Third Session of the Intergovernmental Negotiating Committee on the United Nations Framework Convention on International Tax Cooperation

from yesterday yesterday we um started with dispute prevention and resolution can we have some silence please those at the back so yesterday we started with dispute prevention and resolution. We want to continue with the discussions this morning. So I basically call the meeting to order and would put up the slides and then would have the discussions. So I now move back to my position as co-lead. All right, thank you everybody for coming in. I want to, there were some discussions we had and I want to clarify something. So we can go to the slide which shows the relationship between the, yep. The, want to go over the relationship again because there were a few questions and there still seemed to be some confusion on the relationship between the three, the two articles, that's 10 and 20, and then the second protocol. And I'd like to go at the first thing is that, and we've all basically agreed on that, that the commitments are generally broad and form the basis for discussions. The commitments, and to put it in a way, they are not rules that we are going to enforce. The rules that will be enforced will be in protocols. So the protocols, as we look at that, are for implementation of the principles and the commitments. So that is the job of protocols. The commitment, yes, this creates a foundation for what we've agreed to do. And that will bring the rules for doing it comes in the protocols or whatever instruments we'll decide to use to do that later. And then Article 20 relates to the framework convention itself and disputes that may arise in relation to the framework convention. So it could be that, okay, we have this commitment and two countries are saying that, I see it this way, this person sees it that way, and we decide that this is how we'll do it. So I think there's a need to have that clarity in terms of these three items and how they relate to each other so that as we are dealing with them, we have that at the back of our minds. So that's what I wanted, the first thing I wanted to do. Now there's another general statement I want to make. And I think because it's been recurring, there's been the issue of the principles in the framework convention talks about sovereignty and we agree to sovereignty. The issue is that we can't do anything if we don't put it into law in our countries, so in our states. So that is a given. And so, but what I think Sometimes the statements give an impression that in my country, I can't do this, in my country, in my state, I can't do this. Automatically, some of our laws are not that way. But if I can give an example, when we wanted to do the common reporting standards, we had to put in legislation that supported it because we had agreed to do it. And so it's when we agree, our head of state agree on something, then we put it into law if we have to. If it's not agreed upon, automatically we are not, we won't have to. So I think that clarity should be there, that no one is saying that when the framework convention comes up, it becomes an immediate legislation which you need to, you have to ratify, you have to sign onto it. So I think let's get that clarity and make our submissions. which is what we are all making so that we come out with something that we all agree to and we all can work with. So that is the -- because sometimes the way AVS creates some confusion amongst some of the member states who have raised the issue. So thank you for that. So I think we can now move to the document itself and we'll welcome comments, please. So can we have somebody to break the ice for us? The co-lead is the only one on the screen speaking. I want a member state to volunteer and open the ice first and start the conversation for us. Okay, India please.

Thank you, Chair. We actually just want some clarification and some discussion on one topic, which is there is a men-- if you can go back to the slide which had-- yes. So our understanding is that Article 10 and Article 20 will be dealing with two different sorts of dispute resolution. One would be a dispute which is arising from the framework convention which will be dealt by article 20 and article 10 will be the prevention and resolution of tax disputes which will be operationalized by the protocol. Now our submission here is that I think to ensure that this is clearly set out in the framework convention there needs to be a definition separating both the tax disputes that are going to be dealt by Article 10 and the tax disputes that are going to be dealt by Article 20 because that segregation is important. Any dispute under the framework convention can also arise from a tax dispute. It may be an interpretation issue but it would still, it might be linked to a tax dispute and therefore a definition separating these two is something that probably the House needs to deliberate upon. Just breaking the ice here and this is the initial comment from us.

Okay, so India, that is noted. As we mentioned, if you look at the statements themselves, 420 is straight and direct, but then we'll look at when we come to definitions, we'll see whether We'll have that discussion then and see whether we still need a definition in terms of that. But then it might likely will have to be in the articles themselves and not in three. Thank you. Okay, so let's see, Zambia, please.

Thank you, colleague. Good morning, Chair, good morning, Secretariat, good morning, member states and colleagues. So I think firstly, speaking on behalf of Zambia, we concur with what India submitted. I think there's need for clarity in terms of what we envisage to be the scope of these articles so that we don't have confusion. I think yesterday when we had the examples, I think we had to step back Because I think in one of the examples we saw under ArticoTen, there was one which was a purely domestic issue. And I think it was now making us wonder whether ArticoTen will then deal with purely domestic issues. So I think there will be need to have that clarity. Moving on, speaking on behalf of the Africa group, I think yesterday we did propose some changes to article 10. Article 10 as it has been presented by the secretariat chair and colleague, like I said yesterday, we are generally agreed with it. I'll just highlight to, I think what I said yesterday with minor changes. I think the first paragraph, the state parties recognize that implementation of effective measures for avoiding and resolving tax support cross-border investment and cross-border trade in goods and services. We appreciate that wording. However, in our view, it's more wording suitable for a preamble. And we are proposing that probably that paragraph one be amended to read the state parties commit to implement effective measures for the prevention and resolution of tax disputes. Paragraph two and three, generally agreed with them, but with just a minor change where we are proposing that the two be combined to be under paragraph two but separated by subparagraphs A and B. And in that regard, our proposal is that we emphasize the commitment and the wording should therefore probably begin with in furtherance of this commitment the state parties will then we have the sub sub paragraphs dealing with two and three and in that regard this the paragraphs of the state parties will have to be deleted again in paragraph three the state parties will state parties also will have to be deleted so that then We have everything as it is. The other issue that we then propose under B is that just before, which is now paragraph three as put on the slides, which is just before resolving disputes, we insert effective in resolving tax disputes. in a timely manner and we end there and we then delete for both taxpayers and tax authorities involved. We believe that the disputes generally obviously will involve taxpayers and tax authorities but the issues may differ and it is our view that we probably end just on the timeliness where we end in a timely manner without extending that emphasis on both taxpayers and tax authorities involved. I submit, Chair and colleagues, thank you.

Thank you, Zambia. China, please.

Thank you, Chair. Good morning, colleagues. First, I would like to thank colleague and secretariat for providing the slides and necessary information. for further discussion and also, of course, the example cases. We recognize the importance and necessity of dispute prevention and resolution, and we welcome and support the inclusion of this Article 10. During the discussions in working stream three, DEIR is a broad support for limiting the scope of Protocol 2 to cross-border disputes only. because for the settlement of domestic disputes it is a matter of state sovereignty. In this context, in the second example in the slide yesterday, which we believe is a showcase of domestic dispute, should not be covered by Article 10. And for paragraph three, maybe we should take out the word domestic here. to avoid the confusion that Article 10 will govern domestic disputes. I stop here. Thank you, Chair.

Thank you, China. Switzerland, please.

Thank you, Mr. Chair, and thank you again for these explanations, these slides.

I think.

The slides help us have a better understanding of the whole picture.

And here we're talking about Article 10.

It's clear that we don't have Article 20 yet. So maybe it wasn't the whole mechanism and the functioning sometime is.

Now getting clearer, but it's difficult to have an extensive discussion Article 10, maybe with Article 20.

Just to What I brought up yesterday already is the fact that in Article 10, the first thing that struck us was maybe a lack, I didn't recognize elements of work stream three. So the question here is paragraph one sufficient in that context? It seems like our dispute resolution article here on paragraph on Article 10 is.

It's quite focused on domestic aspect as well in paragraph two and three.

And I'll, I agree with my distinguished Chinese colleague that we find maybe the second example of the slides problematic as it seems like that's a domestic issue that's being resolved.

So that's, that's where we'll leave it.

