestic revenue mobilization. And then basically there will be expected that there'll be an undertaking to establish dispute prevention and resolution mechanisms that are fair, that are independent, that are accessible, and effective in resolving disputes. And it becomes a bit more important when we are looking at this because one of the things that actually came out, that prevention basically will be preferred to dispute resolution. Disputes could, but as much as possible, prevent them. And then when also resolving them, it should be timely for both the taxpayers and the tax authorities. Next slide, please. Now, for us as a committee, these are some of the things we expect that we'll discuss today. We've made comments on them already. We have room for further comments in that discussion. Now, the first question is whether the elements of the commitments from the previous slide effectively address the concerns that are expressed in the work stream, for those of us who were in the work stream, expressed in the work stream, those of us who are not there who might have looked at the issues noted later, we also have this question to answer. Also, whether the elements of the commitment from the previous slide provides enough support for the LA protocol, whether there are other things we need to look at in getting that done. Then whether there are any additional concerns regarding effective prevention and resolution of tasks that should be addressed in that particular article in the framework convention. So these are the three basic questions that we'll be looking at when we come to discussions. Let us know that there might be other questions that will arise. as and when they come up, we'll look at them. So as we sift through. The next slide, please. The next one is the fair allocation of tax and rights. Now, some of the things that we looked at, and because we have one protocol already, what should a commitment really look like? what should be provided in the framework convention to anchor that. We have a first protocol already, which is on services. And so where are we looking, what are we looking at in terms of that? Next slide, please. Now, some of the discussions again that came out was the aspects of fairness and what is important to member states. One was that it was important for supporting domestic resource mobilization. And also restoring taxing rights that are eroded by evolving business models. We all agree that taxation is very, very dynamic because business itself is dynamic. So how do we ensure that these right taxing rights are accorded each state as business models evolve? The next one was that we should ensure that all jurisdictions where business occurs share taxing rights. The question that really remained was, what is it about the economic rights basis for allocating such rights? How really do we allocate those rights? The proposed criteria also should emphasize economic substance, value creation, and while at the same time, we look at what would the impact be on trade, what would be on investment, will it be efficient, how neutral it will be, and how simple we can make it. Additionally, we've talked about the future, which is very important because things keep evolving. The rules that should come out should be future proof and should be adaptable to evolving business models. It was to a certain extent discussed that fairness is a very subjective thing, defining it can be an issue. But as the elements for the framework convention emerge, we expect that we'll come to an understanding of what we all mean by fairness and the protocols that we need to address fairness. Next slide, please. So what are we looking at? What do we expect to come out of this? We want to come out with a commitment that will promote and prepare all jurisdictions where business activities please share tax and rights over related income and at the same time balance it with the principles of economic efficiency, tax neutrality, simplicity, and the effects on cross-border trade and investment. So these are things we need to look at. If we go to the next slide. So the questions that we raise here is whether the elements of the commitment from which we've talked about from the previous slides provide a useful outline of a commitment on this topic, whether the additional concerns regarding the fair allocation of taxing rights that should be addressed in that article of the convention. Next slide, please. We also looked at sustainable development. Now, in looking at sustainable development, we actually just drew from the language in the TR, which we had a discussion, it seemed was adequate because we wouldn't want to go too far, too much into it. But then the Basically, we looked at paragraph C of paragraph 10, sub paragraph C of paragraph 10 of the TOR. And what we have here is some framing that says that taking into account the different capacities, the state parties agreed to pursue international task cooperation approaches that will contribute to the achievement of sustainable development in these three dimensions, economic, social, environmental, in a balanced and integrated manner. And there was assumed a commitment in this form could serve as an anchor for future protocols when it comes to discussing these. Next slide, please. So when it comes to sustainable development, what we want to discuss is whether there are additional aspects of international tax cooperation that could contribute to the sustainable development that we should add to the paragraph that we already have and how we should frame it in that sense. So next slide, please. Right. Before I go to next steps, I think there's some clarity we need to give. During our discussions, we looked at the commitments as we're in the TOR and agreed that we would look at those commitments first. It came up that way, the word entirely was used in terms of reference, which indicated that there could be additional commitments. But we started what's in the TOR. Subsequently, if there's a need to look at other commitments, I think some people have made comments on that already, we could look at those additional commitments. But to begin with, that's what we're going to do. So next steps, please. The next slide. So For the next set of commitments, we went through all the commitments in paragraph 10. We settled on the first three. The rest of them will work on and prepare the issues papers on them, which were presented at the meeting in November. And so, as we mentioned, additional commitments could be considered subject to us completing our schedule on time. And so that's If we can have the next slide. We will move to our discussion. I'll hand over to the chairman. We'll pick the items one by one as they were in the slides and have those discussions. This was just a run through to give us an idea of what would happen. Thank you.


Chair [17:46]:

Thank you, Daniel, for this presentation. And now we are going to open the floor for discussions. And first of all, we would like to take if there is any general points or questions that need to be raised. Then after that, we will start with focusing on the first commitment, which is effective dispute prevention and resolution. But first, we will be taking if there is any general questions or inquiries about this. But before we start also, I would like to bring the attention of everyone that in this phase we are concerned with identifying the issues. The next phase, the next stage will be more about providing solutions. So the most important outcome that we should get from this plenary session is to identify the key issues in a correct way and because this will enable the following stage to work on the solution which really work to solve these issues. So now we are working and brainstorming and discussing to ensure that we are able to really identify the issues in a correct way and make sure that we are standing on what really we need to work on in the next stage more than discussing solutions. The next stage, the work streams will come back with solutions in which we will start to discuss as well. But the base for this is to really understand what is the issues that we need to work on. So this is just for clarification, so to make sure that our discussion and our dialogue is focused in the right direction and we are all pushing in the same direction. So now I'm opening the floor if there is any general or any high level comments before we go commitment by commitment. The floor is open. Distinguished delegate of Singapore.


Singapore · Delegate [20:05]:

Thank you, Chair. At the outset, let me first thank you, the co-lead of workstream one and the secretariat for facilitating the workstreams meetings and preparing the issues note and for this presentation on the possible elements of the framework convention. So my remarks would be quite high level, a few comments on the general approach to work stream one and then some specific elements we would like to touch on. I think through the discussions and the statements yesterday, it's quite clear that we share a desire to develop a framework convention and protocols that would be truly inclusive and beneficial to member states. And as we commence our discussions on this work stream, we would like to suggest a few points to guide our discussions. First, Singapore believes in developing a framework convention that would receive broad support as provided for in resolution 79/235, and as we've heard from an overwhelming majority so far, uh, we believe that the commitments in the framework convention should be broad. We agree with this and that the details of how these commitments should be operationalized can be articulated in the protocols, which we've also heard many member states similarly call for. And we think that this would enable us to future proof the framework convention so that member states with specific policy concerns would still have the latitude to endorse the framework convention and take broad guidance from its commitments to address specific interests in the future. Second, Singapore strongly believes that the objective of the framework convention and the commitments contained therein should support economic growth and domestic resource mobilization, and therefore we agree with what the co-lead has just presented to us this morning. The framework convention should facilitate a stable, coherent, clear, and predictable international tax system that will provide certainty for businesses and grow the economic pie. This would increase resources for all member states. Third, the framework convention and its protocols, we believe, need to complement and cohere with existing international standards and practices and where possible, avoid duplication. And this is necessary to avoid overlapping or fragmented rules, which could lead to increased uncertainty and disputes, double or over taxation that could potentially hinder cross-border trade and investment. And fourth, I think as also we have heard yesterday, the sovereign right of all member states to decide their own tax policies and practices based on their needs and circumstances is paramount and should be respected. We should have the flexibility to fulfill the commitments under the framework convention in a manner of our choosing, including through the negotiation of bilateral treaties, participation in existing mechanisms, all through the adherence to this framework convention and its protocols. With regard specifically to the presentation that was just made on the effective prevention and resolution of tax disputes, as mentioned by our lead for this workstream, we certainly and wholeheartedly concur that this is necessary to provide greater tax certainty, which leads to greater legal certainty, both of which are crucial for trade and investment facilitation and efficiency of tax administration. But beyond the commitment and the protocol, however, Singapore also believes that the framework convention should address the settlement of disputes arising from the interpretation or application of the framework convention and its protocols, which is similar to what we have seen in other UN conventions. And we believe that this could take the form of a broad commitment for state parties to settle such disputes through negotiation or any other peaceful means of their choice. And maybe this could also be part of our discussion today. Singapore is committed to playing a constructive role in this process, and we look forward to working with all delegations towards a draft framework convention that would be acceptable to all member states. Thank you very much, Chair.


