Intergovernmental Negotiating Committee on the United Nations Framework Convention on International Tax Cooperation - First Substantive Session 2025, 7th meeting

Good morning, everyone. I am sorry for the delay, but our chair has some difficulties and will be arriving a little bit later. As co-chair of the committee, vice-chair, sorry, co-lead and vice-chair, I'm going to take advantage of this morning session and say welcome to everyone. Thank you everyone for all this work and diligence this week. We have received input that will enable our workstream to move forward in the next phase. And because of the hard work this week, we are ahead of schedule. And therefore, we expect that the formal meeting will begin at 12:15, because we're in informal mode now, so that you are aware of that. Or at the end of, if that's earlier, of this informal meeting, whichever is later. So you're prepared for that. The Bureau met yesterday and we discussed how best to use this time productively while we are still in New York. We came up with the idea that we would have a look at paragraph 19 of the issues note on workstream 1, where the workstream has discussed the subjects of other commitments listed in paragraph 10 of the terms of reference, but however was not ready to make any proposals to the plenary with respect to them. So we're basically suggesting that we take advantage of the time we have today to listen to a discussion for members, stakeholders, etc. We think it's useful to go through the questions on which the workstream discussion was based, and we want to take advantage of the time we have. Everyone is invited to give initial high-level reactions to the questions raised. We are aware that this is not part of the agenda, so this is going to be a very informal and, of course, Members might need to have consultations, and we understand that, but we want to take use of the time. This is not meant to be a statement of country positions, but more of a technical discussion, taking advantage of the fact that we have other stakeholders and other Members who have not taken part in the workstream itself. So the idea is to focus on the challenges rather than proposed solutions and the solutions we look forward to at the later stage. So without further ado, I don't know if Daniel, co-lead of workstream one, if you want to give us some comments or we should just open the floor, but you're very welcome Daniel if you want to. make any initial comments.

Okay, thank you, Chair. What we want to do is we want to go through the slides we used when we're having the workstream meetings. because we have the various questions we raised over there that we had the discussions on. And to throw those questions to each of us so that we can comment on it, very similar to what we did on Wednesday afternoon when we looked at exchange for information. And as I mentioned, it was quite a very educative discussion because some of the things that came out were things that we hadn't even looked at or considered, even in the workstream. So we'll be very grateful that we'll put out these questions and then we attend to them. And so it covers all the other commitments in paragraph 10. So we'll start with high net worth individuals. basically, as the first slide that's over there. And the questions we asked ourselves and which we'll be grateful to get some answers to is, what are the most significant barriers each of our countries face in taxing high net worth individuals? And the questions that we raise here, is it lack of progressivity in the tax code? Is it that the tax code's definition of income does not include unrealized gains? Is it lack of information about assets held or income received in one's country or received outside the jurisdiction? Is it the ability of net high net worth individuals to move assets outside the country to low or no tax jurisdiction without detection? Is it a fear of brain drain or capital flight if tax burdens are too high? Is that they are good in this other program that countries that attract high net worth individuals which we don't have or immigrants? So these were the questions we asked ourselves in relation to high tax and high net worth individuals. And I think we can, we'll take them one by one and go through all the styles here. So each one knows, so we get some feedback.

Thank you, Daniel, co-lead for workstream one. So I open the floor as normal for, first of all, members to have, as I said, a very informal first reaction, technical discussion, to tell us if they do have any reactions.

Thank you. And those of us may have made some of the statements already in the workstream, we can still repeat them for the benefit of those who are not around in terms of those discussions. Thank you.

Thank you, Daniel. Yeah, it, you know, this has been discussed in the workstream. So it's, and the thing is not everyone has been part of the workstream. So the idea is to sort of get everyone involved in the discussion. So even if you have made those comments in the work stream, you're very welcome to repeat them here now. So first of all, we have Nigeria. Please go ahead.

Thank you very much, Chair, for this morning. And thank you, Daniel, for posing this question. I suppose that the issue of taxation of high network individuals is not a straight jacket, straightforward issue. I believe that many jurisdictions have elements of differentiating tax for high net worth individuals. Particularly if you look at the having a very progressive tax system or rate that distinguishes between the tax rate for different income stages, you will realize that high net worth persons are already in one way or the other being discriminated, being taxed. And of course, that is what we expect from society, that the haves will help the have-nots. And then coming back to your questions, your set of, I think there are seven bullet points there, I hope my eyes are still good. as they used to be, when you look at them, I think only one or two are not technical issues. The others have, maybe one or two are just things that are probably beyond what tax policy makers are able to deal with. But there's a big one that I didn't see here and that is the issue of political consideration. You find out that in many countries people who are super rich also have a lot of political powers and particularly in developing countries many of them are beyond touch or beyond the reach of the tax authorities for different reasons. And I think that issue is a key one that is missing here and that is political power or political constitution or whatever name you want to call it whereby you see the super rich deemed not to be paying as much as they should be paying because the reach of the tax officers can't touch them because they are shielded by political powers. Thank you.