Thank you, Suzanne, for your comment. Maybe I can give some background about this and next week we are going through protocol 2 in which the two co-leads will provide more comprehensive discussions around this. But the paragraph 2 and 3, I think as Daniel said here in article 10, is a commitment in which it provides a foundation for protocol to in order to be able to work. And in within the discussions there was some discussions about the scope of when we talk about the cross-border disputes. And one of just very briefly one of the ideas and the thoughts that to provide some guidelines and the best practices for the domestic dispute prevention and resolution and this one of the sorts that may be protocol too can commit the COP. Of course there's no best practices or guidelines inside the protocol but may it commit the COP once it's formed to establish best practices and the guidelines for domestically how what's the best practices to follow to prevent disputes and to resolve it. as fast as possible. So maybe paragraph two and three can come in this context that they provide also the foundation for the protocols, those protocols later on can provide a commitment on the COP to do this or to work in a different mechanism, whatever will be decided in protocol two. So it's not meant to go to be something domestic, but it's providing the base for the protocol later on that the COP can provide these best practices and guidelines for the domestic issues. Thank you.

We have Zambia again. Zambia.

Thank you, Chair. Thank you for the opportunity to come back again. Chair, there's one key point speaking on behalf of the Africa group. On the text as submitted by secretariats, we also have a proposal that under paragraph three the reference to domestic dispute, we delete domestic and replace it with appropriate so that we say to implement appropriate dispute resolution because we believe that this commitment should be at least broad enough, it anchors the work for instance to be done under protocol two and therefore it is our belief that We make it as broad and not limit the scope to domestic and therefore we, in that sense, we say to implement appropriate dispute resolution. I submit, Chair, and thank you.

Thank you. Noy, please.

Thank you, Mr. Kauli, and also thank you, Mr. Chair, for this draft and also for your explanations. I think These are like preliminary comments on the issue of the interaction between Article 10 and Article 20, and also bearing in mind that we haven't seen any language on Article 20 yet. So I think some of our confusion comes from the boxes in the presentation. And may I also add, thank you for presenting us with those boxes that explain some of the thinking about the interaction here. it's very helpful because it would seem to us that in the yellow box on top on the dispute settlement under framework convention it's intended to apply to all the commitments in the convention whereas in the bottom box it says that it's intended to apply to dispute, the protocol is intended to apply to dispute settlements as is within, disputes within the scope of the protocol, but also has some relation to disputes on, related to the specific commitment on dispute settlement. So I think our confusion is around that. And maybe when we receive some text from draft proposals for Article 20, it will become clearer. We are not sure that it's a good idea to cover both in the protocol, and that has not been the part of the discussions in the work stream three anyway, but we look forward to receiving some text and we think this is a good time to start talking about the other provisions in the Convention because we can clearly see here that they relate back to the commitments. Specifically on Article 10, prevention and resolution of tax disputes is very important, both in the domestic context, but also in the international context. And this is something that is always underlined by business, both in the domestic context and in relation to international tax cooperation. And it's very important to promote trade and investment and ensure tax certainty for all involved. We think that the principles expressed in paragraph two and three, they are important principles and they give good guidance. We are open to suggestions for exact wording, but we do think they express some important principles, but like Like Switzerland and others have said, it's not clear to us how the disputes that arise between tax administrations are covered here. I heard the explanation and I think that it's possible to do more and make that more clear so that it is in fact a clear anchor for the protocol on the workstream two. I'll stop there, thank you.

Thank you. Germany, please. Mic to Germany, please.

Thank you, Mr. Koellie.

Good morning, everyone.

Apologies for messing up the mic. Thanks for opening up again. I'm going to speak in my national capacity and not my capacity as co-lead of work stream three. I totally share the assessment that it is not immediately apparent from the current draft of Article 10 what has been discussed in workstream three so far. Indeed, there is also in my view broad support for the scope of the protocol being limited to cross-border tax disputes. Therefore, I too believe that Article 10 could be strengthened by an addition that serves as a more specific anchor of the Second Protocol. That being said, I don't deem it problematic or being at odds, particularly with the terms of reference, having at the same time the emphasis also on domestic tax dispute in Article 10. And in that regard I would like to point out that according to the terms of reference the protocol is supposed to be on cross-border tax dispute but the commitment does not speak about cross-border. And it is in Germany's view relevant to tackle the issue of tax dispute prevention and tax dispute resolution holistically to also consider the domestic side of things. Thank you.

Thank you, Germany. Portugal, please.

Thank you, Mr. Kollitz. Let me start by announcing that our discussion in respect of the examples that were circulated through us yesterday, I believe that it will be they are more indicated to be assessed during the next week during our work for work stream three given that they appear to me to mainly trying to distinguish between what are cross-border tax disputes and purely domestic tax disputes and that is something that we are discussing in work stream three and it is quite important and as I got it until now, it is not that relevant when we are distinguished what type of disputes are envisaged in Article 10 and what type of disputes are to be dealt with under the terms of Article 20 of the Framework Convention. And that discussion I believe that we will be very happy to maintain among us as soon as we have some text also for Article 20. In respect of what we have in front of us in in this draft of Article 10, we share the opinions so far exposed by Norway, by Germany also, noting that this article is somehow short when we try to anchor there what we are discussing at the present time in Work Stream 3. In fact, if we accept the adding, we don't get any clear element in the draft that give us sufficiently assurance that this will be the adequate place to anchor what we are discussing in the article, in work stream three, sorry. And for the rest of the article, we notice that and we conclude that it is a little bit more, more, the scope of it, it's article ten, it goes beyond what we are discussing in work stream three, which for us it's not in itself a problem, But the shortness in respect to the protocol to that, I believe it's something that we have to address. Thank you.

Okay, let me ask a question. If I say dispute, I believe that is general. If I say cross-border, isn't that a subset, cross-border dispute, isn't that a subset of disputes? Maybe it's a question I'd like to-- because disputes is general, cross-border disputes is narrowing the disputes. So doesn't that form a basis for me to do a protocol on cross-border disputes without even adding anything else? Yeah. Yeah, back to Portugal, please.

Thank you very much for giving me the opportunity to reply immediately. I believe that the way you are addressing this, it's correct, but the text, for instance, in paragraph three, it refers to domestic disputes, and we don't have in the text, for instance, no other reference to prevention of tax disputes. and I believe that probably this is why we are reading the various paragraph two and paragraph three as we are reading. It's the -- because the reference there, it's directly connected with domestic and that's why we -- if it was to be in a different way, surely, Khalid, that we would agree with you.

Thank you, Portugal. India, please.

Thank you, Chair. On Article 10 specifically, we voice our support to the Africa group's proposal on the wording of Article 10. We support that paragraph one should be reworded to make it sound like a commitment, and therefore we welcome the inclusion of the phrase commit to implement in this paragraph. In paragraph two and three, we support their proposal to include both of these paragraphs into a single paragraph. For paragraph three, we support the deletion of the phrase domestic and also the deletion of the end phrase that is for both taxpayers and tax authorities involved. We don't think that this adds much value once we have already defined that disputes will be resolved in a timely manner. This is for Article 10. Coming to the two examples that were discussed yesterday, we agree with the distinguished delegate of China that the second article for us, we think that this is purely a domestic issue and therefore should not be part of Article 10. If however, like it was explained some time back that the intent is to include some like give some space for the operationalization of legislation and others related to domestic tax disputes. If that is the intent behind the inclusion of the term tax disputes in Article 10, that is para 2 and 3, then we think that we probably need to deliberate upon a better language to bring that out. As it stands right now, we feel that this might, this would not serve the purpose that we are intending to go forward with. Thank you, Jay.

Thank you, India. Mexico, please.

