(3rd meeting) Intergovernmental Negotiating Committee on the United Nations Framework Convention on International Tax Cooperation General Assembly Date: 4 February 2025 Language: English Transcript: https://transcripts.un.org/en/asset/k1p/k1pyc5zruj 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. --- Chair [26:53]: Good morning, everyone. The third meeting of the committee is called to order. I will begin today's session by revisiting agenda item three. titled organizational matters for discussion. Although it is not customary to revisit something that the committee has had an opportunity to discuss already, I feel it's necessary to do so based on oral requests I have received from some member states. They are seeking clarifications regarding the new committee process and did not realize that item three, org matters, was the appropriate time to raise those questions. As we engage in the negotiations in good faith, I have chosen to reopen the discussions to give Member States the opportunity to seek clarifications. I understand that some of your inquiries may not have immediate answer, but they will certainly assess the Chair, Bureau and Secretariat in understanding your thinking. So now the floor is open. Please press the microphone button, uh, if you would like to take the floor. Distinguished delegate of United Kingdom. United Kingdom of Great Britain and Northern Ireland · Delegate [28:30]: Thank you, Chair, and good morning, everyone. In the organisational session of the ad hoc committee last year, there were two annexes to the. Report of the session, one covering general modalities and one covering stakeholder participation. To support the committee to organise its work over the coming months. We would ask that, in the same way, there be two annexes and their subheadings Introduction, including decision making, outline of the work of the committee, modalities including dates and topics for discussion and tasks for the session as part of that annex to the report for this organizational session. The chair has presented a proposal for the annex on stakeholder participation. requests that the secretariat provide a draft of the annex on other modalities, structured in the same way. As annex 1 from the organisational session of the ad hoc committee last year. Including covering those proposed timings and locations. Would the secretariat be willing to present a written draft of such an annex? Finally, we request that draft documents are circulated in writing and in good time for consideration and consultation with capitals ahead of the discussion and adoption. Thank you. Chair [29:58]: Distinguished delegate of Poland. Poland · EU · Delegate [30:11]: Okay, thank you very much. I am speaking on behalf of the 27 EU Member States. First, we would like to support the United Kingdom in having a document annexed to the report of the session on organisational matters in addition to stakeholder modalities. Moving to more specific issues which should be addressed during this organisational session, the EU Member States would like to point out the following. Resolution 79/245 mandates the organizational session of this committee to address and conclude on organizational matters, including decision-making rules of the committee. It is a long-standing UN practice to strive for consensus in decision-making. The EU Member States have advocated for consensus-based decision-making process. In particular, the EU Member States believe that the Intergovernmental Negotiating Committee shall conduct its work and reach agreement on the substantive matters by consensus. As it unfortunately turned out to be a subject to debate, we believe that it would be beneficial for the entire UN membership to hear from the UN Secretariat what consensus mean in US process in practical terms. We would kindly ask the Secretariat to elaborate on this topic. Moreover, as we often refer to efforts to reach consensus, we would also like to hear on how, when and who will decide in this committee whether every effort has been exhausted to reach consensus. Apart from the decision-making modality, we expect this organizational session to decide first and foremost on the concrete organizational matters, the way this committee is going to work in the months and years to come. The issues are, for example, how and when are the dates and locations of the meetings be decided? How do we set up work streams on each protocols? How do we negotiate? Do we agree to work on the complied documents? Who is in charge of complying the documents? How does the UN Secretariat provide substantive technical support to the Committee? What are the modalities of impact assessment for the Protocols and the Convention? What are the rules for circulation of the documents to the Member States? How are the readings of the text organized? How can the Member States provide input to the document? For example, can Member States transmit non-papers to be published on the website? How are intersessional meetings organized? And will it be ensured that the documents are properly translated in time in the UN official languages? These are fundamental questions that will provide clarity to all delegations on what their purpose is in this committee and how to prepare for the meetings accordingly. Setting such issues is also necessary to make sure that this committee is right on track with sound procedures. We believe that the Chair, supported by the Bureau and the UN Secretariat, should provide a written draft roadmap and working methods which would guide our negotiations. That will bring clarity to the process. Thank you very much. Chair [34:05]: Thanks, Poland. Distinguished delegate of Norway. Norway · Delegate [34:11]: Thank you, Chair, and good morning to all. We would like to support the suggestion by the UK that there be an annex to the report from this organizational session that addresses the modalities under which this committee will work. And for that purpose, I think we would also support the EU in providing clarity on the procedures and this question raised in the EU. Intervention here, I think it would bring clarity to all. We have a specific proposal as regards the decision making structure that we will work under in this negotiations. It's a proposal that we will provide in writing and it's presented by Norway and Mexico. And if you like, I can read the proposal. I'm asking for your, would you like me to read it, Chair? Chair [35:19]: Yes, please. Speaker 8 [35:20]: Yes. Norway · Delegate [35:22]: And it would read like this. The intergovernmental negotiating committee on the United Nations Framework Convention on International Tax Cooperation, one, decides that the committee shall exhaust every effort in good faith to reach agreement on matters of substance by consensus. Two, also decides that whereby the chair, upon the decision of the bureau, informs the committee that all efforts to reach consensus have been exhausted, decisions of the committee on matters of substance shall be taken by two thirds majority of members present and voting. 3. Further decides that decisions of the Committee on matters of procedure shall be. Taken by a majority of the members present and voting, and that if the question arises as to whether. A matter is one of procedure or of substance, the Chair of the Committee shall rule on the question. An appeal against the ruling shall be put to the vote immediately, and the chair's ruling shall stand unless overruled by a majority of the members present and voting. Thank you, Chair, and we hope that this committee will take our proposal under consideration. Thank you. Chair [37:05]: Thank you. Distinguished delegate of Sweden. Sweden · Delegate [37:13]: Thank you, Chair, for giving me the floor. Sweden aligns itself with the statement delivered by Poland on behalf of the EU member states. In my national capacity, I wish to add the following. When it comes to the programme of work, we just want to emphasise the importance of ensuring efficient use of the time these coming days. Therefore, it would be much appreciated if we could receive some clarity on how members of this committee can request, for example, briefings on different substantive matters so that we can come prepared and should not If we should be in the similar situation as yesterday when the meeting was ended earlier than we expected, so, so we don't repeat that, uh, again, we, we wasn't really prepared and, and, and it's, and we really would like to have, uh, uh, some more advice on that. On organisational matters, we also support the language proposal put forward by Norway and Mexico on decision-making modalities and think that it sounds like a good basis for our continued discussion. Thank you so much, Chair. Chair [38:29]: Thank you. Next, the delegate of Nigeria. Nigeria · Delegate [38:35]: Thank you very much, Chair, and good morning. I think listening to some of the issues that have been raised by our colleagues and delegates from Poland representing the EU and then the colleague from UK, I didn't know whether the secretariat already has a presentation on these issues, which I suppose should drive the discussions, because everybody wants to have clarity as to how this meeting is going to progress so that we can maximize the time that we have. And it will be good for us to hear from the Secretariat or from the Chair how those issues have been penned down for discussion in the agenda so that we are not running this session up hazardly. And then on the second point, the issue raised by the delegates from Norway, I didn't know whether we, is something we can address on the fly. Or, uh, something that we need to, um, really have time to, to, to, to, to discuss, um, because in my view, um, if this just come in the fly, um, is, is the… we may not be able to have the opportunity to look at the issues thoroughly and then look at what solutions that will work. This is not an objection to the point raised. I'm not responding to that, but I'm just thinking that probably we are not prepared to take on that issue immediately now. But we'll need the Secretariat to also guide us on a number of those questions that have been raised first before we begin to come up with discussions and suggestions and then decisions. Thank you. Chair [40:44]: Thank you. Sanchez de Guevara. Of Mexico. Mexico · Delegate · Sanchez de Guevara [40:53]: Very good morning to you all. Good morning, Chair. Allow me first of all to congratulate you on your reelection. to guide us through this process over the next three years. Unfortunately, I was not able to be here yesterday to congratulate you, but I wanted to take the floor to begin with this positive note. I would like to support the proposal presented by Norway and to thank them for doing so. We sponsored it and we think it is a good starting point to discuss the modalities and decision-making that the Bureau will also have to take, especially because the forthcoming decisions will have a substantive impact and they should have the support of all of the members so that we can begin, as we have seen in this process and in the remarks recently made, just made by our fellow delegate from Nigeria. The decisions in relation to the terms of reference or in the second committee on tax matters have been taken very quickly and I don't think there was sufficient time for consultation. So I think, even though they were made by simple majority, we have been requesting more information and clarity over how we can make future decisions. Even though this is a short week, this is the last opportunity to address those technical matters. If there is no decision-making process that everybody agrees with, we will be undermining the democratic process and the inclusivity in the process. This is the view of Mexico, and we hope that other countries will also give this proposal, just made by Norway, due consideration. We wanted to put this on the table. This proposal is here, and we would ask delegations to take the time to consider it this week and to seek to try and find some middle ground in this so that we can move forward and have an inclusive democratic process that advocates for the needs and wants of all of the present. Thank you. Chair [43:45]: Thank you. Distinguished delegates of Canada. Canada · Delegate [43:51]: Thank you, Mr. Chair. Let me first thank you for your indulgence in returning to this agenda item, given the confusion yesterday in terms of how the matters would be taken forward during the session this week. I also support the interventions by a number of colleagues before me, in particular, We support the UK and the EU's request for greater clarity on the general modalities in terms of how work will be taken forward, in particular, specific meeting dates and how work will be taken forward between sessions. We understand that there has been some thinking that maybe there will be separate groups taking issues forward. We would like Um, a discussion of that, um, in this open session in terms of how such groups would be formed, um, who would lead, um, those groups and, and how those, um, uh, leaders, uh, would be chosen in terms of, of taking the work streams forward. We also think it is extremely important that there be an open discussion on decision-making, as it was our understanding, as read by the delegate from Poland, that that would be the subject of discussion this week. And in that respect, we very much welcome the proposal put forward by Norway and Mexico with respect to decision-making, and we think it forms a very good basis for commencing the discussions this week with respect to an ultimate decision on Thursday with respect to decision-making. Thank you. Chair [45:47]: Thank you. Sanjar Dzhigitov, Israel. Israel · Delegate · Sanjar Dzhigitov [45:52]: Thank you, Chair. Good morning, colleagues. We would like to voice our support to the UK proposal regarding the annexes. We also want to support EU's proposal regarding the roadmap, which will provide the necessary clarity. We reiterate our request for clarity regarding modalities and decision-making process. Thank you. Chair [46:17]: Distinguished delegate of Pakistan. Pakistan · Delegate [46:20]: Thank you very much, Chair. We would, on organizational matters, we do have a few queries as well, including regarding the program of work, at least for the remainder of this year. Would that be something that is discussed during the org session and the venues and dates decided, or is it something that will be taken later on in the first substantive session. So I think for us clarity would be required on the future proposed program of work for this committee, particularly for the remainder of this year. We did not take the floor yesterday, no one did, I understand, that's why the meeting was adjourned. But just to state again regarding decision making, we would appreciate, we express appreciation for the proposal put forward by Norway. It's not the first time our delegation has seen it, we saw it during the main session of the second committee. And we would just reiterate our preference for following the procedure that was followed for the TORs and for other conventions as well. I think the Convention against Corruption is one example, the process of simple majority rather than a