Chair [23:54]:

Thank you. The senior delegate of Iran.


Iran (Islamic Republic of) · Delegate [24:09]:

Thank you, Chair, and many thanks for the presentation. I have a question. And then we are talking about international cooperation. So the level of the discussion here should be focused on enabling international environment. So my question mainly focusing that enabling international environment is a prerequisite for such a kind of important process. So, and then I appreciate that the presenters, uh, then telling us that, that how we can proceed with the, uh, inter- whenever, I didn't see any international environment, uh, uh, uh, uh, uh, uh, uh, uh, enabling international environment because as I emphasized, that's a prerequisite because we are not talking about the bilateral issues or trilateral issues. We are talking about the multilateral cooperation. And that is my first question. The second one is about the leadership of the UN. And then where is the leadership of the UN and then the main role of the United Nations and its specialized agencies here? And then my last point is the focus of the process, as my colleague from Singapore mentioned, the focus of such an important process should be on development oriented as the developing countries is the victims of such a kind of process. And then for a healthy process in the world, we need such a kind of the focuses that be equal and then giving this opportunity for developing countries that have a right to proceed in this process. Thank you.


Chair [25:47]:

Thank you. The delegate of the United Kingdom.


United Kingdom of Great Britain and Northern Ireland · Delegate [25:54]:

Thank you, Chair, and thank you to the co-lead for the presentation. It's, I guess, obviously a new presentation, and I've not been able to compare it to what was in the issues note, so it would be helpful, I think, if you could set out what the main differences are between what's in the presentation and what's in the issues note so that we can work out whether there's anything we need to add on top of what was in our written comments.


Chair [26:39]:

Thank you. So as I see no more requests for the floor at this point, okay, so distinguished delegate of France.


France · Delegate [28:30]:

Thank you, Chairman. Thank you for this giving us the floor and the reminder of what we were able to discuss during workstream one. I just had a few points that I wanted to raise. Firstly, I wanted to say that I fully concur with the fact that we should have high level commitments because it's important for this framework convention to bring together the greatest number of parties and also covers what is operational, that should be featured in the protocols. I'd also like to stress the fact that we should make it clear that this framework convention is there to support networks or links between jurisdictions that might not have bilateral conventions between each other. it's important to ensure that we as a priority ensure the implementation and the enforcement of any bilateral conventions that were previously agreed between states that are here. Third and last point on this framework convention, I think it's important to try in as much as possible to avoid any legal uncertainty or tax avoidance. For instance, I would be pleased to see more understanding between the relationship between the different protocols and the framework convention, but also the issue of optionality and the level of the optionality of the protocols. I think that this is an important principle so that once again we can ensure that this process brings together as many of us as possible. I would also insist on the need to avoid any duplication or overlap with existing instruments that we already have at our disposal. If they are not taken into account, this would lead to considerable overlaps in taxation systems. I fully understand the models of taxation systems that we already have at the UN, the OECD and the work that has been done on pillars one and two at the OECD. and also within the OECD, the multilateral convention to improve our international conventions. Thank you very much.


Chair [31:38]:

Thank you. The sanctions delegate of Austria.


Austria · Delegate [31:45]:

Thank you, Chair, for giving me the floor and thank you to our co-lead for guiding us through the presentation. I don't want to repeat our written comments on workstream one and the framework convention, but listening to the presentation and the elements you put there in terms of what the agenda of the next couple of months are going to be, I was wondering if I just missed it or if we are not going to discuss objectives and principles of the framework convention, because in my understanding these are very important in terms of also framing our commitments and they're supposed to be the basis for any type of commitment that we're gonna put into the framework convention and I don't have the slides in front of me but there was this one slide where you listed all the different blocks that we're gonna put into the framework convention and when we're gonna discuss it and I think I did not see any provisions on the objectives and principles so it would be helpful to clarify when we when we will discuss this and in my opinion it would be better to discuss it earlier together with the commitments that are already being discussed in workstream one. Thank you.


Chair [33:03]:

Thank you. So as there is no more request for the floor, until we get another request, maybe I will go to answer some of the questions, me and Daniel. So maybe I will take the question from the UK first. What's the difference between the presentation and the issue notes? Actually, the presentation is targeted to give a brief about the work stream, how the discussions went, which is maybe a little bit you will not find in the issue notes. So it's giving you the atmosphere how we discussed and how we looked at this matter. And after that, in the presentation, we are summarizing in a very high level the issues because we saw it's not proper that we just list all what we have in the issue notes to be in a presentation. It would be 100 pages and we keep just having running slides. So the issue notes are in the hands of everyone. And here we are trying to summarize, again, highlighting the questions, which also was part of the issue notes. which are the main driver of discussions here that we have at the end of the issue notes and you have, we, we just, it was in the display here. If, if you can, Kitty, go to the last slide for, in the questions, it's part of the issue notes. So this is a summary of what we are, what should drive our discussion or what the work stream, so that's important to, to drive the discussions here. So this is, this is the main difference. So part of it, again, giving what was the atmosphere, what was driving discussions, how it was happening, how we looked at the different provisions of the convention, the commitment and its relation and how we reach here where we are in the issue notes, more than to be repeating the issue notes. So this is, I think, if this answers the question, so this is the difference. to our colleague from Iran when we are talking about enabling the international landscape and the UN entities and this point is the point that he raised. I think this is enabling the international, that's why we are here, I think. Maybe I'm not gonna elaborate more about it, but this is enabling the international side of everything. And for the role of the UN entities, I think this will be coming. And that's what was in the presentation of Daniel. Just if we go back, Katie, in slide number four. Yeah, you will find here the Conference Party and Secretariat, the data collection, and all of this. That's what should be coming next in which we're going to work and see what can be the role of the Secretariat and if we can have also rules of sort of support or whatever for the UN entities. So this will come for to be discussed under these provisions. So it's coming up while we are moving in our discussions and moving forward. For Austria, If I got your question right, I think yes, maybe we can have a provision of objectives and principles, but your question was mainly about when we're gonna discuss it, but I think we already discussed it. We spent like more than six months discussing objectives and principles in the TOR. So already we have objectives, and because in the TOR, if you're gonna look at the section of the objectives, so what these objectives are for, for the TOR itself, I don't think that we need to have objectives for the TOR. The objectives are for the convention and it's very clear in the TOR and the principles that we have is not the principles of the TOR. The TOR is just a phase. So this is the principles that should guide the convention and this is already very clear in the TOR. So already we discussed it, we reached there, we have objectives, we have principles. But what I'm saying right now, it doesn't mean that it will not be discussed anymore. But I think now we are moving and discussing the core the core of the convention, which is the commitment. And as we move on, if any new principles, objectives just came up and we need to discuss it and to add it, it's still possible and we can do this. But at least now we have what we can say like a good level of objectives and principles that are already in place in the TOR. Like from my personal perspective, I believe that this was the drafting of the convention started since the TOR by having listing objectives and the principles there. But again, I'm repeating again that it is not like it ends that we will not talk about it. Still, as we move forward, if we found out that we need to add to it, as we are going deeply in the substantive work, we need to add to it. anything in the objectives or in the principles, still we can do this and go and work on it again. So hopefully I was able to clarify these points and just remind you that the floor is still opened before we move to the first commitment. Thank you. Distinguished delegate of Canada.