Thank you very much. Good morning. Independently that in the next sessions we can go back to these important matters. Just to mention this first comment that according the essence of Article 10, this commitment establishes that States parties must seek to minimize the potential for disputes by providing clear and accessible legislation, as well as interpretative guidance regarding tax obligation. And it also seeks to ensure that the States parties implement fair, independent, accessible, and effective national dispute resolution mechanisms. to resolve disputes in a timely manner for both taxpayers and the authorities involved. In that sense, just to mention that we, in our opinion, we agree that the commitments proposed approach on first developing a comprehensive catalogue of mechanisms for the prevention and resolution of tax disputes and identify the essential mechanisms that the protocol will include which should be available for use. In that sense, we believe that these mechanisms must be not exactly an obligation and must be link only to disputes, border disputes, border differences. Exactly. Thank you very much.

Thank you, Mexico. Sweden, please.

Thank you, Chair. We think that this is also very important provisions that we sort of in general can be supportive of. However, we also share the same concern as I think expressed by different countries like China and also recently India that when it comes to domestic dispute resolution, we think that it's is something where it's difficult to have some kind of commitment. I think that it's also, as was presented in examples, that is something that we would not think would be something that could fall under this article. For us, domestic When we talk about domestic dispute and cross-border disputes, I mean, of course there could be cross-border disputes that are domestic. I think you shared were asking the question. But for us, we need the sort of legal instrument that is sitting in the bottom of it, for example, a tax treaty. So there will be what we are thinking about here is tax disputes between, that occurs between states or jurisdictions. And if you're going to do something sort of on the domestic side, as you were saying, best practices, I think we have to be very careful about how we would draft that language so we will not interfere with sort of domestic legislation, I mean, you can mean different things by best practices, but I think the example and the way it's worded here is something we would have difficulties to support. Thank you so much.

Thank you. The Kingdom of the Netherlands, please.

Thank you, Chair, and thank you for the Secretariat for the examples. provided yesterday and for drafting the text of this article. I do understand the concerns that have been raised by various delegations before me, especially in relation to the examples that have been given, and that brings us to the following point that we have been raising also with relation to other articles, is that this article might be formulated too specifically and could be brought to a more high level. Having said that, we do think that there is merit in sharing best practices also related to cross-border, non-cross-border tax disputes, but also just national disputes. and that doesn't interfere with national sovereignty per se. But I also agree with Sweden that it needs to be formulated in such a way, in such a broad and high level way so that everyone can agree in a later stage upon which mechanisms they would like to bring under this commitment and how to fulfil this commitment. Thank you.

Thank you. Netherlands, Spain, please.

Hi, good morning. No microphone. Thank you for the clarifications which were given with regards to Article 10 and Article 20. we would like to have a text for Article 20 and thereby see how they are interlinked. Now, on Article 10, as mentioned by other colleagues, we think it's very important to have dispute mechanisms. This affects investments, it affects companies, and therefore we need to have in Article within the Framework Convention. As also noted by other countries, the term "domestic" is problematic and it will generate confusion. We are speaking of a treaty and therefore it should refer to cross-border topics. rather than domestic issues.

That's all I want to say. Thank you.

Thank you, Spain. Bangladesh, please.

Thank you, Chair and distinguished colleagues.

To reduce debt disputes, we have already enacted.

Order and act in our income tax ordinance that is called ADR, alternative dispute resolutions.

But for cross-border dispute of tax disputes, we still working about it. But Bangladesh think we need avoid costly.

Arbitration protect legal sovereignty and budget constraints we think we need meditation and consultation.

First so we think dispute resolution must be fair accessible and respect national sovereignty thank you.

Thank you Bangladesh we have Brazil, please.

Thank you, Chair. With respect to Article 10, Brazil supports the objective of promoting effective prevention and resolution of cross-border tax disputes. We concur with the need of clarity in terms of scope. Thank you for the explanations provided. Regarding paragraph one, we agree with the African group and with what India just said about that it sounds more like a commitment than simple recognition. Regarding paragraph two and three, we agree with the proposal of merging this paragraph on paragraph three we agree with the deletion of the domestic the word domestic um as well as with the deletion of the the the ending words um for both taxpayers and the tax authorities involved uh as this part doesn't seem to add very much uh to the intent of this provision uh regarding the examples provided yesterday um the second example also seemed more like domestic matter and if the intent is to give only guidance to these kind of matters maybe it would be clearer and in this context we recall we reinforce what we said yesterday about the, it's for consideration that it would, could be appropriate to bring some questions, some issues about the structure and institutional arrangements for the UN to support this tax dispute matters at the framework convention level. So thank you, Chair.

Thank you, Brazil. Italy, please.

Thank you, Chair. Good morning, everyone. We thank the Chair, the Colleague and the Secretariat for the drafting of this article. We respect to, well, Firstly, to have a clearer picture, I guess we will wait for Article also to see the text of Article 20, so to have a better picture of the interaction and the different scope of the different articles. And with respect to Article 10, we also think that probably Article 1 looks more like a preamble language, so it would probably go in the preamble section. And we appreciate paragraph, the reference in paragraph two to the prevention aspect of tax dispute, which is for us as important as the resolution aspect. However, we have some, we think that it could, both paragraph two and paragraph three could benefit of a refinement in the wording, so to give a clearer link to the work we in protocol two. And one last think, I guess, yes, if we want to provide the, I guess, the examples we were provided and for which we thank you for on Article 10, we still think the second one, as some other previous delegates have mentioned, is a little bit problematic. I thank you for your attention.

Thank you, Italy. Morocco, please.

Thank you very much, Chair, colleague, for the opportunity. First of all, I would like to lend my support to the intervention from Zambia on behalf of the African group and to redraft the article in a way that we think would provide more clarity and Secondly, for the third paragraph, in our understanding, it shouldn't apply to domestic disputes, but should address domestic mechanisms to address domestic mechanisms to apply to cross-border disputes. This is my understanding. And what leads me to this understanding is at the end of the paragraph, we say the tax authorities involved. which means two or more authorities involved, while in pure domestic disputes we have one authority that is involved. But for the sake of clarity, we prefer to delete domestic because we agree that it is wider and it encompasses both cross-border and domestic mechanisms. Thank you.

Thank you, Morocco. Jamaica, please.

Oh, thank you, thank you, co-lead. In respect, and I'm speaking now in capacity of the delegate from Jamaica, not as co-lead of workstream three. In relation to paragraph one, we're fine with the wording there, as we are with paragraph two. When it comes to paragraph three, co-lead, our position is that we believe that there is room for the recognition that domestic dispute resolution mechanisms can be very helpful, particularly for states that do not have a wide treaty network and a large international tax footprint. Sometimes I'm confused in this forum when we use the term domestic resource mobilization, what we're really talking about, because for many countries, for small countries like mine, the major form of revenue is not cross-border taxes. It is value-added taxes. Those are the taxes that form a very large part of our tax to GDP. And those are the taxes that more than likely we will be relying on in terms of, you know, this sustainable, achieving the sustainable development or sustainability on a whole. And so our position as it relates to paragraph three, and having regard to the fact that smaller states, some do not have a corporate tax system, they don't have a large international tax footprint, then I think it would be useful for a statement recognizing the fact that nevertheless you will have domestic tax disputes and that perhaps this framework convention could be useful in countries in those positions optimizing their domestic dispute framework.

Thank you, Jamaica. Poland, please.