qualified majority. So we express appreciation for the proposal. We're ready to have further discussions, but we have seen it before, we do confess. And lastly, I'm not sure when we will have substantive discussions regarding the topic of the second early protocol, but preliminarily, Chair, we would express our preference for either Um, tax dispute or for, um, high net worth individuals as the possible, uh, topic of, of the second early protocol. Uh, we, we do not support postponing this decision beyond this organizational session. We need to fulfill the mandate given to us. So for us at least, the three main issues are decision making, the topic of the second early protocol, and lastly, the program of work, at least for the remainder of the year. I understand it's difficult to craft one when we haven't decided the topic of the second protocol, but perhaps clarity on when will we be having those discussions. Thank you. Chair [48:52]: Thanks, Delegate of Singapore. Singapore · Delegate [48:57]: Thank you, Chair. As our delegation mentioned yesterday, Singapore believes that it is precisely because of the widely differing needs, circumstances and priorities of countries that we must make every effort to close areas of divergence, forge compromises and arrive at solutions that garner broad agreement, or in other words, make every effort to reach consensus. And in this vein, we thank the delegations of Norway and Mexico for their proposal advocating voting by a two-thirds majority, and which we note encourages that all efforts to achieve consensus are exhausted. At this juncture, we look forward to favorably studying this proposal. Chair, if you permit me, on the issues of road map, Um, and the program of work, we'd like to echo the calls by the representatives from the EU, Nigeria and Pakistan for more clarity on the envisioned roadmap and program of work for the rest of, uh, the term of this committee, um, the structure of the committee or committees, uh, so that we can scope our queries more specifically. Given that this endeavor will involve multiple stakeholders and agencies from each delegation, this will help us properly schedule the conflict and ensure full participation at each meeting. As the work on the proposals are expected to be technical, we are open at this stage to the idea of forming separate technical committees comprising tax officials to work on the protocols. We are also of the view that the framework convention and its protocols should not overlap as representatives, uh, could be involved in multiple meetings, and this would be a resource constraint for some of the smaller delegations present in the room. And if you will permit me, Chair, to put forward a suggestion to kickstart discussions on the roadmap development, we would also like to suggest for a separate business advisory committee to be formed to solicit feedback from businesses as any tax changes to be implemented will very likely affect them. I'm not sure if this is the right juncture to raise this or how this can be considered. And I'd be very grateful for your and the Secretariat's clarification and advice on this proposal. And lastly, not to take too much time on notifications, we would very much appreciate if documents can be circulated at least five working days in advance of the discussions to allow for more effective review by countries and for us to be able to substantively engage on proposals, ideas, particularly technical ones in this ensuing process. Thank you very much. Chair [51:48]: Thank you, United Arab, distinguished delegate of United Arab Emirates. United Arab Emirates · Delegate [51:54]: Thank you, Chair. We support the comments already made regarding the need for clarity and the need for written drafts of annexures and also the organizational matters. Like many delegations, we support, I think it was most recently Singapore, the need for a written roadmap. Again, we feel this will save time in the long run. But also, given the Bureau meeting yesterday, there were many questions that kept coming up again, which have been asked in the previous Bureau meetings, for example, around what is a closed meeting, will we have any? So, not just on the roadmap and the work of the committee, including meeting dates, but also around process and protocols, particularly around how these organizational matters will be conducted. Separately, on the comments made regarding decision making, we are open to what has been proposed by Norway and Mexico and like Nigeria, we are not against the proposal. So we would be opening, we would be open to considering such matters further at this stage of the beginning of the process to ensure the long term viability of the work of the committee. Thank you. Chair [53:04]: Thank you. Speaker 27 [53:11]: Thank you, Mr. Chair, um, we, we do see divergent views on the matter of decision making during the previous discussions or negotiations, which concerns me quite a lot, um, now we have two extremes, for one end we, we have consensus based approach, and for the other, I think the other end is the simple majority. I think to move forward, we have to meet somewhere in between, which means compromises from two different positions. In this context, we would like to support the efforts or proposal as suggested by Norway and Mexico, or any other proposal for seeking common grounds. Chair, we all understand this is a very important and urgent matter and long debating issue. But we need to move forward because, in my belief, the ultimate purpose for this convention and the relevant protocols is not only just to bring out some legal instruments stipulating new rules of taxation, but also to make sure that these rules are accepted and implemented by more Member States, the more the better. Thank you, Chair. Chair [54:41]: Thank you. Distinguished delegate of Switzerland. Switzerland · Delegate [54:48]: Good morning, distinguished colleagues. Many thanks to you, Chairman, for revisiting this important agenda item. This intervention is to lend our full support to the UK's request for an annex without prejudging any of the content of such an annex. but we think it will be very important as a base of discussion. Furthermore, we also would like to support the request delivered by Poland on behalf of the European Union, including the comprehensive list of issues on which we would also appreciate to have more clarity on our way forward. Many thanks. Chair [55:34]: Thank you. This is the representative of Australia. Australia · Delegate [55:40]: Good morning all and thank you, Chair. We would like to support the proposals by the UK for an annex and the proposal by Poland on behalf of the EU for a roadmap. We believe clarity in process will greatly assist to ensure an inclusive and constructive process that we all want to see for this undertaking. We would also like to support the proposal by Norway and Mexico to allow for consideration of decision making. Thank you. Chair [56:23]: Thank you. Thank you, Ghana. Ghana · Delegate [56:28]: Thank you very much, Chair, for giving me the floor. I would want to thank our colleagues from Mexico and Norway for this proposal. As my colleague from Pakistan had indicated earlier, this proposal is not new. We have seen it before, but we are ready to have a robust discussion on it. While we are on that topic, I just want to indicate that my delegation doesn't believe it's a good basis to begin discussions on this matter. And in the fullness of time, uh, we would be discussing it in, uh, a full and all rounded, uh, manner. I also wanted to, uh, indicate that, uh, while we're discussing these issues, uh, on decision making, it's important, uh, to bear in mind. that we have rules in place already, so we are not starting from scratch. And that's why I indicate that in the fullness of time, we would have the opportunity to debate these matters and to be able to agree on decisions that should guide the work of this committee. To reiterate again, that my delegation doesn't believe it's a good starting point for negotiations. Thank you. Chair [57:55]: Thank you, distinguished delegate of India. India · Delegate [58:00]: Thank you, Chair. We recognize the point made by the distinguished delegate of the United Kingdom. On that point, I'm looking at the report of the organizational session of the ad hoc committee, and that covered not only the points of agenda for which that organizational session had been convened, but it also contained annexes which dealt with the way forward. So as the distinguished delegate from Nigeria said, we would probably await a little more clarity from the secretariat on this so that the report that we eventually come up with deals with the matters that we have gathered here to discuss. and also as to whether we will have some clarity on the way ahead, especially on the future dates of the meeting, because it will also help us prepare and plan our work for the year. So that's something that we will await some suggestions from the Secretariat. Now on the suggestion that has been made by the distinguished delegate of Norway on the issue of decision making. Yesterday in our general statement we had stated that we are prepared to find a middle ground and yes, in the spirit of that we are open to this suggestion even if it's been heard in the past but we are prepared to consider this and with an open mind and we may have certain issues on this particular proposal which at first instance seems to make the whole suggested process a little open-ended and kind of it could lead into a cycle of things. But that's something that we can discuss. But we are open to discussing that. And we believe that probably that's where we have to give up our extreme positions and come to a middle ground and take this work forward. Thank you. Chair [1:00:10]: Thank you, the single delegate of Argentina. Argentina · Delegate [1:00:15]: Thank you very much. Chair, good morning all. It is our understanding that it is necessary to make progress with the planned agenda so that we can agree on essential issues linked to the organisational matters of this committee that will govern our work for the forthcoming years. And in this regard, we find the intervention of the United Kingdom with the support of other colleagues, especially useful. We think the annex, wherein this essential information relating to organisation, the dates of future meetings, the possibility of organising working groups and especially how decisions will be made by this group to be particularly pertinent. And so we take the view that what has been expressed by Norway and Mexico in terms of finding a sort of middle road is interesting. And so we want to say that we have followed the history of what has gone on in the past, but just like other countries, we have preferences. We intend to work exclusively under consensus. We think that that is the only way in which we can find satisfactory outcomes for all and achieve the outcomes intended by this committee. We signal that our position and preference is to be based on consensus, despite the proposal from Norway and Mexico. assess the situation and hope that a decision can be made by Thursday. Thank you. Chair [1:02:12]: Thank you. The delegation of Saudi Arabia. Saudi Arabia · Delegate [1:02:15]: Thank you, Chair. Maybe as we highlighted in our statement yesterday, we have two important issues that we need to make decision on, which is the decision making and the second topic of the protocol. I'm just mindful of the time, we have two more days to go, and I think the proposal put by Norway can serve as a good starting point for discussions. We do encourage others if they have proposals to put it on the ground so we can start deliberating on them and try to reach an agreement given the limited timeframe that we all have in here. In terms of clarity, definitely we echo the comments made by many delegations that we need further clarity on the process, especially what's next for all of us here for this year and definitely for the reminder of the program. Thank you. Chair [1:03:06]: Thank you. Jamaica. I don't know. Jamaica · Delegate [1:03:23]: Okay. All right. Thank you, Chair. And as it's our first time taking the floor, Jamaica would like to offer our heartfelt congratulations to you. as chair taking on the mantle of steering the work that will ensue over the next three years. And we also offer congratulations to the vice chairs. Chair, in relation to The issue of clarity, we join colleagues who have spoken before on the need for clarity and particularly the questions posed by Nigeria to the Secretariat on offering some guidance and their own thoughts on the direction in which this clarity could be provided. As it relates to the proposal from Norway, we believe that this proposal should be seriously considered. and that an appropriate time be allotted to consider the proposal. And we also support Pakistan's call for us to not leave this week without concrete decisions on the issues of decision making, the second early protocol, and the program of work. Finally, Chair, we also find some appeal in the intervention by Singapore on the issue of having the business business be involved in the deliberations. Thank you, Chair. Chair [1:05:02]: Thank you. Nigeria. Nigeria · Delegate [1:05:12]: Thank you very much, Chair. I think for process, Chair, I was hoping that the high table was going to intervene. to let us know whether the Secretariat will be providing us clarity on the issues that had been highlighted. If you follow the discussion, we've more or less been repeating ourselves. And again, time is no man's friend. You see that we are going to be able to have this or we are not able to, and then we can devise other ways. Instead of us having to be saying the same thing over and over again. That's number one. Number two, my earlier intervention about the proposal from Norway, what I have said is that Nigeria does not oppose it, but that does not mean that Nigeria supports it. What we are looking at is the time for that discussion is not yet in my view, unless we have clarity as to how we're going to run the rest of this session and how we are going to be able to move forward on all the issues that we should be discussing and deciding upon. Thank you. Okay. Chair [1:06:41]: Thank you all. I think I don't see any other requests for the floor. Distinguished delegate of Kenya. Kenya · Delegate [1:06:50]: Thank you, Chair. Sorry for coming in late. On the issue of decision making, we see the terms of reference as a guiding document for the next steps that we are about to embark on when it comes to developing the framework convention and its early protocols. And as such, we would favor adopting the same rules or the same process that they adopted by stating that decisions would be made by simple majority with an addition that because these are important matters that every reasonable effort would be made within the available time to seek consensus. So it's just supporting the view that we should adopt the same decision that was picked by the ad hoc committee. Thank you, Chair. Chair [1:07:38]: Thank you. Colombia · Delegate [1:07:44]: Thank you very much, Chair. Um, we are, uh, looking into the proposal that was raised by, uh, Mexico and Norway. We do