Canada · Delegate [38:43]:

Thank you, Mr. Chair, and thank you also to the lead and to the secretariat for the work that's been done on Workstream 1. I just wanted to follow up on the last point made by the Chair in response to the question from the distinguished delegate from Austria. Is my understanding correct? Well, sorry, I won't state. I'm not sure what my understanding is. I understand that there are objectives and principles that are included in the terms of reference that we are using to guide our discussions on the negotiation of the framework convention. What is unclear to me is will the framework convention itself have a statement of objectives and principles, and if it will include a statement of objectives and principles, is it the view of the chair that we would effectively have a cut and paste of the objectives and principles from the terms of reference, or is it the view that the objectives and the principles guide us in the negotiation and will guide the framing of the commitments and are therefore unnecessary to be repeated in the convention itself? So just so that there's some clarity there, because then I think it is a relevant question as to when we will discuss the formulation of objectives and principles if they are to be included in the convention. Thank you.


Chair [40:26]:

Okay, again, so I will answer our colleague from Canada as we don't have any more requests for the floor at this point. And maybe it would be good to go to the terms of reference directly and read what's already there. Because at the end of the day it's not the perspective of the chair, it is the perspective of the member states. The chair is just to moderate and to coordinate. So if we're going to go for the section in the TOR, I'm reading now from the TOR, which is the principles, you'll find that in paragraph eight, a United Nations framework convention on international tax cooperation should include a clear statement of principles that guide the achievement of its objective. So in the TOR it's listed that the convention should include a clear statement of principles. Which answers the question, I think, that yes, we're going to have a statement of principles and the same, I think, also because it's the same for the objectives, the United Nations framework convention of tax cooperation, whatever, should include a clear statement of its objectives. So that's what we have in paragraph seven and what we have in paragraph eight, stating that the objectives and the principles should be in the convention and should have a clear statement. in the convention. So hopefully this answers the questions that we have. And again, it is a member states. We are discussing. We can add. We can amend. So if we found anything which is missing, still we can do it. This is the nature of our work that we keep revising even after we finish the convention and it's enforced and it's working. We keep revising. That's what we see in all the forums and what we see even in our domestic work. Nothing is perfect from the first time and you keep all the time revising and changing depending on the change in the economic circumstances and the social things. So there is some dynamics which guide as we go forward. So this is the principles, this is the objectives that will be in the convention, but still we can add to it if this help. Thank you. So it looks like there is no more request for the floor, so I think by this we can move to this. Oh, no, we have Belgium. Distinguished delegate of Belgium, please.


Belgium · Delegate [43:04]:

Yeah, I had a small question. Will there also be an article in the framework convention around the protection of sovereignty, since that is done in other framework conventions of the UN, because that's not clear to me yet. Just an additional question.


Chair [43:32]:

Thank you. I think this is already in the principles. I can get it for you. I think it's one of the principles. It's nine, paragraph nine, item B, recognize that every member state has a sovereign right to decide its tax policies and practices while also respecting the sovereignty of other member states in such matter. So really we have a statement as part of the principles in this regard. Distinguished delegate of Saudi Arabia.


Saudi Arabia · Delegate · Yousri Ghattaoui [44:25]:

Good morning and thank you, Chair. And sorry for being maybe slow in understanding here and maybe add up to the pile of questions that you have already received, but it seems the jet lag bugs me down. But the question is as follows. Today we have a protocol for dispute resolution. This is one. And then we will have commitment to be addressed in the framework convention on dispute resolution. And then are we going to have another, let's say, provisions for dispute resolution for the convention itself within the convention? Or we are talking about only reference to be made on the commitment in the framework convention? for fair and dispute resolution and in the protocol two. Because this will take me to another questions also, what about protocol one, sorry, protocol two, where are we going to have also dispute resolution specific for that protocol? Because now the scope is a bit confusing honestly for me. If you are talking about that, the protocol on dispute resolution will cover dispute that is arising from treaties that are in place today and also dispute that might arise in the absence of the treaty. So that's that cover things outside the protocol cover things that outside the convention itself. And then we'll have separate dispute resolution in the convention that provide basis for dispute that might arise from the convention itself and from protocol two. Is this understanding or mixing things here? Thank you.


Ghana · Co-Lead · Daniel Nyeru [46:33]:

Okay, thank you. If we look at the terms of reference, and basically, yeah, it's up there, you realize that there are three references to dispute resolution in it. The first reference we have in the commitments, where we talk about prevention and resolution of disputes. If we go to paragraph 12, other elements of the TOR, realize that there is a reference to a dispute resolution mechanism over there. And then as part of the protocols, we choose prevention and resolution as a protocol based on the commitment. As we've mentioned earlier, in the commitment, we'll be looking at the basis of foundation for the protocol itself. The third one which we have, which is in paragraph 12, now looks at the... Okay, which looks at which is in paragraph 12, now looks at other mechanisms we are putting because as I think you mentioned, and this one is still part of the discussion that is ongoing from members. What I remember from part of the discussions was that, is that could look at some of the things you've mentioned, which is where We need to get further clarity on that, but we need to discuss. But then there will be need for some mechanism to resolve disputes aside of the protocol, aside of the commitment. As we mentioned, is what we are still discussing. We are looking at the extent that the commitment should go. Then we are looking at the extent to which the protocol itself should go. And then we are also looking at what other mechanisms we are putting in to prevent disputes as part of the framework itself. So in short, that's what we have. Those are things that we still have to discuss and finalize, which we haven't done yet. Thank you.


Chair [49:09]:

Thank you, Daniel. Distinguished Deputy Director General, Tonia.


Estonia · Deputy Director General [49:17]:

Thank you, Chair. I'm also a bit slow, but going back to the question of my colleague from Austria and Canada regarding the principles, I've quickly reviewed the TOR and yes, we do have a separate paragraph on the principles, but I would say that these are rather broad to provide any more specific guidance as to the taxation. And if we are going to this, to discuss the equitable taxation of the MNEs and also it's quite important in the context of workstream two to have a bit more specific principles that are more related to taxation as such and I'll give you an example of what I'm thinking about here. For example, we have in our constitutions the principles of, for example, the ability to pay and prohibition of the retroactive application of the tax rules and something along these lines. And I don't know what my colleague from Austria was thinking more specifically, but from my perspective, if we are talking about the principles that are directly linked to taxation, implementing the tax rules and collecting the tax, then I would like to see something more specific that we would base our work on. And I haven't participated in workstream one, so I'm not sure whether anything like this was discussed there, but perhaps we could at some point of time. Thank you.


Chair [51:16]:

Thank you. Thank you, Dr. India.


India · Delegate [51:21]:

I just want to make some comments on this debate that has come up now about whether the objectives and principles needs any further elaboration. Now, if you look at the terms of reference, it very clearly says both in the objective section and in the principle section that the framework should include a clear statement of its objectives. It also says that it should be a clear statement of the principles. I think that what we have included in the terms of reference is clear. Any further elaboration may actually may distort that clarity which we have given in the principles section and the objective section. When we've been having this discussion about commitments, I mean, all around the table we've been saying that we have to have this balance between having a very high level commitment or making too much of an elaboration. So I believe that even when the framework convention contains a section on the principles and the objectives, it should not stray away from what has already been included in the terms of reference because that is what provides clarity. It is the commitment which may require some level of elaboration because that will guide how we will work on our protocols. But I think the manner in which the objectives and principles have already been drafted, I think that is enough and fair.


Chair [52:49]:

Thank you. Um, thank you very ch….


Nigeria · Delegate [52:57]:

Thank you very much. I think my comment is in line with what a delegate from India just spoke about. We already have the objectives of the framework and the principles that will guide the negotiation and of course the clear statement in the TOR requiring that such statement be included in framework itself serves How be it if there be any thinking of any additional objective or principle, I think delegates could bring them up for discussion. But in my view, we shouldn't try to reinvent the wheel if we had done a very good job in the other committee to draft objectives and principles which had also been sanctioned by the General Assembly. I think we should just move ahead so that we are able to accomplish our agenda for this session. Thank you.


Chair [54:20]:

Thank you. The distinguished delegate of Jamaica, followed by African Union, followed by Saudi Arabia.