Thank you, Chair. First of all, I would like to thank you for the preparation and the explanation. of the meaning of this article. We would like to support the objective of having effective mechanism for prevention and resolution of cross-border disputes. I believe that the reference to the effective measures is a good solution here since, as we all know, there is a discussion about the mutual agreement procedures versus arbitration, which is in fact now the formally this effective measure to solve disputes, cross-border tax disputes, much more effective at least than the mutual agreement procedure. Nevertheless, I would like to share also some concerns of the distinguished delegates concerning the domestic disputes. First of all, these are different disputes than the cross-border disputes. Cross-border disputes are mainly disputes between contracting states. So, and what we want to achieve in these disputes, in these procedures is mainly elimination of double taxation. Of course, there are some other issues, but this is the main goal, to eliminate double taxation. Very often it means that the disputes between taxpayer and one of these contracting states on the local level, domestic level, has already been finalized. and even if they have been finalized, it still can create the possibility for double taxation and the need to resolve disputes on the cross-border taxation. So that's why I think here if we refer to these two different type of disputes in this article, we are not precise enough and I believe that the resolution of the domestic disputes is fully in the hands of the contracting states and its domestic policy, especially that this paragraph three is very general. I understand it is only kind of the direction, but I wonder who will decide or whatever in the future who will be responsible for saying that what mechanism are fair, independent, accessible of the resolution of the domestic dispute. That's why I would prefer to focus in this article on cross-border disputes resolution, which is the most important element in the context of this convention, which is about international tax cooperation. Thank you very much.

Thank you, Poland. Nigeria, please.

Thank you.

Thank you very much, Chair. Nigeria would like to align with the position canvassed by Zambia, both on behalf of the African group and of itself, particularly the proposed redraft to reflect the aspirations or what represents our view of the aspirations of this article. So we are adding our voice to the proposed amendments by Zambia. We would also like to share, express that we share the concerns expressed by the issue of the word domestic and tax sovereignty in paragraph three as we believe that the commitment expected of members in article 10 based on the terms of reference is to take action to better dispute resolution generally and as such it must be given the widest possible scope since the terms of reference only speaks of tax dispute without classifying it into either cross-border or domestic. So we believe that this should be reflected in the final text. Thank you very much for the opportunity.

Thank you, Nigeria.

Algeria, please.

Thank you, Chair. First and foremost, as this is my first statement in this session, I would like to thank the Secretariat and all of the delegates for the work that's been done so far. And also, thank you for organizing this session here in Kenya. Regarding Article 10, we align ourselves with the statement made by Zambia on behalf of the Africa Group. And regarding the proposals made on the modification of the article in a national capacity, we would like to share some comments. Algeria fully supports the high level commitment regarding the importance of having tax certainty and legal certainty for investment in order to support economic development and provide certainty and safeguards for the taxpayer. When it comes to legal certainty and the certainty we can provide, and we read Article 10 in parallel, and the reactions from all of the delegates this morning indicates that there is a shadow zone. We need to remove any ambiguity which could arise in the implementation of Article 10, and in our view, Article 10, in its title, should be more precise. This is an article which will not apply to domestic disputes that fall under state sovereignty. Thank you.

Thank you. Ogier, Kenya, please.

Thank you, Chair, for the opportunity once again. I would wish to start by taking cognizant of the words and language as captured under the terms of reference that gives us guidance under paragraph 10F which speaks to effective prevention and resolution of tax disputes. when you look at that statement, it, it, it is broad enough to, to cover quite a number of things under tax disputes. And that is why we do align ourselves with the statements that were read by Zambia on behalf of the African group. Which if you look at them, they speak to what has been listed or enumerated or captured under paragraph 10F of the, there's an element of effectiveness, prevention and resolution of broadly tax disputes. So what we need to be getting from this particular article is the broadness itself, clarity as to how the broadness of handling the tax disputes will be affected and then the simplicity of the same. Further, we do recognize that the rules that would be used to enforce will probably lie within the protocols that will come through at a later stage. And we also recognize the fact that there is work that is going on under protocol two, early protocol two on tax dispute resolution. The other bit I would wish to also thank the Secretariat for having brought in the examples that were actually listed yesterday. They brought confusion at the same time clarity because by the time we were getting the examples, I am sure quite a number of states had a position and After the examples, it brought clarity as to what we need to be addressing. The first example was the one without the borders or tax jurisdiction. The second example was between a resident entity and a tax authority. And then when you look at the interplay, as we were asked between Article 10, and 20 albeit not having the words of Article 20, you realize that there are two principles that were coming out of that. The principle, the issue of confidentiality and the issue of subject matter deliberations where the question was as to whether if an action of a particular state breaches confidentiality. And at the same time, whether the misunderstanding of a subject matter would bring in a tax dispute. But I believe that would be a discussion of a later day. So I wish to reiterate that we do align with the the drafting that had been presented by the African group through Zambia. Thank you.

Thank you, Kenya. United Republic of Tanzania, please.

Thank you, Chair.

Chair, the United Republic of Tanzania aligns with the intervention made by Zambia on behalf of the African group. We also appreciate Secretariat efforts to draft examples for better understanding of the draft proposal. However, we emphasize that the Article 10 to focus on cross-border tax disputes, consistent with international scope of this convention. We support the proposed text of the African group for paragraph two, which emphasizes on clear legislation and fair dispute resolution mechanisms that respect national sovereignty. Mr. Chair, the text on the draft Part III introduces wording that may extend it to purely domestic disputes, which risks broadening the convention scope beyond cross-border

matters.

We therefore support the use of the text proposed by the Afghan group to ensure the entire article remains limited to the cross-border tax disputes. Thank you, Chair.

Thank you, Tanzania. We have the Islamic Republic of Okay, it seems they've put down their flag. Ireland, please.

Thank you very much, Chair. Ireland would like to align its comments with those made by Poland, Germany, and Norway. Ireland supports the view that this article is critically important to support the objectives of the framework convention and to provide tax certainty. We thank the Chair and the Secretariat for the presentations and the explanations. Provided, however, we still think a further discussion on this article will be required once we see the actual text on Article 20. We agree that the references to domestic mechanisms causes confusion. We understand the explanations provided by the Secretariat and the Chair regarding the rationale for including it. However, we firmly believe that the focus of this article should be on cross-border disputes and work on enhancing domestic procedures are more appropriate to another forum. Thank you.

Thank you, Ireland. Let's see, okay. We don't have any more member states, so we can move to African, oh, Peru, please.

Thank you, Chair.

No, please, African, please wait. We have a member state, Peru. Mic to Peru, please.

Thank you, Chair, and apologies for this last minute request for the floor. We were also considering some of the things that many other delegations have been saying, including about the focus on domestic disputes for this article. This is quite important for us. And one of the other elements that we were seeing is maybe strengthening the part around prevention in this article. because para 3 seems to be a bit more developed around the mechanisms for resolutions of tax disputes, but there is also the prevention part which seems to be a bit weaker and we understand that this will be developed under the second protocol, but maybe in this umbrella framework it could be stronger. And then there is a comment that we've made several times already, which relates to para 1, which we also see as fitting probably better in a preambular paragraph. Thank you very much, Chair, and apologies again for taking the floor so late.

Thank you, Peru. We have the Islamic Republic of Iran.

Thank you, Chair.

Regarding article 10, we find the views presented by the African group to be logical and constructive and we align ourselves with the overall approach and we will share additional comments after reviewing the draft text of article 20. Thank you.

Thank you, Iran. Now African Union.