appreciate, uh, that there is an effort on the table to find, um, a middle ground from our perspective. Um, the, the principle that we would, uh, follow to engage in, uh, any kind of compromise will be good faith, um, whatever, uh, methodology we're, um, we, we would assess, Uh, we'll be under the understanding that, uh, these are being put in place, uh, not to, uh, mitigate the ambition of, uh, this exercise and the outcome that we are here to design, um, to then, uh, not, uh, having a result, uh, with, um, a proper level of engagement. Uh, we would expect that if this is being considered by, uh, member states that have, um, a concern, and that are seeking for consensus, those are also ultimately taking the political stance and the will to not only engage in the procedure, but in substance and in the ultimate application of whatever we end up designing. I think therefore good faith will be a general principle to follow here. And if we are to hear that from that those interested, I think that will be important to create the assurances so that we all move in confidence. Having said that, I did hear that this might not be necessarily the only way to address the issue. I think our colleague from Ghana said that they are prepared to discuss the issue, but this is not necessarily for them a good basis, so I would wonder if there is another alternative that is being considered when it comes to finding a middle ground different to the two thirds, so that's an open question, having said that, we again appreciate a lot the effort made and we are looking into it, hearing closely the evolution of the discussion, thank you. Chair [1:10:11]: Thank you all. I don't have any other requests for the floor. So, distinguished delegate of Mexico. Mexico · Delegate · Sanchez de Guevara [1:10:24]: Thank you, Chair. Mexico is not a member of the Bureau, so I will stay on this side. As regards this discussion, I wanted to return to the point that I agree that this is not a new proposal. We have been proposing a path for decision making, not only in the Second Committee but also since the beginning of discussions. I just wanted to reiterate that in these processes, I didn't feel that there was a broad discussion because there were other matters that had to be considered and the resolution had to be adopted by consensus. But the arrangement that was arrived at in the room, a new formulation in the proposal from Norway, we're not going to withdraw it because we would like to reach some sort of agreement on the matter during this organisational session. My delegation would like to issue a strong call for us to have this discussion and to have all of the elements necessary to make this decision and consider all perspectives. It does not seem to me that there is consensus in the room as to how we should make progress on decision making, especially on substantive issues. We have heard that time is not our friend, and I also believe that we should not leave until tomorrow what we can do today. It seems to me that we have left many things to the last minute. As Pakistan, the delegate from Pakistan has said, we shouldn't leave things, run things down to the wire. vital week for us in this process in our view and so we would ask for support from the Bureau and indeed from everyone here so that we can actually have all of the elements necessary to hold this discussion and ensure the successful progress of our deliberations thank you. Chair [1:12:59]: Distinguished delegate of Norway. Norway · Delegate [1:13:04]: Thank you, Chair, and thank you for allowing me to come back on this. We just wanted to add some clarification to our proposal, and we are very happy to see that there is substantial will to consider our proposal among delegations. We very much appreciate it. It is true that the proposal follows the same logic as the proposal we made along with other delegations in the second committee, but the language is more nuanced. The language is drawn from recent similar processes, so there is a basis for considering that type of language. And we just wanted to clarify that it's not precisely the same, but it's based on the same approach to a decision-making mechanism. Thank you. Chair [1:14:08]: Thank you. Distinguished delegate of Pakistan. Pakistan · Delegate [1:14:13]: Thank you. Thank you very much, Chair. And we would also just want to, again, express our appreciation for the proposal and clarify our position as well. We're always open to discuss. We understand that this language is taken from recent processes. I wouldn't say similar perhaps necessarily but For us at least the closest equivalent we can think of in subject matter is perhaps the convention on corruption which which was by simple majority Of course, we have the UNF triple C as well as an example and then we have other examples which were by two-third So I think we would want to hear like substantive reasons for why tax should should be by two thirds and not a simple majority when issues like corruption, for example, have have had simple majority decision making procedures. So so our objection is premised on on that. But we are happy to always engage and listen for the rationale on on why this issue must be must have different procedures from the regular GA rules of procedure. We did hear proposals regarding specific modalities for stakeholder participation. We would just say we don't think it's the time now because, yes, businesses have a stake, so do other stakeholders. So making special arrangements for a certain category of stakeholders, I think now is not the time to discuss such arrangements. Thank you. Chair [1:15:53]: Thank you. So now I will take the floor to summarize what has been said. I think mainly our discussions is about modalities, process and decision making. And I think that everyone here, as you can see a little bit, confused between what happened in the first committee for that you are on this committee. First of all, we need to build the process together. So it's not something standardized that we just were going to put for everyone. So this is the work of the bureau. The bureau first meeting was just yesterday. And we discussed in the Bureau one of the important matters that is about the stakeholders' involvement. And we will continue on a daily basis to do this. Part of the work of the Bureau will be to propose to build a process and to propose it to the Committee so we can proceed. The process this time is a little bit different, last time it was not like super technical work, It's more like a political work, just terms of reference. So the modalities was a little bit easier. And even it was not formed in the org session, I think the bureau members who are still, I think many of them was here in this committee. If you can remember, we agreed about how the work would be arranged and the intercessional work after the org session. This has been done online in some meetings in which we agreed how we're going to do the work. I think the same will happen this time also, but this time it's a little bit more complicated to build a process, how the documents will go around, how the sessions will be arranged, how, what is, at what time of the year, and the intersessional, it will include some technical documents, maybe it will need translation, and three sessions per year is like you have intersessional like four months, how this would be managed in short time, not long time, given that at least one month will go for maybe for translation for technical documents. So it's not that easy to just build them. The administrative part about circulation of documents, again, maybe there is something that easy to have it and agreed, but still the biggest part about the process for three years, how it will be working to save time and to be efficient. is under construction, let's say like this, through this criteria and gradually we are getting the PIR involved within this so they can propose it. So just to ensure everyone that we are not moving haphazardly at all, we never did and we will never do. All the time there is a process and there is a procedure that we all the time are going to follow. And maybe some comments about like we finished yesterday early, I'm surprised, I thought that everyone was happy, but like yesterday we concluded the agenda, and if I was to move to the second item of the agenda, which is about the second protocol. I will hear everyone saying we are not prepared for it, it's for tomorrow, so it's difficult to satisfy everyone. If I moved faster, so everyone complained we are not prepared, if I slow then why we are not using the time efficiently and we finished early. But anyway, I'm used for this. So this is just to clarify for everyone. Then we come to the story of priorities. I think the resolution mandated us to in the organization to take action and decide about the second protocol and give a room for discussion for the decision making. And I think this is the priority that we have in the organization that we need to finalize. Even the process and all the modalities still, let's assume if we didn't finalize it here, still we have room to come back on it and work with the peer on it. But if we didn't finalize the topic that was mandated to us by the resolution, It's like impossible, we can't. We have to do it and there is no way to go back for it. So that's why we are just giving priority to the most important topics that we need to finalize. But the good thing is that now when we opened the session for everyone to give his inquiries, actually we get back, we get out with a good list of inquiries that draw our attention to some points that We need to consider that, that is the beauty of, of the discussion that we are having here. I think we heard from everyone and I have my list and I think my colleagues also write down what, what we heard, then we gonna compile all of this. So we make sure while we are working with the bureau on, on the modalities and on the process that everything will be covered. And we will keep going on the same way and we will keep hearing from your proposals and inquiries and bring our attention to some points and we'll keep improving the process as we go and change it and improve it more and more as we move on. So I hope what I said just clarifies some of the things that some of the inquiries or the points you raised and on this session. Okay, I see a request for the floor from Germany. The floor is yours, please go ahead. Germany · Delegate [1:21:56]: Thank you, Mr. Chair. Thank you, Mr. Chair. Good morning, everyone. Mr. Chair, thank you very much for the elaborations and I totally concur that it is really challenging to to address all those questions that were raised in terms of program of work and the organization of work. And we are aware that in other processes, some of those questions had only been addressed after an organizational session. Here, we feel like there's kind of pressure of time since we intend to have three substantial sessions within this year. So therefore, we do not feel like we can waste time. And then I beg to differ a little bit regarding the perspective on the, regarding the mandate or the priorities. And I would like to draw your attention to OP5 of the resolution 79/235. the organizational session was mandated to not only address, but to address and conclude organizational matters, including decision making, and to decide on the subject of the second early protocol. So I see there not kind of a hierarchy, and in particular, the resolution is not speaking about the Bureau addressing or concluding or addressing and concluding those questions, but it is rather up to this committee and the organizational session to come to terms on that. Thank you. Chair [1:23:45]: Thank you. So I see no more requests for the floor. So we're gonna move on. So the committee has just concluded this stage of its consideration of agenda item three. Now, the committee will resume its consideration of agenda item four entitled Framework Convention Protocol One on taxation of income derived from the provision of cross-border services in an increasingly digitalized and globalized economy and Protocol Two. We will turn to the selection of the subject of Protocol Two. Members will recall that in paragraph five of resolution 79/235, the committee would select the subject of the second early protocol at its organizational session and that the subject shall be drawn from the list of specific priority areas set out in paragraph 16 of the terms of reference, document A/AC.298/2. Those areas are taxation of the digitalized economy, measures against tax related illicit financial flows, prevention and resolution of tax disputes, and addressing tax evasion and avoidance by high net worth individuals and ensuring their effective taxation in relevant member states. I now open the floor to delegates. Please press the microphone button if you wish to speak. Please. Now the floor is opened. The floor to the distinguished delegate of United Kingdom. United Kingdom of Great Britain and Northern Ireland · Delegate [1:25:33]: Thank you, Chair, and apologies because I'm gonna come back on the previous item and sorry, I pressed my mic, but maybe you missed it. Um, we agree with Germany's point about OP5 and that requires us to conclude organizational matters, uh, during this organizational session. Uh, I just wanted to get clarification on whether we can expect, uh, written, products from the Secretariat to help us have those discussions. That there seems to be a lot of appetite for about. The timing of sessions this year and to discuss the proposal from Norway and Mexico on decision-making. Thank you. Chair [1:26:13]: Thank you. Again, I'm reminding everyone now we are opening the floor for the discussion of the selection of second protocol. Distinguished delegate of Saudi Arabia. Saudi Arabia · Delegate [1:26:38]: Thank you, Chair. And I think it will be helpful that before we get into the discussion on which of these four we are going to select for a second protocol, is that the Secretariat elaborate on what each of these topic would entail as what will be the outcome and the envisaged outcome of all these four. I mean, those are very general and the outcome is not clear what it would be under these four. So further clarification on them, I think will help to guide the discussions today. Thank you. Chair [1:27:52]: Thank you, distinguished delegate of Spain. Spain · Delegate [1:27:57]: Thank you, Chair. To this juncture, item four on the agenda, I'm not really sure how we have finished up item three, but we are under item four. And so I wanted to support the remarks made by Saudi Arabia insofar as When it comes to selecting a protocol, Spain might have a preference for one or the other, but I think it would be useful as I said yesterday in my general statement it would be very good to have an idea of what is envisaged under each of these, what outcomes are envisaged, before we take a decision, and so we would respectfully ask the Secretariat to provide us with a rather more in-depth analysis of what is implied in each of these protocols and what the expected outcome would be. Thank you. Chair [1:29:05]: Mr. Ambassador for Sweden. Sweden · Delegate [1:29:11]: Thank you, Chair. Yeah, we are also, we are