Jamaica · Delegate [54:35]:

Yes, thank you. Thank you very much, Chair. My comment is really to congratulate Ghana, to congratulate Daniel and the secretariat and yourself on bringing the work this far. I know you refer to him as co-lead, but he has really been working solo in terms of his leadership on this, what is at the center of the work that we are doing here, which is the development of the framework convention, and I know that he has received assistance as well from Atesha. Chair, I think when we last met, the consensus, and I use that word in its broadest sense, was that the work streams would be led by both developing and developed countries. And I think the overall objective of that was that the co-leads would bring to their leadership of the workstream the varying perspectives which otherwise you might not be familiar with, whether from a developing country seeing the developed country perspective and vice versa. It is unfortunate that that is not how it has worked out for work stream one and for work stream two. And I hope, I don't think it's, I can't speak for you, Chair, and for Daniel, I hope that at some point that situation will be rectified. I think the work could be enhanced, the discussions could be enhanced by having that kind of partnership. And so those are my comments, Chair. Speaking from work stream three, we can testify that it has worked out very well for us there, and we recommend that partnership heartily. Right, Michael?


Chair [56:55]:

Thank you for this. Now Saudi Arabia, but I think Saudi Arabia, we We are going to move to discuss the first commitment which is effective dispute resolution prevention. Now more we are in the level of the general comments about the convention. So we are welcoming your question if it's on the same point, of course, but like now I think later on we are going to move to be on this topic. So but still the floor is yours to get your comments.


Saudi Arabia · Delegate · Yousri Ghattaoui [57:28]:

Thank you so much, Chair, and sorry for coming back again, but maybe a comment on the principle and objectives. And I think what we have in the term of reference are well articulated, and I think these things will be used in our work to guide our work and to help us to establish a work that is principle-based. So I don't think further elaborations is needed in the convention. Thank you.


Chair [58:03]:

Distinguished delegate of Kenya.


Kenya · Delegate [58:08]:

Thank you, Chair. I think my comment will, will, is more relevant here because it just came up on the floor today as a general comment and I think it also came up in yesterday's general statements. And it's this call for the framework convention or its commitments to be in line or aligned with the existing frameworks or existing policies. And that continues to remain an issue for us because we believe that calling for complementarity is basically calling for status quo to remain. And I think we are here to challenge the status quo. I think the entire reason we're here, the reasons we've been given in the workstream is that the status quo has been very unfair for developing countries and the allocation of taxing rates and our ability to meet our development goals because of this unfair allocation of taxing rates. So in our view, we are not here to simply replicate whatever is existing because it is already unfair and we have repeatedly said that whatever is existing is not inclusive. and resolution 78 to 30 clearly stated that uh developing this framework convention is needed in order to strengthen International tax Corporation and make it fully inclusive so if the existing policies are not inclusive and we are here to make them inclusive then automatically that's going to call for change so we just want to say that we don't agree with the calls for complementarity or aligning with existing standards obligations because we are here to correct um whatever is existing. Thank you, Chair.


Chair [59:53]:

Thank you. I see no further requests from Member States. So now I'm going to give the floor to the African Union.


AU [1:00:05]:

Please go ahead. Thank you very much, Mr. Chair. And at the onset, I would like to sincerely appreciate the presentation that was made by the co-leads and excellent work that was done. We would like to align our position with Nigeria, India and the just concluded words from Kenya to underline the fact that, Mr. Chair, the terms of reference in our perspectives were enough and broad enough to lay the ground for our direction in terms of what we are doing in the drafting of the Framework Convention and this applies to the issue relating to the principle and to the objectives and to the key elements that should be incorporated in the Framework Convention. And in this perspective, we believe that all additional, you know, suggestion that may be brought should be not conflicting with what is already adopted by the UN General Assembly in the terms of reference to make sure that we keep consistency and that we move in the same direction. Now in terms of the issues of complementarity as was highlighted by Kenya and I think it has been so eloquently said, for us we do believe that we are here to reconstruct or to rebuild or to design an inclusive international tax cooperation as was called upon by all the member states in this room. And in that perspective, we do believe that it is important that our work be to change the narrative of international tax cooperation to make sure that we are able to provide an opportunity to all the countries, not only developing economies, to raise domestic resources and to finance their development needs. And in that perspective, our support to the work that is being done is fully in line with the principles and the direction that we have outlined in the terms of reference that we adopted. Thank you very much.


Chair [1:02:26]:

Thank you. International Chamber of Commerce representative, please go ahead.


ICC [1:02:35]:

Thank you, Mr. Chairman.

A question or comments in relation to the discussion we just had on principles and objectives of the framework. I know that there was discussion and consideration of taxpayer rights in the discussions that have been held to date.

But I don't see these as being enshrined in the objectives and principles of the framework convention. This is a fairly standard and common practice in most conventions and.

We would like to see those taxpayer rights and obligations enshrined in those principles and objectives if there's to be no further debate or discussion about how that's taken forward.

Thank you, Mr. Chair.


Chair [1:03:22]:

Thank you. Distinguished representative of ATAF.


ATAF [1:03:28]:

Thank you very much, Chair. Good morning, distinguished delegates. The African Tax Administration Forum would like to align itself with the comments in support of India, Nigeria, Kenya, African Union, and others. On the issue of complementarity, we fully agree with the statement by the distinguished delegate from Kenya. and that the role of our meeting here is to ensure that the international tax system can deliver to all countries, both developing and developed, a tangible and workable solution on international tax cooperation. And on that note, we look forward to further discussions and elaborating the protocols as requested. Thank you.


Chair [1:04:19]:

Thank you.


Switzerland · Delegate [1:04:23]:

Good morning, thank you, Chair, many thanks to the co-lead for the presentation and also for the elaboration of the issues note, which was, I believe, a very accurate summary of the discussions held in the work stream one. With respect to the question raised by the distinguished colleague from the UK this morning regarding the differences between the issues note and the presentation, I spotted the difference and this concerns the undertaking to create mechanisms for dispute resolution. While in the issues note this was presented as an option for commitment, I understood from the presentation we saw that This is not an option but it is a necessary part of the commitments. And I think this is a very good development. We are happy with such a commitment and we would be even more happier if you could confirm that my understanding is right that such a commitment should be certainly be drafted. And I also would like to explain why I believe this is important. It is because it is the core for an operational change to the system of dispute resolution. The other commitment in that regard being a statement of the importance of dispute prevention and resolution is basically a statement that does not necessarily imply a legal change to the current system. So we believe it would be essential to have such commitment in the convention and would be glad if you could confirm my understanding. Thank you.


Chair [1:08:40]:

Of Algeria.


Algeria · Delegate [1:08:48]:

At the outset, we endorse the statement delivered by India and Nigeria, Kenya as well. So two points we wanted to speak about. They concern the principles and the goals that were clearly established. For us, we'd like to refer to what was already found in the terms of reference, which was negotiated on last year. For us, it's clear, that's clear and sufficient. As for complementarity, We think the question of complementarity could reduce the scope of application of the framework convention. Why? Because the current system is a preestablished system, but which not everyone adheres to, and there are clear disparities in some of its conditions. So the fact of establishing complementarity could reduce the scope of application of the convention. This would be good. We're here to revise the current architecture of the tax system. What's good, we need to maintain it, and what isn't good and what doesn't fairly and equitably reflect the interests of all states, that can be called into question. So we need to work to ensure complementarity, and that would reduce the scope of the framework convention. Thank you.


Chair [1:10:24]:

Thank you. Distinguished delegate of China.


China · Delegate [1:10:32]:

And thank you, Daniel, for the presentation. And also many thanks to the colleagues who made.

Previous interventions, which helps me have a better understanding of the relationship between the commitments in framework.

Convention and that of in the TOR and also the relations with relevant protocol, I mean.

The approach we are now discussing when we are stipulating the commitments, that where does.

It come from and where does it go? I think we may agree that the origins from the TOR and should be high level enough or inclusive enough to cover and entail the outcome of.

Protocol 2.

So in this sense, we will support the current languages regarding the commitment. And we believe this kind of approach or mindset of high level making should be upheld for the discussions for the other commitments, thank you.