Thank you, Chair, for Getting back to us, the African Union knows the importance of tax dispute prevention and resolution in providing tax certainty, driving cross-border investment, and also in boosting domestic resource mobilization. We know, Chair, that in the terms of reference, which serve as a guidance to this work, tax disputes were mentioned in three places. Number one place, which I intend to focus on, is in paragraph 10, F of the terms of reference and he spoke to commitment. He spoke to commitment to effective prevention and resolution of tax dispute. We call delegates to note that this, the reference made here was to tax dispute, not domestic or cross-border related tax dispute, but tax dispute generally. And we think that this was not a mistake because evidence have also shown that improvement of dispute resolution generally, whether it is a domestic mechanisms or the mechanism relating to international aspect, we improve the outcomes in terms of both revenue and certainty generally. And we took a look at the MAP statistic which was released not long ago. And you will see that a good percentage of the cases resolved, we actually resolved, resulting back to domestic dispute. And we see no harm share in making general commitment to improve our tax dispute resolution mechanism, whether it be it's the one that relate to cross-border issues or even domestic issues. And as tax administrators, we also know that more often than not, these issues are straddled. And well, it is just commitment to improve your processes. Now, we note again that the other mention was with respect to the protocol. And that was, I think, in paragraph 14 of the TOR. In this sense, members have expressed overwhelming appetite to restraining the application of the mechanism that may be developed under the protocol to only cross-border dispute. And in our sense chair, we think that it is in this particular aspect that we may not start talking about scope of cases to be covered and scope of cases not to be covered. In this respect, we believe that the example eh displayed by secretariat yesterday is better contextualized in the discussion in work stream, regarding the work of work stream three and not in discussion of Article 10. The last place where dispute mechanism, dispute was mentioned is in respect of dispute resolution mechanism under the two paragraph 14. And I think that's what the Secretariat have referenced to when they spoke of Article 20. Now we have not elaborated Article 20 and we know that these articles cannot be read independent of each other, but we can focus on making best of the ones we have in our face right now. And when we get to Article 20, if we have needs to come back to Article 10, we can always come back to Article 10. But in summary, Chair, we believe that the draft supplied by Zambia delegates on behalf of the African group is suited to to actually meet both the spirit and aspiration of this article as anticipated by paragraph 10 of the TOR. We thank you, Chair.

Thank you, AU. BCAS, please.

Thank you, Koli. Indeed an interesting discussion and interesting confusion, so to say. First the basics. it is understood that framework convention is an umbrella agreement and the articles of the convention will provide a foundation to the respective protocols. By that logic, we need a foundation for protocol two, which will deal with dispute resolution. And as it's explained, article 10 is expected to be that foundation which will give birth to the protocol. Now, the lot of the confusion here in the room appears to be how do you interpret the words domestic dispute resolution mechanism. The word domestic, does it go with dispute or does it go with resolution mechanism? In other words, should the dispute be domestic or should the resolution mechanism be domestic? So the word dispute domestic resolution mechanism can be read in two ways. Maybe that could be one of the reasons why which there is a confusion. When we look at from the perspective of the co-lead and the examples which were given, this example given on Article 9 dispute and which is stated to be covered by Article 10 and Article 9 dispute related to transfer pricing can be resolved in domestic manner, under domestic law or under the tax CT by virtue of MAP. And that means in terms of the examples given MAP, which is part of a tax treaty is also a dispute domestic dispute resolution mechanism. Now that interpretation can be arrived if we take a view and then there's no need to take a view. It's, it's well understood that the tax treaties are assimilated in the domestic law. Some countries would pass a specific legislation to further each tax treaty, which will be called a domestic law or some countries you know, we'll do it by way of notification, which also becomes a part of the domestic law. And going by that, M, a P, a P, a, they all become part of the domestic dispute resolution mechanism. In other words, they are all domestic resolution mechanisms. So this was on the word, uh, I mean, the confusion arising with, uh, domestic dispute resolution mechanism. I also have certain other comments in para two, The word timely is missing. Well, after passing the law, it's important that the government comes up with a clear and accessible legislation and interpretive guidance, but it should be given timely. At times, depending on the urgency, the laws may be passed in an urgent manner, in a hasty manner, but the government doesn't come with adequate clarification. If the government takes a view that, well, that the courts decide this matter, That's not good for anyone. That really aggravates the disputes. Also, the time between the law is passed and the law is implemented, there should be sufficient time for the taxpayers, for the MNEs, for the individuals to understand what the law is and how does it work. So the time gap between passing the law and implementation is adequate. Yesterday I made comments about the preamble type statements which are there in each of this. So I don't want to repeat it, but I would say this is important to retain those sentences. I would repeat the comment that we may want to remove the word taxpayer, which I had done yesterday or day before, because if a person is getting taxed for the first time, one may not want to call it a taxpayer. Now having said that, what term which we use in this para, could be complicated. Maybe we can use the word aggrieved person instead of a taxpayer. When we talk about para three and there's a commitment for a fair, independent, accessible resolution mechanism, are we looking at any peer review kind of a thing when gradually some committee or some group of countries would look at each of these legislations, each of these mechanisms and will come to a conclusion? There were also comments made on whether this is becoming a sovereignty issue when one talks about the domestic mechanism. I would say maybe not because all that the countries are committing here is and it will strive to implement fair, independent, effective resolution in a timely manner. I mean, I would not say that this is kind of anyway interfering with the sovereignty of any country. Thank you.

Thank you, BCS Education International.

Thank you, colleagues and chair, for the opportunity to speak. My name is Robert Mwalhe from the Center for Trade Policy and Development in Zambia. I will be speaking on behalf of Tax and Education Alliance, International Education, as well as the African CSO working group on the tax conversion. Distinguished delegates, the African civil society working group appreciates the intent of Article 10, however, we note with concern that its current formulation remains unclear and potentially overlapping with Article 20 as well as Protocol 2. it is not evident which types of dispute the article seek to address between whom and on what legal basis nor why particular emphasis has been given to dispute related to cross-border trade and investment this ambiguity risk creating duplications and legal uncertainty within the framework conversion in our view The UN tax conversion at Article 10 should primarily focus on preventing dispute from arising by strengthening cooperation and enhancing transparency, which must include automatic exchange of information, mandatory country to country reporting, making public beneficial ownership registers, making beneficial ownership registers public, and ultimately the implementation of the global asset registers among the member state. We recognize also the importance of effective dispute resolutions, but we are cautious about the introduction of an arbitration style obligation within Article 10. Experience from existing international framework such as the investment treaty arbitration as well as the investor state dispute settlement has demonstrated that such mechanisms can be extremely costly, unpredictable and sovereignty straining for developing countries. Furthermore, arbitration cases cost governments in Africa and in Latin America tens to hundreds of millions of dollars in legal fees and awards, which diverts scarce public resources from essential development priorities such as education, health and infrastructure development. Moreover, arbitration often lacks transparency, it limits states policy space, and provides little opportunity for equitable participation for developing countries administrations. For this reason, we recommend that Article 10 be clearly delineated from Article 20, limiting its scope to dispute prevention, including transparency and fair and effective tax rules, as well as the more practical accountability. All provisions relating to dispute resolutions should fall exclusively under Article 20, which can provide a coherent state to state mechanism grounded in inclusivity and mutual respect for sovereignty. In incest chair, Article 10 should promote prevention rather than parallel arbitration, ensuring that the UN tax conversion remains a tool for fairness, cooperation and sustainable international tax governance. Thank you once more, Chair and colleague, for the opportunity to speak.

Thank you, EI. Femnet, please.