Thank you, Nigeria, and thank you for that input, particularly interesting in the sense that you added something to the questions that were already there that we had seen. If I may, one of the things perhaps as well which could be interesting in this context is of course the lack of information about assets held or income received in my own country. The way that we can work perhaps on how different countries, just in a context of the UN, the different ways that countries actually record assets in their countries, best practices, et cetera. That could also be part of the discussion in this, because in the end of the day, the information is, of course, relevant here. India, please go ahead.

Of course, probably some of the points that I mentioned today would have been stated in our written submissions. But nevertheless, to take this discussion forward on the matter of high net worth individuals, there are three parts of this issue that we look at. One is what are the problems or what are the the difficult areas when it comes to the taxation of high net worth individuals that we have come across. Now, there are three or four of those. One is that, at least from an Indian experience, maybe the other country member states can share theirs, is that we have seen that this particular class of taxpayers use some very complex structures which creates issues in the matter of proper finding the correct incidence of tax. That is one issue that we face. The other is sometimes they are able to use certain definitions of residency, whether in the tax treaties or in such documents, which can allow them to move across jurisdictions sometimes at will. The third is the other problem that we find is the identification of beneficial ownership. That is something that many of our tax officers face in several of their tax assessments. And finally, of course, is the issue of tax competition. That is something that has to be dealt with on a separate footing, I suppose. Now, as the Chair mentioned, one of the key solutions is the exchange of information. While it is true that every jurisdiction, every member state would like to come up with its own design of taxation or taxation measures for high net worth individuals, but I think what is key to a general solution is a proper exchange of information across all member states. I think this is something that was discussed yesterday and that is why yesterday also we had mentioned that exchange of information is one of the issues that has got cross-cutting ramifications. And the taxation of high net worth individuals is one of those issues where the issue of where the tool of exchange of information is a very key thing that we can use. And in fact, then I would link it to one of the discussions we had yesterday when we were talking about the drafting of the commitment related to the fair and equitable distribution of taxes or fair allocation of taxes. I think any definition or any text that we come up with for that commitment should be carefully crafted so that even the issue of high net worth individuals can be covered in that. I think there was this discussion around the room yesterday as to whether this covers only corporate taxes or whether in the definition that was on the screen yesterday, whether high net worth individuals get covered by that formulation. So I think that is an issue that we should take into account when we draft this particular commitment and any other where we find that the issue of high net worth individuals could be of interest over there. Thank you.

Thank you very much for that, India. The secretary is going to ask a question, so go ahead, Patricia.

Thank you. Since this is a technical discussion, I'm going to take an opportunity to ask a technical question. The four issues that you raised, you started with the use of complex structures, and then your third one was the issue of beneficial ownership. So is this a question related to exchange of information? of figuring out who the real beneficial owner is in these complex structures, or is it something beyond the beneficial ownership question?

Thank you, Patricia. If India wants to reply, you're very welcome.

You're right, in fact, as of now, we have always tried, we have been able, we have tried to tackle this issue of trying to locate beneficial ownership through exchange of information. We have been successful in some places, not very successful in some other places. We have been party to certain other discussions about having registries of beneficial ownership and all, but right now the one thing that we have tried is the exchange of information to get to the bottom of this.

Thank you very much. I have Saudi Arabia and then Bahamas. Please go ahead, Saudi Arabia.

Thank you. I think we recognize the issues of high net worth individuals as a domestic matter and to benefit most from such discussion, we agree with India that this work should be within sharing of best practices and exchanging of information.

Thank you. Thank you very much. Bahamas, please.