agreeing with what was said by the distinguished colleague from Spain. We are also thinking that we might need more guidance on what is encompassed by the different protocols. And also in that, I also would like to raise the question whether how you see Are we going to have informal discussions on this? And I also, I didn't, I wasn't fast enough to raise my flags on the former, um, subject, but, uh, but also decision making, I mean, because now we have, there are proposals on the table, there are language on the table, and I… What is your plan? Is that to continue with informals in that regard, regarding those proposals as well, or how do you see the process going on? Thanks. Chair [1:30:21]: Thank you. Thank you, delegate of Argentina. Argentina · Delegate [1:30:28]: Thank you very much, Chair. At this organizational session, we must define the scope of the second early protocol. And this decision shall be taken based on the rules under the other item defining how we take decisions. This, for us, is a sort of exploratory session so that we can see the views of all of the delegations present. In this regard, I wish to align myself with the distinguished delegate of Saudi Arabia, supported by the distinguished delegate of Spain, which is that These, the implications of these subjects are not at all clear and so we really need a fuller understanding of what is implied and what these compass, what would this mean for digital services, what would this mean for ensuring certainty in tax collection and other areas. The same applies to digitalisation of the economy. It's not covered under the entire first protocol. These are all very broad questions, and so I align myself with the request from other delegations to please request a document that would shed some light on these issues to allow us to have the necessary information to make the right decision. Thank you. Chair [1:32:14]: Thank you. Estonia · Delegate [1:32:15]: Thank you, Chair. I would also like to support the idea that was originally presented by Saudi Arabia at the moment and also supported by other speakers. And it's not really new. We're talking about the need for analysis before choosing the subject for protocols already last year. And we also identified during the meetings that there is a different understanding in the room about what a certain subject may mean for different countries. And if we don't have any further guidance or analysis, we may as well blindly draw something from the list and start working with it. Thank you. Chair [1:33:04]: Thank you. Distinguished delegate for United Arab Emirates. United Arab Emirates · Delegate [1:33:12]: Thank you, Chair. We would like to support Saudi. Arabia and others that we need further clarity on the outcomes of each of the protocols. Thank you. Chair [1:33:48]: Of Nigeria. Nigeria · Delegate [1:33:53]: Thank you very much, Chair. I think the questions that delegate are asking, I am indeed very surprised. I'm surprised because these topics was, were suggested by members of the ad hoc committee that negotiated the terms of reference. And most of those members of that committee, if not all, are also present in this room. If this topic came from us, what did we mean when we were bringing those topics? And so asking now for definitions, and all of that, it's difficult for me to understand the basis because we were here when those topics were debated and suggested and were listed in the terms of reference. Unless there are other reasons why we are asking for this, I find it difficult to situate this requirement in the first instance. And besides, this room is filled with many tax experts. And so when we talk about tax dispute resolution, are we saying we don't know what that means? I don't think so. Chair, in my view, I believe that members who are raising these questions know the answer. And we should not stall this discussion because we want somebody to go and be doing any piece to, which of course will be a basis for another round of argument and discussion what is definition, what is not definition. This is my view, Mr. Chairman. Thank you. Chair [1:36:16]: Thank you, Nigeria. Distinguished delegate of Saudi Arabia. Saudi Arabia · Delegate [1:36:21]: Thank you, Chair, and thanks to Matthew for the point. And I agree in that sense, but the point that we are raising that previously when we have been discussing those different topics, let's take an example of high net worth individual taxation. There was a question there at that time around whether we are talking about Developing an, um, an instrument that will make sure those high net worth individual are taxed internationally in each jurisdiction, something similar to what we know as pillar two, or we are talking about, um, mecha- try to find mechanism like change of formations, exchange of practices. and stocktaking analysis of the situation internationally. So these two are very different outcomes that can be envisaged under that protocol. So this is the questions that we are coming to. Definitely we all know this topic, but what we want to achieve out of each of these topic is definitely different here. And if you ask in the room what you want to achieve, Under each, everyone I believe will have their own view on different, uh, expected outcome, so that's the question that we are eluding at, thank you. Chair [1:37:47]: Thank you, thanks to get off Singapore. Singapore · Delegate [1:37:53]: Thank you very much, Chair. Singapore would like to concur with the comments previously made by a number of delegations, Saudi Arabia, Spain, Argentina, Estonia, and the United Arab Emirates. And I'd like to thank our colleague from Saudi Arabia for very eloquently explaining the point I wanted to make, that it is also our recollection that even though these four topics were selected and agreed upon by the ad hoc committee, It is my recollection that there were questions posed in the work of the committee last year as well as to specific terminology, definitions, nomenclature being used, what are the outcomes envisioned. And as our colleague from Saudi Arabia pointed out, what we found was that there were differing views on the expected outcomes. And certainly, while I do think that members of this room have at least a foundational understanding of what these topics pertain to, what is not clear at this stage is how they would manifest in the context of the work of this committee, in the context of a framework convention and protocols. And I think that is what we would appreciate some clarity on so that we precisely because we want to conclude the work efficiently and successfully to help us scope our interventions, to scope our work, to help the Bureau in its planning and to facilitate the debates between the committee. So I think contextualization is very important for our work here and to that end would appreciate that from the Secretariat. Thank you. Chair [1:39:27]: Thank you. Distinguished delegate of Estonia. Estonia · Delegate [1:39:32]: Thank you. I also felt the need to react to Nigeria's comment, as I indeed was in this room last year as well. And in this room, I realized that what I think I know about these subjects is not the same that the other countries in the room, or it's not the same way the other countries in the room may understand it. I will also bring out a couple of examples. For example, in April, when we discussed the domestic resource mobilization, it became clear that we have very different understanding about what this could mean. In August, I can specifically refer to the dispute resolution again, when it was quite shocking to realize that even to this subject, which seems to be relatively neutral and perhaps could gather a lot of support in this room. Again, we approach it so differently that we truly need some ground rules and explanations on how to work with the subjects that we have ourselves, yes, written down in the terms of preference. I guess that the discussion we are having at the moment shows that we didn't really finish it last year. I mean, in substance. We finished it in a sense that the resolution went for a vote and it's decided and closed in a way. But we didn't really come to an agreement. Thank you. Chair [1:41:14]: Thank you. The Sanghosh delegate of Ghana. Ghana · Delegate [1:41:18]: Thank you very much, Chair, for giving me the floor, and I thank our distinguished delegate from Saudi Arabia for the request. I do note that perhaps the request is coming from a good place to just understand some of these processes, and in that regard, I understand the request. However, I disclaimer, I'm not a tax expert, but we had these discussions last year and these discussions when we proposed a number of these topics, we understood in very broad terms what we were talking about. We are afraid, or my delegation is quite concerned that such a request would open unintended consequences for the continuance of this process. Unintended in the sense that it would go, we would go back to the same arguments of whether or not we should have detailed analysis before we discuss this and all that. I do believe that we should make progress and I support what My Nigerian, uh, colleague had indicated, uh, these are topics that are broadly understood in the context within which they were proposed when it comes to the issue of, uh, scoping. If we need clarity, we would scope them. But I don't think this is the time to ask for definitions. And if you don't agree with those definitions, it becomes a subject of further negotiations, further stalling the process. So I'd want to indicate that on the face of it, we have general understanding of what these protocols are. While I do understand the request is coming from a good place, I'm afraid if you define it in one way and another delegation says, no, we need to have detailed analysis, then everything unravels. And so there's a stage and time where we would scope everything and that would be the time for these details. But as we sit now, we all have a broad understanding of, as Matthew indicated, what dispute resolution entails. And so we should proceed and make a decision on these critical issues so that we make progress. Time is not on our side and we should be able to move forward on this. Thank you. Chair [1:44:34]: Thank you. India · Delegate [1:44:38]: Thank you, Chair. We understand the concern raised by the distinguished delegate of Saudi Arabia when they seek clarity on what each topic means. But at the end of the day, as the distinguished delegate of Germany pointed out, that we are all gathered here to conclude our discussions on selecting a topic for the second protocol and that is one of the couple of things that we have to do not just the only thing. Now the point is that today we have to select this topic. We don't have to develop this protocol today and I can understand that many of us maybe may not be tax experts and they do not feel very comfortable with proceeding unless we have a very clear understanding of things but A clear understanding of things will come when we begin to develop these protocols. Today we have to choose a topic and if you ask five tax experts, they will have six opinions. So we will never really end up with anything if we try to scope it out today, here and now. That is something that we can't do. We can fall back on a common sense approach. We have four or five parameters which we have discussed in the past. We can look at subject matter complexity. We can balance, yesterday one of the distinguished delegates said that we should choose an ambitious topic, but we should balance that ambitious topic with a realistic possibility of conclusion. We can look at a topic where we can have possibility of convergence or broad agreement. We can look at a topic which does not overlap with the topic that has already been chosen. We can look at a topic which is aligned with the work that has been done in the past work like the resolution 78 230 so we can look at all these things we can we can develop a common sense Matrix and come up with a topic so so I don't see a huge problem in the issue of selecting a topic and uh so therefore as the distinguished delegate of Estonia mentioned that dispute resolution seemed like a very neutral topic. Yes, we agree it does. So maybe we can choose it. It could mean many different things, but we will discover that as we go along. So therefore, I believe that we can fall back on an approach and if we try to reopen this discussion as to what each topic means, we will be turning the clock back and we will not be doing ourselves any service in that endeavor. So I think we should proceed with these discussions towards selecting a topic rather than wondering about what they mean all over again. Thank you. Chair [1:47:30]: Thank you. Bahamas · Delegate [1:47:34]: Thank you, Mr. Chair. I want to support the comments made by Nigeria, Ghana, and India on this topic. I remind colleagues this is an organizational session, not a substantive negotiating session. As such, the matter on the agenda is to choose a topic, not to define the different elements and scoping of the topic. That will be reserved for future meetings of experts and possibly working groups if that's the way we choose to go. And so I want to just remind colleagues of that. We are here to just choose a topic. Given the discussions, as Indy had suggested, maybe we should choose the most non-controversial topic that seems to be arising as well. But we should not roll the clock back, as my colleague from India said, and renegotiate and try to define every element of what the protocols are. We are here in an organizational session to organize, and part of that on the agenda is to just choose a topic, and that's where the Bahamas supports. Thank you, Mr. Chair. Chair [1:48:46]: Thank you. I still have a big list of requests for the floor, but I would like to stop the discussion at this point to intervene and give some comments because I think that the discussion is not going in the right direction. So I will give some comments. Maybe this will give a better view for everyone to see how we should discuss the topic. The first thing, Let's talk about, I think it was raised that we, we need to understand the outcome. The outcome of the protocol, it will be decided by the committee. This is based on the negotiation and how we decide how the protocol will, will adopt some solutions and this is the outcome. So I don't think this is something that we need to look at. The impact, I think the impact is different from one country to another. Some items are with a very high impact for some countries, it's not the same for the other, so the impact of, of the item, it is something to be decided by, by each member state, which item is with a high impact for, uh, for it. Uh, we have a different understanding of different, different views, divergent views between member states. I think that what we call it negotiations, that's why if we all have the same view, so why we're here, so just let's go and adopt the protocol or whatever we have. We have different understandings, different views, but I think the basics are here for everyone because I assume that everyone in the room here is a tax expert. This is essential for these discussions. So at least they have at least basic