Thank you, Chair. Distinguished state representatives, stakeholders, my name is Juncynthia Okello. speaking on behalf of the African Women's Development and Communications Network, FemNet, the Pan-African Lawyers Union, and the African Civil Society Working Group on the UN Tax Convention. As we delve into the gist of Article 10, it seems the role of this article in relation to Article 20 and the second protocol is still unclear. We are cautious of the scope, legal basis, and the added value of this article. When speaking of prevention and resolution of tax disputes, we would like to emphasize that prevention is just as important as resolution, if not more. And so to prevent tax disputes, we should prioritize clarity, transparency, cooperation, and most importantly, good faith in these negotiations. Prevention of tax disputes is far more efficient and equitable than resolving them after the fact, especially for developing countries that often lack the resources to engage in long, complex international tax battles. We reiterate the statements that we have made in the past few days as civil society, that effective exchange of information and public country-by-country reporting is indeed one of the best ways to prevent disputes. Further, resolving information asymmetries and moving away from highly complex international tax principles such as the application of the arm's length principle will help to reduce the disputes. Indeed, a look at the OECD statistics on mutual agreement procedure will show that a significant percentage of cross-border tax disputes originate from transfer pricing. Clarity, simplicity and balance in international tax rules will help to eliminate ambiguity, which more often than not breeds disputes. Overall, during this process, Chair, we need to establish an inclusive, fair, transparent, efficient, equitable and effective international tax system for sustainable development with a view to enhancing the legitimacy, certainty, resilience and fairness of the international tax rules. I thank you for the opportunity to speak, Chair.

Thank you, Fimnet. Etaph, please.

Thank you, Chair. Good morning, colleagues. Good morning, delegates. First and foremost, we want to start by acknowledging and appreciating the significance of-- I mean, the importance of dispute prevention and resolution. It is quite critical that as countries obviously enhance their capacities for domestic resource mobilization capacities, and of course build more capacity in audit and enforcement, what's going to happen and what we've seen is actually increase in disputes. To promote tax certainty and of course enhance cross-border investment, it is important to think about capacities to prevent these kind of disputes and of course to resolve them in a fair way. And that's why we strongly appreciate and commend the work of the UN, of course, in having this kind of article in the framework convention. Having said that, turning to the terms of reference, it is very clear that the terms of reference provide the commitment to have effective measures to prevent and also resolve disputes. And so there is a broad commitment that is expected from us, and therefore the conversation we are having here is actually coming from that terms of reference. And so in this article, we need to reflect that the aspiration as it is in the terms of reference. And so we want to align our comments with the submission made by Zambia and supported by India that the revised text now provides a commitment to state parties to ensure that they implement effective measures to prevent and resolve tax disputes. That's in paragraph one, and of course providing more guidance on how that will be done by collapsing those paragraphs two and uh two and three uh to ensure that there will be efforts being made to minimize disputes and of course to undertake appropriate measures to resolve disputes those kind of proposals we agree to and they are important in this kind of work stream. I think it's important for all of us to appreciate also domestic tax disputes are a problem to many jurisdictions for reasons I explained. It's not just cross-border which is a problem. There are also significant domestic tax disputes and of course having an opportunity to think about best practices and of course parties committing to improve their measures, that is something which will go a long way in providing the necessary capacity to jurisdiction. we strongly believe when we go to the protocol conversation then these commitments that are being reflected now in Article 10 then they can be operationalized in a little bit more context including focusing on some of the clear measures to address the significant issues. I submit.

Thank you. South Centre please.

Thank you, Chair. South Centre welcomes the inclusion of Article 10 on prevention and resolution of disputes. This article is essential in promoting fairness and certainty in international tax cooperation. Many developing countries continue to face cross-border tax disputes without access to fair, timely, and cost-effective mechanisms for prevention and resolution of disputes. We appreciate the examples that were shared and they demonstrate the range of disputes that could fall under this article and cross-border dispute can benefit from international cooperation and coordination between states. So that said, it's important to have clear guidance and scope as already highlighted by a number of countries. So we would support efforts maybe to clarify further on what Article 10 covers. Thank you very much.

Thank you, Staff Centre. We'll take, give ourselves a 15 minute break and then we'll come back and continue. Thank you. Oh, it's...

Hello, welcome back after the break. We have just one request for the floor from one of the stakeholders. After that, we are gonna have like open discussion about any other topics that need to be raised because by this we reach like the end of the tickets that was proposed to or intended to be discussed in this session which is article 10. So after that we have a little bit of open discussions. But first let's take the we have okay so but okay India it's if the comment is on article 10 keep your flag raised if it's on other topics so we'll come to it later so now we will take the last stakeholder. Can you please go ahead?

So, OHCHR, please.

Thank you very much for the floor. Atia Wares, UN independent expert on foreign debt and international financial obligations. I've been listening very clearly to the discussions on Article 10, and I have to say that, so, I haven't got the exact text in my mind on how we would make adjustments, but what I see is that it should cover both prevention and resolution, but there is a confusion in the paragraphs between when we are covering prevention, which is where I hear all the other inputs that are coming in on issues of prevention, and then there's the conversation on resolution, which is also coming out from different sets of stakeholders. So what I'd like to suggest for consideration is to have two separate paragraphs, one paragraph that will look at prevention and prevention-related issues and the second paragraph will then look at resolution and those related issues. And I think that what is really useful, I'm in agreement that this is supposed to be an umbrella agreement, so it's really important that the umbrella agreement is set in place before we look at the protocol. So while I appreciate that working parties are mentioning what they're going to be working on in the protocol, the protocol can only take its source from the actual clause that will be in the treaty. So this, I think, needs to be really carefully crafted. and when we come into it under international law, there are already methodologies of dispute resolution, there's been global capacity building across different stakeholder groups, and I think it's very critical to ensure that we put the manner in which disputes are resolved at domestic level in their order of priority when we are looking at resolution. So tax tribunals in some countries, negotiations in others, going into court systems and then moving on into other types of dispute resolution mechanisms. And I think it's really important that this is categorised and then when you come back into the issue of the types of tax disputes, you will have, I think, a better chance of clarity. I am happy to come back later and help with the crafting of this particular clause with my suggestions, which I will put into my submission. I think the one thing under international mechanisms which is quite important is that under international law, many of the other treaties have a clause that says exhaustion of domestic remedies. I think language like that will become very useful. The challenge that I see facing the clause on paragraph 3 on domestic dispute resolution mechanisms is also a question of where we put commas. I think putting to implement domestic dispute resolution mechanisms, comma, that are fair, may add some element of clarity. These are just suggestions which I hope will be useful for the committee. Thank you very much for your time.

Thank you.

So we don't see any other requests for the floor on the topic of Article 10. So as we still have some time, I think we have like 35 minutes till the break, so and as there our agenda on the first day that in case we are ahead of our schedule, then we can open the floor for any topics from any member state who would like to raise any of the topics to discuss it or reopen it or talk about it again. So now I'm opening the floor for any topics regarding all what we discussed in the last three days. If anyone would like to raise any of this. The floor to the distinguished delegate of India, please.

Thank you, Chair. Our intervention is on a limited point on the topic that we have discussed earlier this week on the illicit financial flows, which we termed as a definition is an elephant in the room. So we would like to draw the attention of the Chair and Member States in this regard to the Sustainable Development Goals 2030. The United Nations has a formal statistical definition of the illicit financial flows, and it includes a specific category of illicit financial flows related to tax as well. So let me draw the attention of the member states to a brief background on this topic. The UN General Assembly gave the mandate of developing sustainable development goal indicators to UN Statistical Commission through a UN General Assembly resolution. The sustainable development goals indicators are basically the indicators that are used to measure the progress on the targets under the sustainable development goal 2030. One of the indicator being illicit financial flows as per 16.4.1 indicator. So, and further two UN bodies have been appointed as custodian to develop a conceptual framework for measurement of this illicit financial flows. This document developed by these bodies was also endorsed later by the UN Statistical Commission in its 53rd session. And this definition includes tax avoidance being recognized as an illicit financial flow. So this thus broadly the UN and the member states have recognized under the SDG framework that illicit flows can also be generated from legal economic activities through aggressive tax avoidance. This can take place through manipulation of transfer pricing, strategic location of debt and intellectual property, tax treaty shopping and use of hybrid instruments and entities, so on and so forth. So in this regard, India likes to put it, point out there that a good starting point for defining illicit financial flows is the conceptual framework for measurement of illicit financial flows developed by UN. Thank you.