Thank you, Madam Vice Chair. I think we need to be a little bit cautious with respect to, you know, broad stroke generalities when we're talking about matters such as, for instance, beneficial ownership, matters such as, I see, golden visa and other programs, and these broad generalities. Countries like the Bahamas have been judged, I would say unfairly, for many years. on these types of regimes. And frankly, we have invested a significant amount of capital, both human resources and money, to legitimize and to put in place beneficial ownership registries and access to beneficial ownership for countries who have concerns about, you know, taxes and the actual ownership of different structures. And so, you know, through those efforts, you know, this information is available and it's available to all of your country's tax administrations when you have a legitimate concern. So I just want to be cautious about these broad-based strokes. With respect to tax competition and the last bullet point on the slide, I think we also have to be very cautious because unless you're the United States, you tax based on residency, you don't tax based upon being a citizen of your country. And that's regardless of whether it's a low income country, low income tax country or not. And so I think the real discussion point on that has to do with a acceptable form of what tax residency looks like. And if you study the concept of tax residency and you study it in the context of different jurisdictions, It varies by jurisdiction. And a lot of times you have to go to complex case law analysis to really determine whether somebody's tax resident in a particular country or not and therefore you have the right to tax that person as a resident of your country. So I really think the discussion point from a technical point of view really should be around on this item. What are the proper parameters to constitute tax residency in a particular jurisdiction? And if certainly we have situations where you might have persons who are residents in multiple jurisdictions for multiple reasons, and then what happens when you have legitimate tax residents in multiple jurisdictions, and where are the tie breakers, where are the tax allocation rights in that context? And so I just want to be very cautious. If we're speaking about technicalities and kind of technical opinions on these topics, that we need to really speak at a technical level and not at a broad sweeping generalities on some of these topics. And so those are some of my inputs on two of the items that have been discussed when you talk about beneficial ownership and you talk about really, really the question is tax residency, not tax competition. Thank you.

Thank you, Bahamas. I have Kenya.

Greetings, Chair and distinguished members. Without running a risk of repetition, I would want to just chime in on the issue of ultimate beneficial ownership.

We would like to recognize that exchange of information is key and important. However, on the practical aspect of it, when you get information, especially in relation to trusts, you realize that by the time you're trailing this information.

You end up with an ultimate beneficial owner, which is defined as a class beneficiary. So you actually hit a snag at the tail end and you're not able to continue maybe if you're really tracking to know who the UBO is for a particular case.

Thank you.

Thank you very much, Kenya. I have Zambia.

Thank you, Chair. I think for Zambia, Definitely lack of information is one of the barriers that we have. But I think also to a greater extent, it's, we could have the information domestically, but because they're sitting in silos, that also poses a challenge because then the high net worth individuals are able to just hide information. So there's information asymmetry just not only at across border level, but also domestically as well. And on top of that, thinking obviously we are looking at extending information as one of the key to solving this issue. But in our case also is if, for example, we are anticipating signing the CRS in the future and if we do have that information, but then are we going to have the capacity to actually analyze the data? And so it's also, I think, building capacity with the data analytic skills, putting that information and all the pieces of information together to ensure that we actually get the right information to collect the right amount of tax. I think that would be one the barriers. Thank you.

Thank you very much, Sambiya. As a general comment, I think we've talked about high-level commitments, but sometimes in order to get to encompassing commitment, you actually need to go into a little bit more details. So I thank you for your input in that sense. It's necessary to also get into details in order to be able to actually reach that high level commitment. Okay, so I have before I will turn the microphone to the NGOs, I do have Brazil, so please go ahead, Brazil.

Thank you, thank you, Chair. Effective taxation of high net worth individual is a critical tool for addressing wealth inequality. So in our view, we have especially two problems here. So one important problem is the lack of information, especially the effective beneficial owner, as it was mentioned by other delegates. The problem is compounded by the global nature of modern wealth. HNWI often hold assets in multiple countries, utilizing a web of international trust, shell companies, and offshore accounts to obscure their holdings. So this is one of the problems. And in our view, other problem is the wide difference in tax systems across different countries, because this creates a significant incentive for high net worth individuals to engage in tax avoidance strategies, such as moving their assets or even their residence. The mobility of capital and individuals make it difficult for any single country to effectively tax its wealthiest citizens. without risking capital flight. So the lack of harmonizing international approach allow high net worth individual to exploit this difference, undermining the tax base of the countries they leave behind and creating a race to the bottom in tax policy. So thank you.

Thank you, Brazil. Norway, please.