Chair [1:13:20]:

Okay, so we don't have more questions, so I will answer some of the questions that we got right now. And I think we were talking about the principles again and again and different points of views. I'm sorry that I'm going to repeat a little bit myself, but to make it clear, I think it's very important to make sure that we are progressing all the time. and we are not stuck at a certain stage or certain point and no progress is being made. So, like, again, still member states can decide whatever they want. And, but it was not to be proper that if we start this committee by discussing objectives and the principles again and we spend like six months or one year and no progress. So, as already we achieved something good and the good and solid ground for principles and objectives that was very necessary to move forward because anything that we would like to add or enhance in the objectives or in the principles, you will not be able to identify it or understand it unless you go through the core of the convention itself and work it out and then you find what you need to add. Like for our colleague from Estonia when you mentioned like the ability to pay in the constitutions, Okay, on what basis we're going to add it? This may come up while we are discussing the commitment itself, and then we find that one of the commitments, while we are operating any of the commitments, like taxing rights, fair allocation, whatever, that, okay, we need to have to back up this commitment with additional principles, so it can be like ability to pay, then we put it there. We will not be able to understand what we would need to add to the principles unless we do the core thing itself, the core subject of the convention, then it will come up. So we saw it as it would be proper to go through the commitments and still I think member states can decide whatever they want, but at least we have a good and solid ground that we kept for six months discussing. So we moved forward on this. So I think here we are responding to both sides. we are saying what we have is enough. Yes, it's enough and we should move forward. And what we have, if we found out through our substantive work that we need to add it, we can add to it. So hopefully this answer both sides questions in this area. Okay, so now if you allow me, I'm getting back to Switzerland, please, can you come back in your question because it looks like three of us like have different understanding for your question. So if you can come back on it so we can be able, we are more able to answer it.


Switzerland · Delegate [1:16:41]:

Thank you for getting back to me and my excuses for being not clear. When I read the issues note, I understood that what we see now on the slide of the presentation, the first bullet point will for sure be part of a commitment. And the second one, which I believe is even more important because the first one is simply a declaration of the importance of something we probably all share, the second one was presented as an optional commitment. And, uh, my question relates to the relationship between those two parts of a commitment. And I understood from the presentation that now they are on the same level and they should equally be addressed in our, uh, future work. Thank, thank you.


Ghana · Co-Lead · Daniel Nyeru [1:18:06]:

Thank you. If we look at the preamble to the both statements, it talks about possible elements. As we mentioned earlier, your suggestion is very welcome. I mean, it gives us a certain level of certainty that you want to bring in. But as we said, we are still discussing. So it's a possible item that we can have in it. in the distance. Basically, that's where I'll stop. That's possible. It's still an optionality as everything there is, but it's a suggestion that we should do. So I will leave it at that. It's a suggestion. It's not cast in stone yet.


Chair [1:19:04]:

So I see no more requests for the floor. So I think it's time now to move to the first commitment. I'm not sure if anyone would like to take like 10 minutes break or we go for the first commitment. Okay, so we can go for a break for 10 minutes. So we'll be back after 10 minutes. When it's, uh, 10 to 12, okay, two minutes break, thank you.


Speaker 48 [1:20:34]:

Play the trailer of the movie, The Kapil Sharma Show.

Play all songs of the Bigg Boss Kannada.

Today.

Play the trailer of the movie, The Kapil Sharma Show.

Yeah.

It's a body.

In your capacity.

Thank you, Mr. President.

I would like to thank the rapporteur for her excellent report.

Play all songs of the Great Indian Dysfunctional Family.

So they understand why. Okay.

Thank you.


Chair [1:44:54]:

Welcome back everyone. So now we are back to continue our discussion for work stream one on the framework convention. We finished listening to the general comments and interventions on the convention. And now we're going to move to just maybe it would be good to remind everyone that we have commitments on effective prevention and the resolution of tax disputes, fair allocation of taxing rights and sustainable development. So now we're going to take it one by one. So we'll start with the first one, which is effective prevention Uh, and resolution of tax disputes. So, uh, now we are opening the floor. If anyone would like to come on, uh, on, on this topic. So now in the screen you can see the questions that came out of the work stream one as part of the issue notes. So I think this can help in the discussions to have these questions in front of us so we are able to reach an answer or a feedback on each of them because this is what will guide the work of the work streams. from here to the Nairobi session in November. The distinguished delegate of India.


India · Delegate [1:47:03]:

Thank you, Chair. I will try to tailor my comments to answer the three questions, maybe not in the same order. Now, my first comment is something connected or something similar to what the distinguished delegate from Switzerland was mentioning. Now, I am looking at paragraph nine of the issues note and the way the paragraph is drafted, the context that I mean, I would like to preface my comments by saying that this is a commitment related to effective prevention and resolution of tax disputes. Now, this is what the commitment is going to do. So, therefore, the The focus of the commitment should be on undertaking to include, to have an undertaking to establish dispute prevention and resolution. Now, the way the paragraph is reading, it appears as if the primary objective is to promote legal certainty and cross-border trade and investment. That is fine, but that is not the primary objective. That is what we will get out of it. So whenever we get down to the business of drafting this commitment, we believe that it should lead by saying that the parties to the convention undertake to establish dispute prevention and resolution mechanisms that are independent, fair, accessible and effective. And the question of legal certainty and promoting cross-border trade and investment, that follows. So I think that is one point that we would like to make. The other related point is here that there are references to cross border trade and investment. Now we would be slightly more comfortable if there was the phrase economic cooperation could be used over here. So that is a second point. Now my next comment is connected to something that the distinguished delegate from Saudi Arabia had brought up. The way we see it, there are two types of disputes. One are disputes that are between tax administrations. They are tax disputes. So the first point that we would like to make here is that the tax dispute will need to be defined under the convention. Whenever we get down to the various definitions, we'll have to define what is a tax dispute. Apart from these tax disputes, which will have their own manner of resolution, there will be disputes that will arise under the convention. So now the question that all of us have to consider as to how are we going to deal with these two types of disputes. Are both the types of disputes going to be dealt with under workstream three or disputes under the convention are going to be dealt with workstream one and tax disputes are going to be dealt with under workstream three. These are some points that I believe that we need to consider when we go forward. So I think that, and then the final thing about an additional concern, that comes out from paragraph eight of the issues note. Now, the opening lines of paragraph eight speak of court decisions and so on and so forth, issues that may come up through domestic courts. I think that maybe the way this is drafted, we can avoid being rather prescriptive about this because there were some references about national sovereignty, et cetera. Now, what happens in our national courts, it happens. I mean, there's nothing that anyone else can do about that. So I think these are some of the additional concerns that immediately come to mind. So thank you.


Chair [1:51:08]:

Thank you.


Speaker 52 [1:51:16]:

Thank you, Mr. Chair, dear colleagues, and dear distinguished delegates.

My intervention will be in Russian. Thank you for giving me the floor. With regard to the question set out in the issue note of workstream one, we would like to address three issues. First, we think it's necessary to note that tax certainty is integral to legal certainty and in turn is needed to curb expenses. for meeting regulatory requirements and it's needed to attract foreign direct investment and to improve cross border trade. With regard to the provisions of the… Uh, framework convention, uh, it can also address many mixed issues when it comes to dispute resolution that shouldn't be limited to disputes arising on the application of the framework convention and its protocols. Turning now to the second question, we would like to echo the opinion voiced, uh, earlier. namely that if the protocols are optional, then the wording of commitments on dispute resolution should be as practical as possible and it should reflect ways to settle disputes, including for States for which dispute resolution mechanisms that exist today are either ineffective or cannot be implemented for legislative reasons. Turning now to the third question on possible concerns to be reflected in the text of the commitment on dispute settlement, we think that an effective mechanism for prevention and settlement of disputes requires a transparent and ongoing exchange of information. In that regard, we would like to include in the elements of the mechanism for the settlement of and prevention of disputes conditions on transparency, which is grounded in the effective trading of information based on fairness. Thank you.


Chair [1:53:36]:

Thank you. Next is the delegate of Nigeria, followed by Singapore.