Thank you. So any of the member states would like to reflect on the point raised by India or even raise a new point? You are welcome to please raise your flag. Distinguished delegate of Bahamas, please.

Thank you. Just on that point that India just discussed, and I think it goes back to a point that I made when we were addressing that article, that there should be a differentiation between tax avoidance and tax evasion and illicit financial flows because of the implication of illegality when it comes to illicit financial flows and tax evasion versus tax optimization, which is what tax avoidance is, uh, we recognize that the, that all of those topics are to be covered within the convention. Uh, that wasn't the point that I was making. Uh, the point I was making is, was that maybe you would, um, seg-, separate, tax avoidance from being included in the same article as illicit financial flows and tax evasion just as we have done for harmful tax practices, which in the terms of reference, all of those terms, all four of those terms are linked together, but it was decided by the committee to pull harmful tax practices out. I take the position that tax avoidance should stand on its own because the mechanisms in which you would deal with tax avoidance, uh, might be and are likely to be completely different from that when you're talking about, uh, matters that are criminal or illegal such as illicit financial flows and tax evasion. And I, so I, I want just to make that clarity, not that we are talking about, uh, eliminating, uh, tax avoidance from the scope of the convention, but because the activities might be different when you're talking about tax avoidance, that maybe it deserves a standalone article. Thank you.

Thank you.

Thank you very much, Chairperson.

Chair, Uganda has a proposal on prevention of tax disputes.

In addition to clarifying the legislation, I think it would be helpful if.

The state parties agreed to publish decisions. Of course, in some cases, it might require anonymization, but it's helpful if one state gets to know how a certain cross-border matter was resolved so that that principle can be borrowed.

In other jurisdictions.

So we propose that we strengthen.

That aspect of resolution, prevention of tax disputes to add the component of publication of decisions in the different jurisdictions.

Thank you, Chair.

Thank you. Thank you, Mr. Gatafo Moraco.

Thank you very much for giving me the floor. I would like to seek clarification with regard to paragraph three of article 10, the one we just discussed, just finishing. If we can have it on the screen please. Paragraph three talks about improving the commitment of member states to improve domestic mechanisms to resolve cross-border disputes, or at least this is how I understand it. But if we talk about improving the commitment of states to improve, to implement domestic mechanisms to resolve cross-border disputes in, of course, independent, accessible and timely manner. So here, are we referring just to mechanisms that fall under the responsibilities of the tax administration? or would it also imply like maybe improving the laws dealing with the procedures in courts or in other committees just that, but not directly falling under the responsibilities of the tax administration. So is it only tax code? and tax administration or also other procedures in course or other. Thank you so much.

I think under the current text, as we read it, I think it can include either of them. It doesn't specify like tax administration or the side of tax policy which include laws or developing courts or whatever. So I think both of them under what we have now, the text that has been discussed, it includes both of them.

Strive.

Is it's current intention? Yes. Yeah, maybe here's a criteria that I just would like to highlight also that it's strive, that you need to try or make the best effort to improve it more than like it's not imposing that something is in specifics that you need to do, but you need to strive and try to improve. your domestic resolution mechanism. So does any other member state would like to reflect on any of the points that has been raised till now? Almost we have three points that has been raised or even to raise a new point, new question, ideas. Okay, so I don't see any requests for the floor, so as we still have some time, I think it can be good that we look at the upcoming commitments that we are going to look at and will come with the text in the next plenary, fourth plenary session in New York. And in doing this, and having the time that we have right now, I think we can move to what is coming next. And if we're going to look at the structures that we have now, I think what should be coming next is the capacity building. Given also that the capacity building topic has been raised through the last three days several times from, by many members. And everyone understands that it's, it's, I think it's, it's very important because we don't have, We don't want to have a, and like a very nice, good looking text, but it doesn't work in real life. I think what we are aiming for is to get things working in real life. So the capacity building is one of the main anchors that enables operationalization of old commitments, protocols, whatever will be agreed. I think the capacity building is essential for this. So the article for capacity building include different elements or that at least how we understand it now, different aspect, different elements that need to be very carefully drafted to make sure that it will enable the future work to be really fruitful and useful for all the member states and really result in a real change in the global landscape. So In doing this, if you allow me, we just drafted some questions about the different elements or aspects that can exist in the capacity building. And we would like to hear and just walk you through these questions and start hearing your thoughts. This will enable us to get to a better text next February in the upcoming session. that really can include what or most of what of the member states are looking for. So in doing this we're gonna have a presentation. This presentation include number of questions that we were gonna through it one by one as the time permit and looking forward for your reflection. It's informal discussion, very helpful to hear from you. because this is how we were going to take the provision of the capacity building. So if I would like to ask the Secretariat to go to the first slide. I think in the first slide, yes. this is just we are showing the structure and where we are now. So we went through all these commitments and now we are standing, we finished the prevention and resolution of tax disputes and now we are go-- moving to the next which is the capacity development and technical assistance. So this is just to show you where we are in, in the map and what we are addressing right now. The next slide please. Okay, this slide is the first question that came up from the discussions through the last three days, which I think everyone understands now that the capacity building is a cross-cutting topic across all the commitments and is needed in almost many of, if not all, the commitments. And the questions that we have right now is whether the capacity building need to be established to be developed or like we need to have it as a standalone article or provision. This is one option in which in this article it will include all the elements and reflect on all the commitments that we have in the convention or we need beside this article which is a capacity building to have also some reflections or linkage or clauses that link the articles to this standalone provision and here you will find like which just tried to draft an example, this not just an example, so do we need to go like an article 5, 6, 7 8 whatever the article is and have like a text similar to or as an example the implementation of this article for developing countries shall be supported by capacity building and technical assets. So do we need to have this clause in each of the commitments to link the capacity building article to the other articles or the article as a standalone article can be sufficient by itself if it's going to reflect that this capacity is available for all the commitments as relevant. So this is two different ways of, of, of the drafting, uh, so I, I will stop here and just would like to, to hear from, uh, from you about what do you think it should, uh, the best way it should go. As I don't have any requests from member states, so I will go for the African Union, please.

Thank you, Chair. Capacity building is very crucial for our members as developing countries. We have also seen it across several commitments and other aspects of the convention where we may require cooperation and capacity building. to ensure effective implementation of those commitments. As regard the question posed, Chair, we believe that consolidating all aspect of capacity building under this article on rule on capacity building is the best approach. It is the best approach because it helps to simplify the text of the convention itself. It also helps to put it in proper perspective in view of the guidance provided by the terms of reference. We also believe, Chair, that in elaborating article on capacity building, we must also speak to all aspect of capacity building and possibly even technical assistance, including transfer of skills, technological skills and related matters. It must be comprehensive enough to match the ambition of the discussion we had under this article concerning this article during the elaboration of the terms of reference we thank you chair thank you.

So here I'm going to take off the hat of the chair and talk on my maybe national capacity or personal capacity, whatever I'm going to name it, because my point of view on this, I think the drafting is more, I will go with African Union opinion that we should have a standalone article which covers everything without the need for having a specific ticket under each clause or under each provision mentioning that this requires capacity building. The capacity building article should be very comprehensive and cover every aspect in the convention without need to have this under each of the clauses or the provisions. This allows more flexibility, more freedom for the COP when it comes to just find the relevant areas in which they need to invest in the capacity building and to direct efforts to, so this is the point in which how I see it, but like we have Zambia, so let's listen to Zambia. Zambia, please.

Thank you, Chair. Speaking on behalf of Zambia, I fully concur with your position and also the African Union. It is our view that For it to be neat and comprehensive, I think we need a standalone article to deal with capacity building so that everything that relates to capacity building is all encompassed in one article. I think it'd be more comprehensive and it'd lead to more coordination because the guidance and the commitments will be in one article. So that's our position and we fully concur with yourselves and the African Union, thank you.