or high level understanding of the topic, the meaning of the topic, the background of the topic. even a high level of the scope what is included under this item. So, I think, and I don't want to repeat what some colleagues said, that this was already discussed before and we select this item and we need to select among this. But to cut it short, and I start to learn from everyone here, and we start with the criteria to expect what's going on. the background paper for the protocols will be circulated this afternoon. So the committee has been working on this. So to manage expectations and just to stop this negotiation, it will be there. Okay? So I think maybe at any moment, our colleagues here are finalizing the document and it will be circulated maybe even before the lunch break. So it will be there. So I think now Having this understanding and having tax experts in the room that at least understand and have at least the minimum, some of you are experts in all these areas, of course, and I appreciate that I'm sitting here in front of great experts from each country, but if it's not your area, at least as a tax expert, you have a minimum understanding for it, then I think we need to start to talk what is the impact of this and how every country see it, what is the most important so we can bridge the gap between each other and we start be able to reach because the organization we need to decide about protocol. And as we all usually ask to strive for consensus, I hope we can reach it with consensus and the only way for this to start a negotiation and give our views about what we see is impactful and important to our countries and we start the discussion this. So I hope this can redirect the discussion in a more useful and fruitful way so we can reach a conclusion. The floor to the distinguished delegate of Nigeria. Nigeria · Delegate [1:52:46]: Thank you very much, Chair. I think you have taken the sail, the wind out of my sail. Howbeit, I believe that issues of scoping definitions is for the technical team that we negotiate the protocols. Thank. Chair [1:53:11]: You. Thank you. Kenya · Delegate [1:53:16]: Thank you, Chair. I believe, thank you for your clarifications, but I believe you've also basically addressed the issues that I was going to raise. But since I have the floor, I can just add that Um, there was no detailed clarification or analysis or, uh, clarity on outcome that was given when the first protocol was being picked during the, during, um, the previous session in 2024, and I don't believe this would be needed in picking the topic for the, for the second protocol. I agree that member states either have their tax experts with them or they're going to have them at the next stage when we're going to be negotiating the protocols. So we just want to support the comments that we don't need an analysis to pick the second protocol. And we just want to be guided by resolution 79235 that we need to conclude on selecting this second protocol. And so we don't want this analysis to delay us in achieving this outcome. Thank you, Chair. Chair [1:54:26]: So I would like to go back to Kenya and can you give us like your first impressions which protocol you believe that it can be relevant from your point of view? Kenya · Delegate [1:54:49]: Thank you, Chair. I think the comments that we made yesterday were definitely towards having a protocol that's going to address the priorities of a wide range of countries. So as much as we would, for example, want to have a protocol on illicit financial flows, we do understand that maybe with the time that we have, this could be a wide topic that maybe we will not be able to reach within the three years. So we are open to discussing the second protocol. We don't really want to hold fast to the option that would work best for us. So we believe also a topic like tax, the resolution of tax disputes is something that could be achieved within the short timeframe that we have. So we don't have, our priority would be illicit financial flows, but we are open to listening to the priorities of other countries, especially when we want to do this within the timeframe that we have been given. Thank you, Chair. Chair [1:55:48]: Thank you, Kenya. Switzerland · Delegate [1:55:55]: Thank you, Chairman, um, did the positions regarding how, uh, the second, uh, the topic for the second, uh, early protocol should be, uh, chosen, uh, were explained, uh, in detail. totally understand also the difficulty you as a secretariat are dealing with when you are asked to explain what a certain topic would mean. It's obviously very difficult because you don't know, you simply don't know what all the member states intend. But for the further discussion of that issue, I would like to ask other delegations when they propose a topic, and we have heard several proposals until yet to just briefly give an outline of what problems they hope to be addressed under that topic and maybe even to also give an outline on solutions they hope to achieve. I think this would be fair and help the further discussion of that item. Thank you. Chair [1:57:20]: Thanks, Switzerland. I will get back to you with a question, at least to give us first impression. What's your, how you see most relevant to your country, at least of this list of protocols that you see it more relevant from your point of view? I'm not sure if you're from the mission or a tax expert, so the floor is back to you. Switzerland · Delegate [1:57:53]: Thank you. I am from the capital. I have a basic understanding of taxation, but although also having been in the room last year when the terms of reference have been discussed, I'm afraid I cannot answer your question because honestly, I lack the understanding of what certain of the topics would mean. So I am not able to give you a clear preference. What's obvious is that digital economy seems in my view to be already covered by the topic of the first early protocol because the digital economy is basically services and the historical reaction of the UN to the digital economy taxation discussion was Article 12 A and B, which dealt with the taxation of services. So this is probably a topic that, which is already covered. And for the rest, we have no, not yet any clear preference. Thank you for asking that question. Chair [1:59:09]: Thank you. This is like narrow the selections, the choices, so I will consider it. So at least now we know that you are between three protocols. So it's enough for me at this point. But just I'm going to express my point of view here because I expect that all came here and we know about the second protocol and I'm expecting that everyone already prepared and discussed the idea of these protocols. with his tax experts in the capital so I was expecting that everyone is prepared while we are coming here and we know the position of our countries and which is the most preferable to us but even if we're going to work with like the concept of elimination metrics so again it will work so now you removed one for Switzerland from the selection okay it works thank you the floor to the distinguished delegate of Colombia Colombia · Delegate [2:00:10]: Thank you, Chair. And we do find it really important to have this conversation. And essentially, from our perspective, this is a debate on the merit of each of the protocols that are on the table. And fortunately, it is not up to the Secretariat to interpret why that is important for each of us as member states. I think all of us as proponents have the responsibility to advocate for one or other protocol and to really present convincing arguments on why we should delve into the challenges of developing each one of them. I do confess I am not tax expert. I do, however, might have a couple of takeaways on process. And I don't think you're in a position to prejudge or have an agreement on what is the content of that protocol to be developed. I think you can only have, um, a wide, um, uh, idea or sense of, of, uh, the issues you might tackle in each of them and, uh, a wide, um, uh, idea of, uh, even the challenges that you, uh, might expect down the line. And for example, our dear colleague from Saudi Arabia was referring to two ways to address the issue of high network individuals, for example. Well, if you ask my delegation at this point, probably our mission will be to tackle both of them, not just one aspect of it. But of course, it will be down to the conversation we have when we delve into this chaos in the protocol to reach to a conclusion on what is technically and politically feasible. so that we can all collectively set the ambition of the content of that protocol. And you can also, I mean, argue that at the end of the day, there is a certain tone to the high network individuals issue as the language is very specific in the protocol that we have as an option here, since it addresses But having said that, let me jump into, uh, what will be the, the, the priority for my delegation, uh, in this context, uh, we do believe there is enough merit to consider high network individuals at the second protocol, uh, we, uh, consider that, uh, there is, um, growing, um, not only, uh, technical but also political base to have the conversation, um, I think, uh, we have a lot of, uh, uh, uh, uh, uh, uh, uh, uh, Uh, we have had, uh, useful, uh, indications on, uh, what would be enablers to continue or, or initiate the conversation when it comes to high network individuals identifying assets, uh, exchanging information, um, and being able to, uh, have a set of, uh, principles and standards that, uh, would allow us to, at the national level, uh, create the, uh, proper, uh, taxation, uh, maybe even a baseline on, on, on what, uh, would define a high network individual in the context of such a protocol. Uh, those issues, uh, uh, will be, um, elements that we, uh, would expect to, to discuss. And, and, and, and I think there's, um, also a growing understanding of, of, of all of those to be, um, increasingly important when delving into this conversation. But not only from the technical perspective, also from the political perspective, uh, the Appetite for the conversation is growing, I think we all know about how, um, there are different G20 communiques, uh, under the presidency of Brazil, which we appreciate very much, on how, uh, this issue has been evolving on, um, and, and there is appetite, um, uh, for the, uh, members of such a group to also work, uh, into, um, uh, into, uh, into, uh, into, uh, into, uh, in this agenda, and that will send an indication of possible convergence in this room as well that is so, well, clearly divided when it comes to ideas that might put the developed and developing countries in one side and the other. At the national level, we also consider that when it comes to closing inequality, taxing high network individuals will be critical to close them. even, uh, in particular in the Latin American region, we are the most unique region in the world, uh, and that will provide, uh, additional, um, uh, resources, uh, in, through DRM, uh, to achieve what we are trying to do here to this framework convention, uh, one of the, uh, the, the, the, the purposes, which is achieving the SDGs as well. So, And just to say, even it is an issue of compensation, even if you look into the statistics, 10% of the wealthiest people of the world is also responsible of 70 to 80% of the emissions. And if we want to compensate that in a wider context of protecting our planet, I think it is also contributing to that. So these are some of the reasons why we consider this relevant issue, that it has its own merit to be advanced as a second protocol, and that we have the elements to actually do that in three years. Thank you. Chair [2:05:33]: I believe you need to change career to tax expert. This is my advice. Thank you, distinguished delegate of Zambia. Zambia · Delegate [2:05:50]: Thank you, Chair. And congratulations, this is the first time I'm taking the floor, congratulations to you and the members of the Bureau. Chair, just to echo what the distinguished delegates of Ghana, Nigeria, India, Bahamas said, I think in this session the main issue is to pick on the topic, and I believe the essence of why we shall be negotiating the protocols It's there that we shall then determine the scope, the outcomes, and also to ensure that it's aligned with what we put in the TORs, I mean, their commitments, objectives. And as the distinguished delegate of Kenya said, when we're picking the first topic on cross-border services, I think we didn't go into those details of the outcomes. And looking at the time that we have, if we have to go into that debate, I think it to take forever. and we could be preempting the scope. At least these topics came from members who sat in the ad hoc committee. A lot of these. Topics that were being picked and selected, we didn't even go into details of what would be the scope. And I think it would be good for us to stick to picking the topic. But it's also good to note, Chair, that Secretariat will be providing something in the afternoon. I just hope it won't derail us into further debate of what we understand should be covered, but it's a good start. And as secretariat, as we go forward in these sessions, obviously there'll be a lot of demand on the secretariat to provide more input proactively. I think as we saw in the morning, earlier on, I think EU raised some questions on the last agenda item, some of which we just, we're still awaiting responses. Then when it comes to, obviously, Chair, you asked me what is your priorities. From the four, our priority as a country will be illicit financial flows. But obviously, we are still flexible in terms of reaching something which is inclusive in terms of what will be a priority for all member. Sectors. Obviously, you can't all agree, but we need to pick from the four. If I had my way against the four, I would actually go to exchange information is quite key, but it's not covered in the four where we're supposed to select one topic. But for us, it's illicit financial flows, but we remain flexible to see how we make progress during this org session. Thank you, I submit. Chair [2:08:26]: Thank you, distinguished delegate of Pakistan. Pakistan · Delegate [2:08:30]: Um, thank you, um, Chair, I did jump the gun this morning and, and, um, express our, uh, two preferences again, um, which we had stated to be high net worth individuals and, and, um, tax disputes, uh, but I, I do want to put on record that much like our colleague from Kenya, we, we are largely flexible in what would, help this committee, whichever topic would help this committee move forward together for the topic of the second early protocol. And we do concur with our colleague from Switzerland that perhaps there's a bit of overlap with digital, the taxation of digital economy with the protocol we've already chosen as taxation of digital services would be covered by the first early protocol. So maybe we can then choose amongst the remaining three. And, and we've already expressed our preferences, but we are, um, largely flexible, thank you. Chair [2:09:23]: Thank you, Belgium. Belgium · Delegate [2:09:27]: Thank you, chair, and since it's the first time I am intervening, I would like to congratulate you too with your