Nigeria · Africa Group · Delegate [1:53:46]:

Thank you very much, Chair. I speak on behalf of the African group. And Chair, and delegates. Let me begin by affirming in the name of the African group, our commitment to a fair and inclusive international tax system which works for everyone's interest. And when all countries have a seat at the table, and a stake in the outcome, we are convinced that the global economy will become more stable, more just, and more sustainable. And such, on behalf of the African group, I want to thank the Chair and the co-leads of the workstream one, and I also want to thank the secretariat and everyone involved for the transparent, and consultative approach to the work ITER 2. We welcome the prioritization of commitments, but we underscore that all items in the terms of reference, especially procedural and institutional matters in paragraph 13, deserve equal and careful consideration. Chair, Your Excellency, as regards the issue of commitment to dispute prevention and resolution, we have specific comments as follows. As regard paragraph nine, as to the question as to whether the language sufficiently addressed concerns about effective dispute prevention and resolution. With due respect, Chair, and distinguished delegates, we regrettably say no. From our perspective, the commitment section of a treaty shouldn't serve as a space for justifying or elaborating on the motivations behind the commitment. We believe that when motivations are embedded into commitment texts, the language risks becoming too prescriptive and this will constrain interpretation and will not allow for flexibility and will also limit the adaptability of the convention itself. We believe that a more effective approach will be to articulate high level principles and leaving the rationale and implementation modalities to the supporting protocols. And as such, we think a language such as, and I quote, "Parties commit to fair, inclusive, effective, and timely prevention and resolution of tax disputes, including through the establishment of appropriate mechanism, will be more apt and high level enough and all other elaboration can be done via relevant protocol or instrument. Furthermore, as to the question as to whether paragraph 9 provides sufficient support for the development of the early protocol under work stream three, we believe so and our response will be yes. However, this is conditioned that the commitment is framed in broad inclusive terms. Again, we believe that having a language like I had there stated above about a general statement in the convention, the framework itself will survive. We believe that we should use the protocol to elaborate and provide multiple implementation options such as administrative or judicial procedures or mediation or things like that depending on each other's state preferences and capabilities. And we sincerely want to underscore the issue of preference and capabilities. Noting that several members have spoken about tax sovereignty, many also know that we have different capacities and capabilities. And so whatever we are coming should not be one straight jacket fix all, but we must work on the basis of the capacities of member states. Finally, under this same paragraph, whether there are additional concerns regarding dispute prevention and resolution that should be addressed in the framework convention. We don't think so because we believe that the framework convention should be high level and particular issues should be addressed under relevant protocols or instruments. We should also, in our view, the framework convention should not attempt to codify detailed procedural elements of dispute resolution. Instead, it should articulate a clear principle-based commitment and leave the technical and procedural specifics to the appropriate protocols. With this approach, we believe that the convention will remain a durable and adaptable framework, while the protocol can address operational concerns in a more precise and context-specific manner. Finally, Chair, the African Group firmly believes that dispute resolution mechanism must serve the dual purpose of legal certainty and equitable access. especially for developing countries. Ensuring flexibility and clarity at the foundational level is therefore essential for the credibility and effectiveness of this emerging framework. Chair, distinguished delegates, I thank you.


Chair [2:00:27]:

Thank you. Distinguished delegate of Singapore, followed by Saudi Arabia.


Singapore · Delegate [2:00:33]:

Thank you very much, Chair, and thank you again for the presentation and for guiding us in this discussion. I'd like to start by agreeing with the distinguished representative from India on the importance of this article or statement on commitment one referring to cooperation. I think the colleague mentioned economic cooperation. We're looking broadly at international economic cooperation. We agree with India that legal certainty as articulated in, in paragraph nine of the issues note, uh, is an outcome, but not necessarily an objective, uh, important nonetheless. And I think earlier the distinguished delegate from Iran spoke to the need for an international enabling environment. And I think this really cuts to the crux of the issue, and that is the issue of collaboration between member states to achieve effective dispute prevention and resolution. So from Singapore's perspective, we think that it would be good if we could have a broad high level commitment on the need for states parties to work together to achieve effective prevention and resolution of tax disputes, which would then have a bearing, I think, on what we have said in paragraph nine on the articulation of fair, independent, accessible and effective mechanisms that we are looking at undertaking. So maybe this can be part of that statement in the commitment. The second point I'd like to make is also, I think, something that colleagues have mentioned previously, that states already use a variety of mechanisms and tools for alternative dispute resolution. So we are in favor of the optionality where state parties can opt in or out from a menu of such tools as per their legal frameworks and circumstances. And we agree that the specifics or procedural prescription of this menu can be discussed in the relevant protocol. And we also similarly echo the earlier comments about distinguishing uh, between dispute prevention and resolution for tax disputes and disputes arising from the interpretation and application of the framework convention, as, uh, we mentioned in our statement earlier and was also, uh, queried by our colleague from Saudi Arabia, and perhaps one approach. that could be considered is that there can be a broad provisional clause as per UN conventions. I think in the presentation this would fall perhaps under the purple box, the third purple box on resolving disputes arising from the framework convention, but perhaps with a caveat that mechanisms specific to the protocols could be elaborated in the protocols or future protocols, which could then take into account the technical specificities of those protocols and the issues discussed therein. Thank you, Chair.


Chair [2:03:18]:

Thank you. Mr. Yousri Ghattaoui, Saudi Arabia.


Saudi Arabia · Delegate · Yousri Ghattaoui [2:03:22]:

Thank you, Chair. Maybe to my earlier comments before the break, I think it's important for us to ask ourselves, what are we trying to solve for here? We have disputes today that are arising from, we said, agreements and so forth. We have disputes that might arise from the protocols that we are developing, maybe mainly the first protocol. And then we have dispute that might arise also under the framework convention, which honestly, I cannot think of them now. I don't know what might arise from the framework convention, but this is something for consideration. Um, and, and maybe one, one alternative, um, that, um, we, or one option that we can work with is that maybe the second protocol focus on solving issues that are arising today. And then the framework convention will have a sort of a mechanism for disputes that are arising from the convention itself. And then maybe each protocol will have its own dispute resolutions because again, for example, we're talking about the first protocol, it will require maybe a unique dispute resolution mechanism given that one taxation, one jurisdiction would impact the taxation of the rest of the group. So that's something to be considered. And this also give us the flexibility for any future protocol that we don't need to envisage what kind of dispute that will arise in the future. So we leave it to any future protocol to be developed will have its own dispute resolution mechanism. And definitely dispute prevention is to be prioritized. And I think one way is to design good rules that will prevent disputes from arising from the beginning. Thank you so much.


Spain · Delegate [2:05:10]:

Madam President.

I'd like to begin by thanking the Chair and the coordinator of the working group for their dedication throughout this time to prepare the thematic note, and I'd like to echo the other delegations on the level of the detail of the commitments in general. We believe that these should be defined at a very high level, that is, they should be general and non binding in and of themselves, because the aim here is to ensure the greatest possible support from Member States. Focusing on the elements of the thematic note, Spain recognises the need of ensuring legal certainty both for public administration and also for contributors. We understand that Clarity is a essential pillar for effective international tax cooperation, so we think it'd be helpful to include these elements of legal certainty for both the public administration and also for con… taxpayers. We therefore support this commitment, providing that it allows for flexibility for future developments and provided that there is consensus and allows for optionality between the different instrument agreed instruments for dispute resolution should such disputes occur. Thank you.


Chair [2:06:36]:

Thank you. Distinguished delegate of Cameroon, followed by Iran.


Cameroon · Delegate [2:06:42]:

Thank you, Chair, for giving me the floor. Cameroon aligns totally with Nigeria, and I just have a few remarks or maybe observations to make. We welcome the focus on effective prevention and resolution of tax disputes. However, we think we must be unequivocal. Commitments that do not translate into enforceable balanced mechanisms risk perpetuating the very inequalities this convention seeks to address. Now, we talked about the concrete legal safeguards. The elements, I think, under discussions must go beyond aspirational language. I think they must be very clear. They should be enforceable safeguards. that protect the interest of all member states, particularly those with limited capacity to navigate complex international tax disputes. While we recognize the importance of the legal certainty as presented in the slides for cross-border trade and investment, legal certainty alone is not sufficient. We strongly advocate for the establishment of clear, simple and easily comprehensible rules, particularly in complex areas such as transfer pricing. We advocate for simplification and clarity in these rules because they are not only essential for building trust between tax administrations, but also with the taxpayers. And so we ask for crucial measures for preventing disputes before they even arise, especially for developing countries with limited administrative capacity. Ultimately, such clarity will contribute meaningfully to the broader goal of enhancing domestic resource mobilization and fostering a more equitable international tax environment. Thank you.