Thank you, Madam Vice Chair. We have spoken to this commitment earlier, both in the AHC and also in the work streams. We thought we might contribute to this discussion by sharing our experience on the taxation of high net worth individuals as a component in our tax system. that is very important to contribute to reduce inequalities to the extent that you would like to use your tax system to do that. But of course, the design of any tax system is for the domestic preference. We have earlier also shared the view or the idea that you yourself mentioned that a sharing of best practices and experiences in this field might be very useful. We would also, from our perspective, access to information is key here. To that extent, we share the views expressed by our Indian colleague. There are, of course, many efforts ongoing to improve access to information also in the areas that are relevant to ensure the taxation of high net worth individuals. So I think we, in drafting this commitment, Maybe we should have the discussion of whether we should focus on the domestic aspects or the aspects of international tax cooperation to ensure the taxation in line with domestic law. I would also think that this commitment, as it is expressed in the terms of reference, focus on the tax evasion aspect more than the actual design of any tax system, and it seems to be interlinked with a number of other commitments. So we hope that we can also discuss the linkages between the commitments going forward. Thank you.

Thank you, Norway. I have Colombia and then Cameroon. Please go ahead, Colombia.

Thank you, madam. For Colombia, the effective taxation of high net worth individuals is one of the commitment of the framework convention is crucial because we have a very high net worth individuals. We're a country with high inequality in the distribution of income and wealth. So to have a progressive taxation system where high net worth individuals contribute more to financing the state is essential to improve the well-being of the population and ensure equal opportunities for all. So to make this tangible in the convention, I think, would certainly contribute to international tax cooperation that would help make taxation system more progressive and eliminate competition, tax competition that high network, high net worth individuals often use to pay less taxes. So we understand that there will be confronting many technical difficulties that were mentioned by other delegates and we agree that what was mentioned by India, that complex structures lead to not being able to identify beneficial owners. And so we need to have sound systems of exchange of information with other jurisdictions. The problem is that when structures are so complex that even through an exchange of information, it's possible to identify the final beneficiary owner. We also think that the risk that could exist that individuals could move to other jurisdictions changing their fiscal residence, this is also a challenge and this is due to the different rates of taxation that these individuals could move to places where taxation is lower and this is why it's very important as other delegations mentioned, the definition and clarity in establishing tax residency or fiscal residency of individuals. Thank you very much.

Thank you, Colombia.

Please go ahead.

Thank you, Madam Chair for giving us the floor regarding taxation of high net worth individuals. From our perspective, the main obstacle to taxation of high net worth individuals is access to information, especially information on income generated abroad or assets that are held abroad, because in jurisdictions that to apply the principle of globalization in terms of revenue physical persons or the where tax obligation is not limited in other words not only do you have to pay taxes that is on income that is generated in the territory of residents but also on revenue generated abroad in such case it's important to have access to information on revenue generated abroad. Otherwise, as a tax administration, it's not possible to be efficient and levy a fair tax on these individuals. Now, in terms of solutions, I think the solution remains international cooperation among states, among good jurisdictions, and which needs to be strengthened. It should not be an option. All states should be committed to participating in this kind of cooperation. The tools already exist. Exchange of intelligence, either exchange on request or automatically. Also legislation on effective beneficial owners, it's important to identify them and share information on effective beneficial owners by incorporating registries of beneficial owners so that everyone could have access in real time to the necessary information to levy taxes on these high net worth individuals.

Thank you.

Thank you, Cameroon.

I have no other Member States asking for the floor. So we would go over to stakeholders and I have NGO one, which is the Center for Economic and Social Rights. Please go ahead.

Thank you, Madam Chair. I speak on behalf of the Center for Economic and Social Rights and other civil society organizations are present here. On high net worth individuals, we would like to raise three related challenges. First, and on the scope of the commitment, we know that while the issue now refers to tax evasion and avoidance by high net worth individuals, the TORs also include a commitment to ensuring their effective taxation. And using the full TORs wording going forward is essential in our view, given that increasingly and in terms of challenges, Research shows that high net worth individuals often benefit from far lower tax rates than other groups, resulting in ineffectiveness and lack of progressivity. It is also vital that when other relevant provisions in the convention are drafted, they are sufficiently broad to encompass both individuals and corporations, as discussed earlier. We further believe that while the commitment can be written in broad and crisp terms, its text can be sufficiently actionable and self-executing for a future COP or related mechanism to advance in analysis, data production, and standard setting. and commitments assumed by some member states in the Compromiso de Sevilla and the G20 provide guiding examples of measures that a COP could take, such as exchanging best practices or devising anti-avoidance mechanisms to address the challenges being discussed right now. Second, we see a challenge on the allocation of taxing rights in connection with this commitment. We believe that allocation of taxing rights and the commitment overall should pursue the overall objective of reducing inequalities within and between countries being discussed now. And this is key to addressing broader challenges such as the climate crisis and the need for funding for sustainable development and human rights. And for this purpose, we believe the committee could, for example, explore definitions of high net worth individuals that are absolute or relative to better reflect the specific circumstances of both developed and developing countries and consider the location of assets, the residence of taxpayers, and new tailored rules to ensure that all countries are able to mobilize resources from human -- from high net worth individuals. Um, and lastly, and in line, uh, with what is being discussed, we'd like to stress the instrumentality of tax transparency for the actual delivery of this commitment, as the last challenge is that no country can tackle this problem alone. So effective taxation of high net worth individuals will require global coordination to stall the race to the bottom and enhance existing mechanisms to ensure that exchange of information covers more assets towards the creation of a global asset registry, to increase public beneficial ownership information, and to address other obstacles that countries have faced when trying to tax high net worth individuals in the past weren't relevant. Thank you, Madam Chair.