Thank you. The United Kingdom.

Thank you, Chair. We must ensure the commitments reflect the circumstances of lower capacity jurisdictions. Developing countries have been clear that they want scaled up, demand driven support to help strengthen tax and public finance systems. To which end the UK has expanded its peer-to-peer offer and continues to support multilaterals with their work in this area. Any new initiative should come hand in hand with predictable support, targeted capacity building and peer-to-peer exchange. We haven't drafted any specific textual suggestions yet, but we agree with you, Chair, on the importance of capacity building to everything else. We think it would be worth retaining capacity building as a separate article and to, at a minimum, have a commitment from all parties to offer technical assistance, capacity building to other jurisdictions based on their resources and expertise.

Thank you. Thank you. Distinguished delegate of Jamaica.

Thank you, Chair. We support your intervention and Zambia's and and ATAF in relation to capacity building being a standalone article along the lines as outlined by ATAF in terms of the various types of capacity building that may be on offer. Thank you, Chair.

Thank you, distinguished delegate of India.

Thank you, Chair. Our preliminary view on this is that we would probably prefer option number two, which is to integrate specific clauses in each substantive articles. I think it takes care of the fact that then we can tailor make each article to indicate the importance of capacity building. Our only suggestion in this regard is that if we do include and if we do go ahead with the second option, then the term developing countries should be replaced by countries to mean any country who might need such technical assistance and capacity building. Thank you, Chair.

Thank you, noted. But anyway, this is not the tickets that will go like it was just overnight. I was just trying to give an example. So it's not this is not the text, but your point is noted, of course. Thank you. The Swedish.

Thank you very much, Chair. We think this is an extremely important commitment, or maybe it's not already commitment, but provision where we also I think at least preliminary would support your views here, Chair. I mean, we have done capacity building for Sweden has for 40 years, so it goes maybe longer back than for most other countries. And also our experience in particular from doing it on the African continent is that the needs are very different. So therefore, I think it's to be more helpful, I would assume that maybe it would be better, as you also said, Chair, to have a stand-alone article that could be more tailor-made to specific needs because I don't think the needs are the same. Thank you so much.

Thank you. Thank you, Delegate of India. The mic to India.

Sorry, Chair, I didn't intervene actually.

Please, would you give the mic to India?

Chair, I had not intervened. I think it was some -- Oh, sorry.

So the mic to Portugal.

Thank you, Chair. In respect of the questions that we are faced now in this present moment, you will understand if I say that I don't have an opinion. I should have a kind of a hint or a feeling. In my interpretation, the question is if we should have a standalone article dedicated to capacity building and technical assistance or if we should have a standalone article dedicated to capacity building and technical assistance complemented with specific mention in some articles that we feel that deserve or call for that specificity. And my feeling is that probably we would fill the need to the second option, but not with this kind of drafting, meaning that recalling what was said as a general remark this morning by our colleague of Workstream 1, we believe that the implementation will not be of the article of the commitment, we will have capacity building to the implementation of what will be the obligations based on the commitment, not the article of commitment itself. And and I believe that the capacity building will be directed to developing countries or, as India has suggested, to some other form of defining them. And not this drafting, but the idea, we believe that probably at the end of the day we will have to take a decision on this, and I would not rule out the second option for sure. Thank you.

Thank you. Distinguished delegate of Mauritius.

Thank you, Chair. I think I would go for a separate article on capacity building, which is an important aspect that we need to consider. Like Zambia said, it would be needed to have a separate article rather than having the issue of capacity building scattered through the Convention. That said, I think we also need to think about the audience that we need to touch on. It's going to be quite a wide audience. So with wide audiences, so the mode of delivery becomes important. Here, I think the UN already have some electronic means of delivering capacity building initiatives. So I think we could also take advantage of such platform in terms of delivery of capacity building programmes. Thank you.

Thank you. Here I would like to say it again that the two options we are comparing between that to have a standalone article including everything and covering all the commitments or still second option is having this standalone article including all the elements complemented by clauses in each article that needs the capacity building. So in all cases we will have a stand alone provision or article for the capacity building, but do we still need to have again clauses in each article stating that this area requires capacity building and development? So this is the two options, because We can't go for having the capacity building just in each article because there is some aspects that it's very difficult to just keep repeating it in each article, like how it would be founded, the formation of the criteria, the role of the criteria, things that we come across right now and we can't go and keep repeating it in each article. So the two options again is having a standalone article complemented with clauses in each relevant article in each relevant commitment or no it's enough to have it as a stand alone and then it will be covering every aspect and all the commitments in the convention. Thank you. Distinguished delegate of Sierra Leone.

Thank you, Chair. I speak on behalf of Sierra Leone. I want to register Sierra Leone's perspective on this particular issue and also want to support the statements made by Zambia on behalf of the African group. From Sierra Leone's perspective, capacity building should indeed be treated as a stand-alone article within international tax instruments such as the United Nations Convention on International Tax Cooperation. As a developing country with evolving tax systems and administrative structures, Sierra Leone recognizes that effective participation in global tax cooperation depends not only on adopting international standards, but also on having the institutional, technical, and human resource capacity to implement them. A dedicated article on capacity building would help ensure that commitment towards technical assistance, training, and knowledge exchange are given equal weight alongside substantive tax rules. For Sierra Leone, this is critical because limited expertise in complex areas such as transfer pricing, treaty negotiation, digital taxation and dispute resolution often constrains the country's ability to fully benefit from global tax reforms. Such an article could establish clear obligations for developed countries and international organizations to provide sustained and coordinated support tailored to national needs. It could also promote peer learning among developing countries, encourage data sharing, and enhance the domestic resource mobilization agenda under Sierra Leone's medium-term national development plan. CI will therefore advocate for capacity building to be recognized not merely as a cost cutting issue but as a binding and operational component of international tax Corporation this would Empower tax administrations to implement Global standards effectively strengthening compliance and ensure a fair contribution of taxing rights and revenues in line with countries development priorities thank you chair.

Thank you. As we are left with few minutes, so we will take one additional intervention from member states and we have a good list of interventions that we're gonna continue this list tomorrow morning because this afternoon is a closed session. So now we will take our last intervention because after, afterword we will lose interpretation then we will we will take note of of the of all the flags raised and we will give the floor tomorrow morning. So now to distinguished delegate of Bahamas.

Thank you, Mr. Chair. The Bahamas would support the position just provided by Sierra Leone. We support a standalone article with respect to capacity building. We think that if you took the position of the second option, you might run the risk of narrowing capacity building in only specific areas within the Convention. As a small island developing state, and I'm sure many of my small developing colleagues would agree, The area of taxation is very complex and we have very, very limited, uh, human capacity to develop, uh, the expertise needed to run effective, um, domestic, uh, tax departments and to be able to understand the, uh, rapidly evolving tax policy, uh, in the world today. Uh, and therefore the, the need for capacity building for small island developing states is, is fundamental, and all-encompassing of, of all of the topics within this convention and more. Uh, and so we would support, uh, the first option, a dedicated standalone, uh, capacity building and technical assistance, uh, article, uh, one that is as wide as possible and one that looks, uh, really to many of the developed countries who have met, had many years of developing tax expertise, uh, with significant amount of capacity to lend their support, to small developing countries like the Bahamas in order to be able to properly comply with the convention and to be able to have the domestic resources needed to do so. Thank you, Mr. Chair.

Thank you very much. We will resume the floor tomorrow morning. And now I think it's time for lunch break. Wish you good time in the lunch break. Looking forward to see member states this afternoon at three o'clock in the same room. Thank you.