reappointment. And thank you very much for the affirmation that we will get a background paper provided by the secretariat and thanks to the secretariat to provide us the paper. We really believe it is not a luxury to clarify what is envisaged. It is a necessity also to move forward efficiently in the process. We believe it will be very helpful and we look forward to read it because last year I was here too as a tax expert and there was still a lot of confusion on what was meant with certain things. So from that point of view, I can fully align with what was said previously by the distinguished delegate of Estonia. Last year, for instance, I remember there was. Also a big discussion on how broad the scope was seen of the protocol around tax related illicit financial flows. Because coming from Belgium, we might be able to consider this protocol if it is very clear how the scope of the protocol is seen, but until now, this remains unclear. And coming from Belgium, we also very much welcome the suggestion made by the distinguished delegate of Kenya to maybe go for an easier or less controversial protocol such as dispute resolution and prevention. We could also align ourselves with that. Thank you very much. Chair [2:10:47]: Thank you. Thank you, delegate of Norway. Norway · Delegate [2:10:52]: Thank you, Chair. And we have had a. And rich discussion on the topic already. Starting with Saudi Arabia's call for. More specificity in the issues that delegations enlisted to address under each suggested topic for the second protocol. And we do take note of the concerns expressed by Nigeria and Ghana. I think with our colleague from India that this is not a scoping exercise, it's an exercise to decide on the topic. Nevertheless, we believe that it would be helpful in picking that topic to understand a little bit more about what… specific issues would be a priority and that those topics were and hear from delegations that have proposed them. And we would like to thank those delegations that have already specified these issues and we will take them into account. Because like our colleague from Kenya pointed out, there is limited time and therefore having a sense of what kind of topics to be addressed in that the protocol we pick would assist us in choosing a topic that we actually have time to develop a protocol for. And we appreciate that there will be background papers. We are flexible when it comes to the topic of the second protocol. We would agree with our colleagues from Switzerland and Pakistan that the taxation of the digitalized economy seems to overlap very much with the first protocol on cross-border services. And I think we will come back to more specifics on protocols when we have looked at the background paper, but maybe a short comment that the prevention of and resolution of tax disputes seems to have some merit because you would need that to to have a vehicle to enforce the protocol on cross-border services and a protocol on prevention and resolution of tax disputes would also be necessary to give real life to protocols in the future. But that being said, we have haven't taken a final position yet and look forward to the background paper. Thank you. Chair [2:13:46]: Thank you, Mr. Wey. I will pose the floor for one minute to give a clarification. I think when we're talking about what issues need to be identified under each topic, I think this should be the work of the committee, what we need to cover under each topic. Why I'm saying this, because you will find in the papers that you will see some items and some issues As an example, and we said, for example, under, that doesn't mean that the Secretariat is giving a specific definition for the scope of this item should include this, never. It's just we just the Secretariat try with their tax expert to explore what is a common understanding for everyone and just put it and we tried not to dive in in any technical details because the technical details and the scope, what to include and what to exclude, this is the work. It's just understanding for the item with some examples and just examples which means that maybe some of them not relevant for the committee will not consider, some of them relevant, all of them relevant, all of them not relevant for someone. It's just some efforts has been done by the experts and we put on the table based on the common understanding of normal tax experts. So the paper you receive is not identifying the issues and saying or scoping and saying this is what should be dealt with. So this to clarify and make sure that everyone understands this when you read the paper. To the distinguished delegate of Germany. Germany · Delegate [2:15:32]: Thank you, Mr. Chair. First of all, I appreciate that the indication that we will be getting the background paper by the Secretariat, that would be much appreciated. And it is true that we have been requesting consistently last year to conduct scoping and analysis. We used to believe that this would be the better approach. It is not Germany's intention to reopen the discussion now. We missed the train, we could say unfortunately, but it is what it is. We are not inquiring to conduct now a detailed scoping or analysis. I think Bahamas, or the distinguished delegate, apologies, Bahamas was totally correct by saying that it is only about choosing the topic here. However, so the time allocated to This discussion seems to suggest that the mere picking of a topic is also not a very easy exercise. We would prefer to decide on something that is least controversial. However, what least controversial is probably also really debatable. I like the current approach that was prompted by you, Mr. Chair, that delegations are sharing their grounds for their priorities. I believe it would also facilitate the discussions if -- and us to find an agreement if it would also be outlined to some extent what is envisaged for each individual protocol. I do understand that it is not the task of the secretariat to prejudge the discussions or to do this on behalf of the committee. So far, I have been hearing from some delegations the reason why they deem something as a priority, but not so much how their priority is supposed to be addressed by a protocol. And I would like to follow up on one proposal that was made by the distinguished delegate from Switzerland. And also reflecting on a comment by the distinguished delegate of Ghana, so when there is or when there was a general understanding within the ATOC committee what is meant in broad terms by the protocols, it would be helpful and facilitate the discussions if the delegations who are promoting a specific topic could also give an outline on not only why, but also how this specific issue should be tackled. That was only meant to be a recommendation. Thank you. Chair [2:18:49]: To the distinguished delegate of Germany, maybe it's my wrong idea, not you, but can you give us like at least initial direction for which protocol you believe we can go for it? So at least to understand your country direction. Germany · Delegate [2:19:10]: Yeah, before, of course, before doing so, I would have to emphasize that I speak in my national capacity, not on behalf of the EU27. So it is not so much only about our priority, but I think it is fair for all of us to consider what is also achievable given the timeframe available to us, and also what is not only with view to the resources, but also politically achievable. For us, what also matters is whether there are some topics we think are already being addressed or in the process of being addressed either by other protocols. We have heard, for example, the view that digital economy is actually already kind of supposed to be included under cross-border services. But then also the question whether specific issues, which we acknowledge as issues, are already being addressed by other international fora, for example. So coming back to your question, and given the circumstances, we deem it the least controversial topic to be dispute resolution. But this is This is kind of a gut feeling since we're really lacking a little bit, you know, of the scoping that I was alluding to previously. Thank you. Chair [2:20:39]: Thank you. Thank you, delegate of China. China · Delegate [2:20:46]: Thank you, Chair. First of all, I will go directly to the answer to the topic of the second protocol. Our preference is prevention and resolution of tax disputes. I would like to echo the comments of the distinctive representative at Estonia and India and some other delegations as well in the previous interventions. This topic is more neutral and in our belief it is with urgent needs to seek more robust measures on prevention and resolution of tax disputes. especially in the situation where multilateral cooperation is facing some challenges and in the meantime some more new rules keep coming out in different platforms and the bilateral treaties keep evolving accordingly. And I think this is the topic that can take more member states on board. Secondly, I should say I do understand the comments from the other delegations for seeking Clarification for some matters, for example, as mentioned already by some other delegations, classification is needed for the relationship between the first protocol and the sub-item A in the list of the second protocol, taxation of digitalized economy. If we recall, the languages in the first protocol, protocol one, was coming out in the last minute and seems overlapping to some extent with the sub-item a taxation of digital economy and no explanation on that. Thank you, Chair. Chair [2:22:27]: Thank you. Distinguished delegate of Russian Federation. Russian Federation · Delegate [2:22:36]: Thank you very much, Mr. Chairman, for giving me the floor. Since we have been discussing this matter at length, I do have a small comment with respect to those discussions that we held last year. And this remark has to do with the fact that I looked back into my notes from last year and I found a rather detailed description of those discussions that many delegations advocated, spoke out in favor of conducting the necessary analysis in order to select any given topic for the protocol. And the majority of us agreed that if the General Assembly were adopted, supported those two general topics, then consequently the relevant analysis had already been carried out and the work of our preparatory committee boiled down to moving forward, boiled down to selecting the topic for the second protocol of three protocols or four protocols. But what we agreed was that two protocols were necessary given the fact that we need not just to work on the protocols at the second phase. phase, but at the same time to draft the convention itself. And in this connection, the task is quite ambitious over the course of three years to cover such a broad scope of matters, both the framework convention itself and the two protocols they're under. So since we had the understanding that the first protocol, we reached the understanding that the first protocol that will be drafted concurrently with the convention on taxation, for cross-border services. Then moving on to the second matter in the statement, I wish to note that from among the four topics that have been proposed for discussion, this is rather broad in order to ensure that we can combine this with the taxation of the digital economy topic and they interconnect here. And we understand and we respect the positions of our colleagues who advocate topics that are related to illicit financial flows. But at the same time, we think that this is an issue that would be useful to develop alongside the protocol that is related with exchange of information for the purposes of taxation, because these are two interconnected and interlinked topics. The topic of exchange of information has already been set out in the latter protocol, the one that's set out at the latter point. The question of illicit financial flows, we think it will be sufficiently covered on the basis of that second one. Now, with respect to taxation of wealthy people, high net worth individuals, I As a tax specialist, uh, colleagues, uh, that, uh, the, the proposed this, uh, the question is rather, uh, is, is related more to taxation or related to issues that allow for definition or identification of… say, ways to obstruct those instances, to prevent those cases when problems with taxation of this category of people, high net worth individuals, arises. And it seems to me that here this is an issue that could also be organically linked to issues having to do with exchange of information. But once again, this is a topic that is set out in the later protocol and from the above mentioned. By way of, I would draw the conclusion that the topic for the second protocol is dispute resolution as the most logical of the ones that I have mentioned. I do hope that in my statement I've sufficiently substantiated and justified the selection of the topic in response to the question of our distinguished colleague from Switzerland. Thank you very much for your attention. Chair [2:27:01]: Thank you. To the distinguished delegate of Philippines. Philippines · Delegate [2:27:10]: Thank you, Mr. Chair. At this point, we align with the understanding that we can have the chance to discuss, express what these topics mean to us, how we want to shape the protocol through these discussions here on. Now, moving to the selection of the second protocol. My delegation proposes the selection of measures against tax related illicit financial flows as the subject of the second protocol. It is imperative that we confront the evolving challenges posed by illicit transactions, which are facilitated by the exponential advancement of financial technologies. In this line, we believe that the rise of online banking platforms and crypto assets, while offering significant benefits, has opened avenues for tax evasion and international illicit activities. Crypto assets represents a developing market that moves rapidly across borders. One of the key issues is that since crypto assets differ from traditional currencies, they are not covered under existing tax information exchange standards. Crypto assets function differently from traditional currencies since they can be quickly transferred across borders and used by individuals, companies, and other groups to store value in other jurisdiction. Thus, it has become an increasingly popular vehicle for the accelerated proliferation of illicit transactions. It is critical that the second protocol addresses the need for coordinated international efforts to develop standardized and transparent tax frameworks for this new financial products and services by aligning international taxation standards we can reduce the risk of tax base erosion and ensure that these emerging financial assets are subject to fair taxation irrespective of whether they are held. At this point also, Mr. Chair, we just want to register that while we understand that the topic of the second protocol should come from the list under item 16 of the TOR, that tax cooperation and environmental challenges would have been equally important and urgent. We believe that a UN-led framework convention on tax cooperation can serve as a vital tool in helping countries meet their