Chair [2:09:08]:

Distinguished delegate of Iran.


Iran (Islamic Republic of) · Delegate [2:09:12]:

Thank you, Chair. Chair, I thank the delegation of Nigeria on behalf of the African countries. The issues that their delegation raised are among the many developing countries' concern. But I also take the floor to highlight some issues directly or in the answering to the question. And then I started with the issues that my colleague from India and also Singapore mentioned about the somehow about the scope, yeah, scope and then about the investment and then transparent reactions. And then my delegation believed that we should not dilute the scope of the dispute, especially in this important process. And then somehow, maybe when it comes to the transboundary issues, we need to highlight it and then reaffirm somehow the role of the big companies and then transboundary platforms. those roles is highly important. And then another issue that we need to consider that one is a procedural fairness that it's important especially for developing countries. And then beside that one, addressing the unique concern of the developing countries, especially when it comes to the sovereignty rights and concern, it should be also highlighted and then we need to address them here. And then, for example, another matter that is a concern for developing countries is the importance of prevention when it comes to the cost. And these are some issues that need to be highlighted specifically when it comes to the scope. We have to respect the scope and then not dilute the scope of such an important and legal document. Thank you.


Chair [2:11:12]:

Thank you. Distinguished Delegate of Colombia.


Colombia · Delegate [2:11:17]:

Thank you, Chair. We are grateful for all of the work. that has been done on this commitment to develop the framework convention. For Colombia, it is doubtless important to implement effective tax dispute resolution systems, specifically when they involve more than one jurisdiction. We believe that those mechanisms must be inclusive and viable to be adopted by emerging countries, avoiding excessive burdens relating to possible international arbitration and ensuring transparency and guaranteeing certainty for the parties, both for taxpayers and for tax systems. We agree that those mechanisms should follow the principles of being fair, independent, accessible and effective to resolve disputes in a timely manner. However, it's also worth bearing in mind what is our understanding of the word timely now for developing countries that have less experience in the use of this type of mechanism. The time of these resolution mechanisms might be different, how long this takes might be different to countries with more experience. So it would be helpful to understand what we mean by timely and what we're going to do to achieve that. We'd also think it would be important to be clear about the interaction between what we're trying to establish under the framework convention in dispute resolution and how that interacts with the work being done on protocol two, particularly in light of the fact that in protocol two there won't be a binding obligation on states to implement it, rather it'll be an optional protocol. Finally, we would like to say that we agree with what was said by the delegate of Cameroon just now. Indeed, it is important not only to promote dispute resolution mechanisms, but also dispute prevention mechanisms. It is clear that these prevention mechanisms avoid high costs, both for taxpayers and also for administrations, and also high administrative burdens. that are imposed by dispute resolution proceedings. Thank you.


Chair [2:14:21]:

So I see no more requests for the floor from Member States. So now we are moving to the multi-stakeholders. So the floor to the representative of Global Initiative for Social Initiative for Economic, Social and Cultural Rights. Please go ahead.


 [2:14:44]:

Yes, thank you, Chair. I speak on behalf of the Global Initiative for Economic, Social and Cultural Rights. Current cross-border tax dispute mechanisms are fragmented, costly and skewed in favour of those with the most resources, often in detriment of countries in the global south. Business as usual, quite simply, only favours profitability for historically benefited nations and corporate actors at the expense of global majorities. This convention requires actionable commitments from the outset. A commitment to adopt unitary taxation would inherently reduce disputes by simplifying the allocation of taxing rights. Additionally, the convention should establish a transparent and inclusive mechanism under COP, ensuring developing countries, including those with smaller networks of tax treaties, have equal access to a fair process. The rising complex cross-border tax disputes has highlighted the inadequacy of systems like bilateral arbitration, mutual agreement procedures under double taxation agreements, or APAs. These mechanisms are often underutilized due to high cost, weak enforceability, and lack of transparency or civil society participation. In some cases, corporations bypass them altogether, resorting instead to investor-state dispute settlement mechanisms that favor commercial interests over public ones. The goal should not be to simply fix these procedures, but to confront the structural roots of conflict. This includes things like revisiting the arms length principle and replacing it with less litigious solutions like unitary taxation with formula apportionment and enhancing multilateral cooperation to reduce disputes at the source while safeguarding fiscal sovereignty. The commitment and protocol on this topic are an opportunity to create a truly inclusive, fair, and effective system. We need a dispute resolution framework that strengthens national capacities, that is simple, that has safeguards against investor state arbitration, and avoids unnecessary litigation. We should also avoid creating a patchwork system full of optional mechanisms. We also need to make sure that developing states have the resources necessary to pay for the legal counsel, accountants, and capacity building that this sort of specialized mechanisms demand. Without ensuring sufficient and accessible funding without any conditionalities, all dispute settlement mechanisms, regardless of its form, will perpetuate a preexisting inequalities and an unlevel playing field. Dispute resolution is not just a procedural matter. It's essential to the legitimacy and effectiveness of the entire convention. A mechanism that excludes the voices of the people affected, that fails to consider the impacts the current system has on the state's obligation to realize human rights and their ability to finance sustainable development is simply not acceptable. I would like to finish by saying that at civil society, we are ready and available to support this process with evidence, with analysis and expertise from every region and from every angle. Thank you so much.


Chair [2:18:09]:

Thank you. Representative of Children and Youth International.


MGCY · MGCY · Semantic focal point for tax · Jaewon Choi [2:18:16]:

Thank you, Chair. This is a joint statement delivered on behalf of the Major Group for Children and Youth. My name is Jaewon Choi, and I serve as the semantic focal point for tax for the FFD Children and Youth Constituency for the Major Group of Children and Youth. MGCY serves as the designated self-led youth constituency for young people, engaging in over 50 intergovernmental and more than 200 multi-stakeholder processes. with a membership of over 20,000 youth organizations across the UN system on topics ranging from climate change, humanitarian affairs, human rights, to migration. Chair, as this is our first statement, allow us to make some overall comments. First, we express our concern that yesterday's afternoon general discussion segment was abruptly canceled. The valuable opportunity for specially accredited organizations to participate were taken away, as the organizations were not able to receive badges yesterday. Second, we call upon states to build a convention that is inclusive for all stakeholders and rights holders. For the commitment of sustainable development, especially in all social dimensions, we call the committee to directly include children and youth, not as beneficiaries of domestic public resource mobilization, but as key rights holders and decision makers that shape relevant national and international policy. We call upon states to also create a dispute prevention and resolution mechanism that effectively represents all taxpayers. This includes marginalized groups like rural communities and young entrepreneurs that often do not have adequate information or resources to access any relevant mechanisms to resolve tax disputes. Finally, building on the successful models like HLPF and FFD4, we request that stakeholders are allowed to intervene actively during the discussions interspersed with member states rather than at the end. Distinguished colleagues, Mr. Chair, children and youth remain committed to bringing active and valuable contributions to this committee. Yet, if we do not have a seat at the actual table, our contributions cannot bring the value we promise. We thank you.


Chair [2:20:36]:

Thank you. ICC Pakistan.