commitments under the Paris Agreement. We will engage constructively on this matter as we go along. Thank you. Chair [2:30:11]: Our colleague from Philippines, I'm sorry, but can I get you back, get back, maybe I lost something from, unfortunately from your speech. Which protocol did you specify, one of the protocols? Philippines · Delegate [2:30:28]: Mr. Chair, it's the measures against tax related illicit financial flows. Chair [2:30:39]: Thank you. Thank. Brazil · Delegate [2:30:46]: You, Chair. Just a preliminary question. You and the Secretary have taken notes about the questions, the procedural, mainly procedural questions that were raised. I would like to know whether you are going to stress, so I think that would be a good way forward. And then, Maybe some of them can be replied, some of them are not. That's just a suggestion how to proceed. I agree with Germany and Brazil has insisted quite a few times that we could have had some meetings, side meetings to discuss more in depth these specific topics. And out of the possible topics raised, some of them are more Some are broad or are broader and others are more specific. Taxation of services is likely more specific than illicit financial flows, for instance. Probably would need different, uh, different, uh, time for discussion for different topics, some of them. And as Germany has said, the train has, uh, departed already, so I don't know how much time we would have to discuss. in detail each of these topics, but we do have a few sessions ahead. So one proposal would be that some countries that volunteer, they could present about each topic a bit for five minutes, that means, I don't know, instead of just stating the preference. So that could be one way forward to park the discussions and after lunch, countries could choose to defend their views on specific topics. So we could go one by one. So discuss first, I don't know, the illicit financial flows, then we go to the next topic and next topic, so on. I think it would organize the discussion. I also see that there is a lot of uncertainty here and countries are a bit afraid of committing or accepting less controversial topics because there is a lot of uncertainty in relation to the procedures. and the quorum. So to some extent those questions are all connected and why we don't at least solve part of the questions in connection to the procedures and the quorum, I think countries will be more afraid of committing or choosing less controversial topics. In relation to our role here, I believe that our role is to There are many ways of interpreting it, but in the end, or ultimately, I think that our main goal here is to look for domestic resource mobilization. So, and I, among the topics, I don't see, I can't see how the resolution of tax disputes would help us to fulfill that goal. There is an indirect effect maybe for companies that would be more attracted to invest in countries for certainty, et cetera, but I don't buy that argument so much. I don't think that that is so meaningful among many determinants of foreign investments. So taxation is one of the determinants for investments and dispute resolution would be a subtopic in that element in that factor determinant for investment, as they call it in papers. So among the topics I have, I do agree that maybe it's the least controversial one, but I don't think that it will help us to fulfill our mandate. In relation to the topics that Brazil would support, we said quite a few times, so we defend the inclusion of the taxation of high net worth individuals. And finally, A few comments on the illicit financial flow. I, as I said, maybe the train to discuss details about it has departed already and is not here any longer, but we can think of it more than just changing the rules, but we can also think of the topic in relation to procedural or administrative cooperation. One of the ways how it was stated is through exchange of information. There are many forms. to cooperate under exchange of information and audits and so on. So I think that at least some ideas how to do the scoping on illicit financial flows, we would have to discuss or to enumerate so that some of that uncertainty that I mentioned could be set aside. Thank you. Chair [2:35:41]: Thank you. Chile · Delegate [2:35:47]: As we said in our general statement yesterday, we are open and have listened to other members' views and proposals. On the issue of the second protocol. Our goal is to reach the broadest agreement possible regarding the second protocol. From what I hear, many of us are quite flexible, and that is good news. The delegate from India mentioned a matrix, including what is achievable, et cetera. And such an exercise is helpful in this situation. We have and have always had a preference for the high net worth individuals protocol. But as expressed by. Kenya and others, we are also open to consider dispute resolution if that proposal attracts more appetite from other members. As also expressed by others, we agree that the scoping and development of the subject needs to be decided in a Member State-led process and elaborated by us once we have decided the. Subject of the protocol. Thank you, Chair. Chair [2:36:59]: Thank you. Permanent Representative of Sweden. Sweden · Delegate [2:37:05]: Thank you, Chair. Thank you a lot for giving us the opportunity to discuss this further and to produce a background paper. I agree with what has been said before that It's really -- I don't think we have actually the same perception of what's meant under this four protocol. That does not mean -- I don't interpret that because I am not the tax expert. I think my problem is that I've been a tax expert, so maybe that is why you also have heard a lot of different interpretations under these proposed protocols. So I think it's really difficult and just to say the protocol that we would have preferred aren't one of the four, so we are in a difficult situation already there. But I do also understand the concerns that we have heard today that you want us to have some preliminary thoughts on this. So I just wanted to contribute with my I think the distinguished delegate from Germany called it a gut feeling. Well, it's a bit like that, but just to give you some directions. And I think there also what the distinguished delegate from Kenya said that I mean, we have to see, uh, when we think about the second protocol, I, I at least, um, of the, I am of the, um, view that the first protocol would take quite a long time. I don't think three years is a lot for that. So, so, uh, if it's gonna be something that is, would be effective and, and, and, uh, achievable. So, so therefore, I think also still we have to be realistic and, uh, and, And that's also how we view it. So if I look at the protocols when it comes to taxation of the digital economy, I think that's already been said by others that it's really linked to the first protocol. So that is something that we would not prefer to do. And we have also, we don't think, we are not, we would not be, we will also find it, we would not prefer to have the fourth protocol addressing tax evasion and avoidance by high net worth individuals and ensuring the effective taxation in relevant member states. I know that others are asking for further elaboration on things, but I mean at this point it's difficult because I still think that we, We are not sure, um, really what's behind it, but that is sort of, so, so those two protocols, if, because I also understood that you wanted us to set preference, what we don't want, those two protocols we don't want. And actually, as the distinguished delegate from Chile also said, we have also been listening in. And for us, it also seems that dispute resolution and prevention is also something that might be achievable, where we can maybe also find some kind of broad consensus. It seems, at least to us, to be more realistic and also it's not gonna be sort of in the, the, um, I guess in the open air, uh, I mean, you could definitely see a scenario where that's linked to the first protocol. So I think that's, uh, something that we would see at this preliminary stage to be, to be viable. So, uh, um, so that was just, that is our way of thinking right now. Thank you, Chair. Chair [2:41:07]: Thank you. Singapore · Delegate [2:41:13]: Thank you, Chair. And we'd also like to express our thanks to the Secretariat for its assistance to prepare the background papers on the four topics, which we assure will help clarify our doubts and questions that we might have on these topics. In addition to these background papers and chairs, you clarified the suggested examples for scope. We still do believe that it would be useful in the course of our deliberations to hear from delegations themselves on specifically what they envisage, even preliminarily, as their priority areas within these shortlisted topics, particularly how they see their topic or topics addressing current tax challenges in these areas. And we appreciate that some of these allegations, such as our colleagues from the Philippines and Brazil have already done so. It's our view from what we've heard from the room so far, yes, we need not go into a scoping exercise per se, but I think as our colleagues from Norway earlier indicated, some degree of specificity might help us. We fear that we might be risking essentially kicking this down the road once the second early protocol is chosen this week and then engaging in subsequent sessions or working group meetings, but approaching the topic that we have selected with starkly different perspectives. For Singapore's views, we note that the first protocol topic on taxation of income derived from the provision of cross-border services is quite complex. as colleagues have already indicated. And preliminarily, we believe that the prevention and resolution of tax disputes could complement well the discussions on and contribute to the effectiveness of the first protocol by enhancing tax certainty and thus facilitating the conditions for economic growth. We believe that tax dispute prevention and resolution are crucial for both businesses and tax authorities. For businesses, these processes reduce financial uncertainty, minimize their legal costs, and facilitate international trade and investment. For tax authorities, the benefits include ensuring fair tax collection, saving time and resources, and promoting voluntary compliance with tax laws. And from what we're hearing so far, this topic appears to be the least contentious among the four potential protocols. And I think that should weigh on our considerations given the time constraints we are under. And I think we've seen this gain some traction so far, so perhaps that's a positive. And perhaps this might have the highest chance of securing broad adoption amongst jurisdictions. Thank you, Chair. Speaker 124 [2:43:53]: Thank you. Thank you very much, Chair. Argentina · Delegate [2:44:01]: For giving me the floor once again under this item. I agree that the background document will be useful and I welcome the news that it will be distributed to help us arrive at a decision. As regards your question in terms of the preferences of each of the delegations to be covered under the second protocol, I wish to indicate the perspective of Argentina. And I will approach this by discarding those that are of least interest. I also think it's useful to set aside those that might be controversial in terms of the topics that it might cover and also in terms of facilitating a decision within the agreed timeframe in order to elaborate the protocol. I think, you know, the more controversial it is, the more difficult it will be to arrive some sort of consensus. So in terms of the protocol on taxation of finite worth individuals, first I want to say that when the country is supporting this, say that this could be viewed from the perspective of exchange of information, I would like to point out that the terms of reference refer to exchange of information other areas, paragraph 16 does not mention exchange of information in the way that paragraph 17 does. As regards taxation of high net worth individuals, this is a wealth tax or a property tax. I think It's very difficult for us as Argentina to support this initiative. This goes against our tax policy and we do not believe that there should be asymmetries or discrimination between individuals in relation to tax. As regards the matter of IFF, illicit financial flows, our distinguished colleague from the Philippines said that this could also be approached from an information exchange perspective and so the same comment that I made earlier also applies here. And so this leaves taxation of the digitalized economy and as I said earlier I think this represents an overlap with Protocol 1 on taxation of cross-border services. This seems to be covered and not be appropriate for a second protocol in its own right. This could lead to controversy and may delay the process. If we look at other processes, it has taken more time than three years, and I do not see why it should be a shorter process here. We need to think about the resources in order to enable equity in the process. So despite what we have heard from Brazil, as regards certainty in taxation is not the only consideration when it comes to investment. It could be a consideration. So other dimensions can also allow us to achieve this certainty and help us facilitate the SDGs. And so having excluded all of the others and given that nobody has excluded these items. I think prevention resolution of tax disputes is the one that we could all agree on without too much controversy or too much delay holding up the work of this negotiating committee, allowing us to adopt a protocol in the GA by the end of 2028. Thank you. Belize · Delegate [2:48:40]: Thank you very much, Mr. Chair, and congratulations to you and the Bureau on your election. In regards to the issue at hand, it has been very helpful to hear the exchange of views on the various topics. That is useful for us to indeed begin to think about issues relating to scope in the longer term. when we get into the actual negotiation of these various protocols. I am mindful also that in the terms of reference that we adopted, there were certain commitments that were identified as being important to be integrated into the actual framework convention. I am mindful that some of the issues that we have identified in the early protocol could be addressed in terms of commitments when we develop that framework convention. I think that we should keep that front of mind We think about the early protocols themselves, um, uh, there have also been some interest in exchange of ideas about possible interlinkages between the different issues, and I think we should also keep that in mind as we deliberate upon what the second early protocol can be. Needless to say, Belize considers that the issue around dispute settlement could be useful in two regards. One, in terms of the relationship to the framework convention, but also in relation to addressing issues around tax certainty. It is not just that it is a low-hanging fruit type of issue, but it is something that structurally could support overall tax cooperation. I just wanted to place that on record. Thank you very much. Chair [2:50:22]: Thank you. Bahamas · Delegate [2:50:29]: Thank you, Mr. Chair. As agreed, there are four options of which we must choose a second protocol. The Bahamas considers the first two protocols, the taxation of a digitized economy and the measures related to illicit financial flows as broad in scope and given the anticipated scope of the first agreed protocol and the difficulty in achieving a global position on these subject matters, It might lead us to not completing our job within the three years if we choose one of these two. As such, in our view, the choices between protocols, prevention and the resolution of tax disputes, and addressing tax evasion and avoidance of high net worth individuals. Thus, I'd like to address some comments on both of these protocols. Wealth taxation is a difficult topic. It's difficult to design, difficult to implement, especially in small developing countries with limited resources and narrow economies such as the Bahamas. There is the argument in favor of wealth redistribution and a wealth tax can finance the implementation of initiatives such as the sustainable development goals, as well as financing loss and damage incurred because of a climate crisis. Alternatively, the recognition of tax competition as being important for generating important inward economic investment in small developing countries is important to those countries who have narrow economies. We see how the use of tax preferences and incentives can be effective tool for attracting investment and promoting economic growth in small economies. The risk of capital flight because of a wealth tax could be devastating to small vulnerable developing countries. These concerns may be viewed as conflicting with a broad based wealth tax. With respect to tax disputes. Tax disputes between countries are generally prevented and resolved through a combination of tax treaties, dispute resolution mechanisms, and agreed procedures. The goal is to reduce uncertainty and controversy for taxpayers and tax administrations. However, countries like the Bahamas have not had the opportunity to participate in transparent, objective, and equitable tax disputes with other countries. Instead, we have been subject to arbitrary, unilateral, and pointed decisions by individual countries, multilateral organizations, and groups of countries. Having a rules-based framework for the prevention and resolutions of tax disputes is needed to bring predictability and confidence by countries in the results and potential disputes under the convention we negotiate here in this place. I've spoken many times here on the effects of arbitrary blacklisting of countries like mine, with no avenue for a transparent dispute resolution process. The tangible effects on small island countries like the Bahamas, with a strong international financial center and services footprint, that undermines the middle class in our country, would be destructive. Given these reasons, the Bahamas supports the second protocol as the prevention and resolution of tax disputes. Thank you, Mr. Chair. Chair [2:53:41]: Thank you, distinguished delegate of Poland. Poland · Delegate [2:53:50]: Thank you very much. At first, I have to say that this time I'm not speaking and taking the floor on behalf of 27 EU member states, but in the national capacity as Poland. And I would like to say that our preference is to have a protocol on dispute resolution mechanism. And very shortly, I would like to have some comments on that preference. I think first, as a person involved in the international taxation since 25 years, These titles of the protocols are even more ambiguous for me and I really have a lot of different issues which can be covered by these titles and so the precision is needed here. But nevertheless, I think that we need to have a dispute resolution protocol. Why? Since in fact I cannot imagine international taxation treaty without dispute resolution mechanism. Of course, I can only guess what would be covered here and what will be the scope of the framework convention as such. Maybe there will be some general rules on the dispute resolution also in the framework convention. We don't know. But any international tax treaty to be effective, to be fully effective, needs dispute resolution mechanism. Because if you don't establish dispute resolution mechanism to the international tax treaty, you can have a different application of the provision of this treaty. So it is our need to have a dispute resolution mechanism. I give you example, if we have some protocol on the services, it is first protocol. And I understand that we can have some income sharing rules like double tax avoidance rules in these protocols. Again, we don't know. I can only guess. Without having dispute resolution mechanism, this protocol would not be applicable in the uniform way by the signatories. So I think Logically, we just need to have a dispute resolution mechanism established if we want to have our international treaties in the future to be fully effective. Thank you very much. Chair [2:56:57]: Thank you. The floor to the Zetengish delegate of United Arab Emirates. United Arab Emirates · Delegate [2:57:02]: Thank you, Chair. As the UAE said in its statement, opening statement yesterday, we remain committed to ensuring the long term success of the committee's work, and therefore we believe we have a responsibility to ensure the choice of the second protocol is one that as much agreement as possible can be made. We therefore support some of the comments made by the distinguished delegates already, particularly I think China did it very eloquently. and others that the protocol that would seem to best fit this profile is the one regarding dispute resolution. We also have the view that this is an area where a gap currently exists within the international taxation environment and which would provide significant benefits and certainty for businesses and taxpayers, particularly given the current time it currently takes for individuals and corporations to go through mutual agreement procedures. And in particular, we are of this view that this not only benefits the business community, but it also will benefit and save significant time for tax administrations, which can then be redirected to deal with some of the other tax leakage risks that the other protocols may pose. Finally, I'd also like to note that we appreciate the comments made by some delegates, particularly most recently from Chile. for their willingness to consider protocols that work for the majority of the room, even where it may not have been their first preference. Thank you. Chair [2:58:32]: Thank you. The sanctioned delegate of United Republic of Tanzania. United Republic of Tanzania · Delegate [2:58:41]: Thank you, Mr. Chair. Mr. Chair, Tanzania aligns with the statements made by distinguished delegates of India, Kenya, Zambia, Ghana, Nigeria, and others in supporting selection of the second protocol without requiring additional details at this stage. As I recall, for the negotiation of the TORs, we successfully reached an argument on the topic of the first protocol and identified a list of potential topics for the second protocol. In keeping with this approach, Mr. Chair, does I not believe that the selection process for the second protocol's topic should follow the same framework, allowing for a focused and structured discussion without necessitating extensive details at this juncture. These details will be thoroughly examined during substantive deliberations on the content and the text of the protocol. Tanzania emphasizes that the subject of the second protocol should prioritize areas with substantial impact on domestic revenue mobilization. Accordingly, our discussions in this organizational session should be guided by the provisions of resolution 79/235, While we acknowledge that the first protocol will address taxation of cross-border activities in the digitalized economy, we propose that the second protocol focuses on the taxation of high net worth individuals. However, we remain flexible and open to considering any topic that will significantly enhance domestic revenue mobilization in a more effective and inclusive manner. Thank you so much, Mr. Chair. Chair [3:00:23]: Thank you, distinguished delegate of India. Thank. India · Delegate [3:00:28]: You, Chair, and thank you for giving me the floor for the second time. We had indicated in our earlier intervention that we believe that the protocol related to prevention of dispute resolution would be a suitable candidate. because of its neutrality, we stand by that, but we also, I mean, going by the discussion that we've heard so far, we also believe that this is firmly rooted, this choice would firmly be rooted in the, uh, in the resolution 78230 and the terms of reference that we all agreed upon. 78230 resolution clearly says that developing countries have limited resources in handling international dispute settlement processes and prevention and resolving tax disputes is a goal. Similarly, we had enshrined the principle, the objective of certainty in the terms of reference. So all said, prevention and dispute resolution is a very suitable candidate. and it will stand firmly within the principles that we have brought ourselves together. Now, there's been this talk around the room that the second protocol should deal with domestic resource mobilization. We respect that. But that said, we also need to set up a balance. The first protocol that we have chosen is about dispute, is about domestic resource mobilization, is about fair allocation of taxing rights. But at the same time, we also need to now look at giving certainty to businesses and other stakeholders in this process. So we believe from that point of view also choosing this topic of dispute resolution, prevention and resolution of disputes would be a very fitting choice. And we need not be apologetic about it at all. And it would be one of the most suitable choices in the situation. Thank you. Chair [3:02:46]: Thank you. of Jamaica. Jamaica · Delegate [3:02:50]: Thank you, Chair. Chair, Jamaica supports as a second early protocol. dispute prevention and resolution for the reasons that have been given by others such as Singapore and India. It goes to the very heart of tax certainty and attracting investment. But also, Chair, for small developing countries, the issue of dispute prevention is even more critical. And that, um, entails how, um, how coherent our laws are, the kind of technical guidance we give, anything that can provide certainty to businesses when they seek to invest. And it is also less costly. And so for that reason, Chair, not just because the issue is less controversial, but also because of the resource issues for developing countries such as Jamaica, we support dispute prevention and resolution as a second early protocol. Chair [3:04:06]: Thank you. Distinguished delegate of Indonesia. Indonesia · Delegate [3:04:14]: Thank you, Chair. At first, we thank for the initiative that the Secretariat will distribute the paper to help us on the elaboration of its options. At this moment, while we are waiting for further details on each issue, we are supporting the taxation of the digitalized economy as our preference. for the topic of the second protocol. As we expressed in our general statement, the rapid digital transformation of the global economy has created unprecedented opportunities, but it has also exposed significant gaps in our international tax framework. It is our view that we need to adequately capture the value created by digitalized business that operate across multiple jurisdictions. that this might potentially result in tax base erosion for many countries, particularly developing economies, undermining our collective efforts to ensure fair and effective taxation. We see that the already chosen protocol emphasize element of cross-border services and we believe that there was a consideration on why we have to distinguish taxation of digitalized economy as one of the options for the second protocol. So therefore, we wish to reiterate our support to the topic of taxation of the digitalized economy as the option for the second protocol, ensuring that taxation in the digital era will contribute to stronger domestic resource mobilization, reduce inequalities in tax collection, and provide much needed fiscal space for developing countries, particularly to achieve their SDGs. However, we will, we look forward to the papers that will be distributed by the secretariat and we also look forward to engaging constructively with all delegations in the next discussion. Thank you. Chair [3:06:12]: Thank you. Stand, delegate of Spain. Spain · Delegate [3:06:30]: Thank you, Chair. Firstly, I'd like to thank you for this offer from yourself and from the Secretariat. with some background on the options and prior discussions as we have requested, and we look forward very much to this analysis to be provided by the Secretariat. All of the delegations are attempting to give a sort of preliminary vision of the second protocol out of the four that have been outlined. Many of the colleagues that spoke before me have been rather more eloquent. If we talk about IFFs, the illicit financial flows, this is a very important issue, but it is linked to exchange of information. And so given the breadth of this topic, it may not be the utmost priority in light of the limited resources and limited time given the exchange of information that might be developed later on. As regards taxation of high net worth individuals or the super rich, as we sometimes call them in Spanish, this is also a matter that is under domestic jurisdiction. without knowing exactly what we're talking about. Is this going to be a global tax or just exchange of information about the wealth or fortunes held by these individuals for the purposes of taxation domestically? Once again, this comes back to the matter of exchange of information. The digitalised economy is also being worked on in other fora, and it is also very closely linked to what has already been approved under the first protocol. So by a process of elimination, but not only that, the option relating to prevention and resolution of tax disputes, as others have also said, I think that this is a question that, is linked to mobilisation of domestic resources. Insofar as it provides greater legal certainty and creates a better environment for business operations in a country, it favours investment and therefore the mobilisation of domestic resources. I do not want to leave that matter out. Some colleagues have indicated that the not linked, but I don't share this view. So this improved climate for investment for business and the great uncertainty that this would give us means that from the point of view of Spain, this option prevention resolution of tax disputes would be the best option for the second protocol. But all of this is of course subject to the analysis and Uh, documents that we, uh, hope to receive this afternoon as basis for this decision, thank you. Chair [3:10:47]: So as we will lose interpretation in less than one minute, so we will conclude the morning session and we're going to resume the floor again on the same topic this afternoon at 3:00 PM in the same room. Thank you.