ICC · Chair of Taxation Commission [2:20:46]:

Thank you, Mr. Chair. I will deliver these remarks on behalf of ICC and as the chair of the Taxation Commission of ICC Pakistan. For developing countries like Pakistan, attracting and retaining cross-border trade and investment is vital for our sustainable development. A key enabler of this is an international tax system that minimizes uncertainty and crucially prevents tax disputes. Unresolved disputes significantly undermine our economic progress. We strongly welcome the draft issue notes emphasis on legal certainty. This is fundamental for any well-functioning international tax system. For both taxpayers and tax administrations, clear rules are paramount. We advocate for dispute prevention and resolution mechanisms that are fair, independent, accessible and effective, designed not just to resolve dispute but to prevent them from arising in the first place. The issue notes rightly notes that relying solely on litigation process presents challenges. cross-border tax disputes are often lengthy and outcomes may not be respected across jurisdictions, risking double taxation. This uncertainty deters investments. Therefore, prevention is of paramount importance. Tactical tools like early APAs and cooperative compliance that has already started to be successfully implemented in many developing countries deserve broader implementation. Where disputes do arise, alternative dispute resolution mechanisms including mediation and binding arbitration offer clear advantage. For developing countries, these tools are essential. as they expedite outcomes, significantly reduce litigation cost, and provide greater certainty. ADR offers flexible, less adversarial paths, particularly valuable in capacity-constrained environments. Crucially, the role of taxpayers and taxpayers' rights must be clearly recognized and actively embedded in these mechanisms. Processes that fail to involve taxpayers risk losing legitimacy. Taxpayers are the primary affected parties and can provide vital factual clarifications. Without their meaningful participation and transparency, outcomes may fall short. For this reason, ICC Pakistan believes it is vital to establish a technical business advisory council, as previously suggested by ICC, to provide transparent insights from taxpayers. Finally, we urge this committee to consider how new mechanisms will interact with existing instruments like bilateral treaties and domestic remedies. Clarity on sequencing, compatibility, and optionality is critical for efficiency and legal coherence. Mr. Chair, we support the committee's goal of establishing a fair, accessible, and effective dispute resolution system. ICC remains committed to contributing the practical experience of the business community as this process moves forward. Thank you, Chair.


Chair [2:24:17]:

Thank you. Distinguished representative of African Union.


AU [2:24:24]:

Thank you, Mr. Chair. And we would like to align our position with the Africa Group and Cameroon on the prevention and resolution of tax dispute, the African Union supports a clear and flexible commitment to fair, inclusive, efficient, and timely mechanism that prioritize accessibility and equity for all countries, especially those with limited treaty networks and administrative capacity. Our experience in mandatory binding arbitration has also highlighted the need for the framework convention to avoid replicating asymmetries seen in investor state arbitration and other existing frameworks. We call for a commitment that recognizes the differentiated capacity of states and supports regionally accountable tools such as structured joint audits, and capacity sensitive advanced pricing agreements. We also call for dispute prevention mechanism that focus on cross-border related tax disputes that reduce the incidence of costly prolonged disputes. We also call for the principle of tax sovereignty and cooperative multilateralism. We also propose a commitment in line with those outlined in paragraph 10 of the terms of reference to serve as a foundational legal anchor for the forthcoming Protocol II, while remaining flexible enough to accommodate evolving practices in dispute prevention and resolutions. On sustainable development, Mr. Chair, we welcome the language proposed by the issue note and reiterate that international tax cooperation must catalyze economic, social, and environmental progress. We advocate aligning this commitment with global and regional development agenda, such as Agenda 2030 and our Agenda 2063. The commitment should reaffirm the sovereign right of state to mobilize domestic resource mobilization and embed tax cooperation as a pillar of financing sustainable development. In particular, we urge the committee to explicitly reference the interlinkages between equitable taxation and the achievement of the SDGs, recognize that coherent and just international tax rules are essential for climate finance, social protection and inclusive growth. We support the implementation of this commitment with targeted technical assistance and sufficient financing to strengthen national capacities. Mr. Chair, the African Union also underscores the institutional urgency of implementing resolution 79/235 including the establishment of a technical secretariat and adequate resourcing of this process. Without robust institutional support, the legitimacy and credibility of this convention will be seriously undermined. Thank you, Mr. Chair.


Chair [2:28:05]:

Thank you. The Permanent Delegate of Canada.


Canada · Delegate [2:28:11]:

Thank you, Mr. Chair. Apologies for coming in so late, but I've been reflecting on kind of what can be added to the discussion and bringing us back to the questions that we see on the screen. Let me say first, I think Canada's in agreement with the vast majority of interventions we've heard in supporting a high level and flexible commitment. And as such, we're generally supportive of the direction of the work on this very important commitment and generally support what is covered in paragraph nine of the issues note. I think questions that we have not resolved, and I query whether they need to be resolved, is the scope of the commitment being, are we also making commitments in respect of purely domestic disputes related to international transactions, or are these commitments related to when we have cross-border disputes with different treatment in different states. And I think that's something where we did have some discussion in the work streams, and I'm not sure that there was a conclusion. And I think there was some call from some states with being interested more domestically how they could institute prevention and resolution. So I think a broad drafting in that respect could be helpful. And I think the next question that's important is, you know, have we scoped it broadly enough to provide support for the early protocol? I think in my view, the answer is yes. For me, though, it then raises another question in terms of, I think we've linked here this commitment to the early protocol, but I don't think we've yet had a discussion about the link to any other aspects in the convention, and I think it would be helpful also to have some understanding of the linkage and interaction with other aspects of the protocol -- other aspects, I'm sorry, of the framework convention, and in that respect, I note There are the provision on exchange of information, potential provisions on review and verification, data collection and analysis. And it's unclear to me whether there's any intended linkage there. In fact, there's a lack of clarity for me in terms of what would be covered under at least the latter two of those topics. So I do think that that would be helpful. I think a last comment, it's a little unclear to me, although I think it's okay to scope broadly enough how this process can impact how a commitment on effective prevention and resolution of tax disputes can deal with a situation where there is no agreed common legal basis between the parties. So that would be where we don't have a dispute resolution process to resolve a dispute in respect of a protocol to this convention to which both states have signed up to, or a case where there's some other form of a common legal basis, a tax treaty. So it's a little unclear to me how we would have a dispute resolution process to resolve an issue where there's no common legal basis. Thank you.


Chair [2:33:19]:

Thank you. The delegate of Tanzania.


United Republic of Tanzania · Delegate [2:33:25]:

Thank you, Mr. Chair. Mr. Chair, the United Republic of Tanzania fully supports the statement delivered by Nigeria on behalf of the African group as well as other delegates and African Union comments. In our view, commitments on the prevention and resolution of tax disputes must remain broad flexible and adaptable as envisaged in the terms of reference, with the detailed concerns addressed in the protocol.

Rather than in the core text.

Mr. Chair, we stress that the focus should be on strengthening international cooperation and rules for dispute prevention and resolution, not on embedding a mechanism that replicates investment and trade dispute frameworks. which have historically not worked in favor of developing countries such as ours. Thank you, Mr. Chair.


Chair [2:34:25]:

Thank you. State Delegate of Jamaica.


Jamaica · Delegate [2:34:30]:

Thank you very much, Chair. We support the intervention by India and Canada on the issue of the issue note providing greater clarity on how disputes under the Convention itself are going to be addressed. We appreciate the inclusion of the reference to workstream 3 and workstream 2 in the issue paper, but I think it was our understanding that there would be addressed in the framework convention how disputes arising under the convention itself would be addressed. And so we believe that clarity is needed in the issue note. Thank you, Chair.


Chair [2:35:35]:

Thank you. Distinguished representative of ATAF.


ATAF [2:35:44]:

Thank you, Chair. And the African Tax Administration Forum would like to support the statement delivered by Nigeria on behalf of the Africa Group, the African Union, and others. We believe that the issues arising from dispute resolution and prevention should be detailed as high-level commitments in the framework convention. The specifics of dispute resolution and prevention can then further be elaborated in the associated work stream. We further would like to bring to the attention of the secretariat that paragraph nine has issues that should not, that risk being overlooked. pertaining to the gaps faced by developing countries such as low map inventory as well as low APA uptake. And therefore, it is imperative that a multilateral view is taken in the framework convention to ensure that this is all inclusive, clear and easy to implement. Thank you.


Chair [2:37:50]:

I see no requests for the floor, either from member states or multi-stakeholders. So by this, I think we reached the end of today's session, morning session, morning session. We're going to have the afternoon one. So, and in the afternoon, we're going to start with the second commitment, which is the fair allocation of taxing rights. So thank you all. The second one is sustainable development, second one, so, so sustainable development, uh, but I think the, the afternoon session can, can take both of them, but we'll see, depend on the comments that we, we're gonna receive and interventions. So thank you all for now and have a nice, uh, lunch break and see you in two hours from now in the same room. Thank you.