Thank you very much. I have NGO 11, which is the Greenpeace International. Please go ahead.

Thank you, Chair. We welcome the opportunity to discuss the commitment on addressing tax evasion and avoidance by high net worth individuals. Similar to the previous speaker, we strongly recommend that the commitment on this matter include the full wording from paragraph 10B from the terms of reference. This paragraph refers not only to addressing tax evasion and avoidance by high net worth individuals, but also to ensuring their effective taxation. Ensuring the effective taxation of high net worth individuals plays a critical role in closing the significant financing gap for the Sustainable Development Goals and other international agreements, as recognized in paragraphs 2 and 10c of the TOR. We would also like to recall that the issues note, paragraph 18, invites the committee to consider whether there are additional aspects of international tax cooperation that contribute to sustainable development, which should be addressed in further paragraphs of the framework convention. We recommend that the commitment on high net worth individuals be further elaborated to include a clear mandate for the effective and progressive taxation of high net worth individuals, not only in relevant jurisdictions, but also through a coordinated global effort, including specific global mechanisms to unlock wealth transparency and combat illicit financial flows. Such a mandate should reflect the principles of equity and transparency and is especially necessary in the case of individuals with cross-border income and wealth. As reflected in the F54 outcome document, progressive taxation of high net worth individuals is vital to tackling inequalities and mobilizing resources for sustainable development. We recommend that the commitment related to the taxation of high net worth individuals include language on the reduction of disparities within and between countries and the contribution it can make to both social and environmental priorities, including addressing ecological debt. Achieving a fairer allocation of taxing rights between countries is another foundational piece of the puzzle to deliver effective global mechanisms concerning the taxation of high net worth individuals. Finally, as outlined in the convention's term of reference under paragraph 13, we encourage the committee to begin discussing the relationship of this commitment and associated mechanisms to other international agreements. In this context, we also support the option of channeling revenues from high net worth individual taxation into existing UN multilateral funds for climate action and sustainable development. Thank you, Chair.

Thank you very much. In particular, I think the interaction between different commitments that you've sort of pointed out. This was very helpful. Thank you very much. Ataf, please go ahead.

Thank you, Chair. Chair, Ataf have identified two broad barriers, significant barriers to taxation of high net worth individuals. One set lies within the context of domestic framework. And like Nigeria and a few other countries have highlighted, that will include the political will to apply the existing laws and measures to hold these individuals, some of who are politically exposed, accountable by the laws of the land. This lies within our powers as sovereigns, and any time we are ready, we could take those measures with or without multilateral or even bilateral help. But of more importance to us, Chair, is the aspect that have to do with transnational or individuals who have wealth and they're able to move it across different jurisdictions. In this context, a major barrier is access to information and that has been highlighted by Cameroon and a few other countries. And you look at the existing instrument like common reporting standard, it could be very helpful in holding this individual to account, but then there's barrier to entry. The high cost of implementing those standards and the conditionality that attends its implementation means that it is hardly afforded by our members. So that is a very critical barrier. Another element is when you are even able to have access to the information, and you see this asset where they are stashed out in foreign jurisdiction, how are you able to recover it? Is there willingness in the side of the other jurisdictions to help you repatriate this asset? So this element is where we think the committee should focus on, the ones that need corporations at a multilateral level to ensure that not only do countries have access to relevant information of their residents in different countries, but also when they have such access, they are able to follow up and repatriate the asset where need be. Thank you, Chair.

Thank you very much, Attaf, and thank you in particular for adding to the complexities that we've identified already, and that's very helpful for the discussion to go for the future. I have now Honduras. Please go ahead, por favor.

Thank you. I want to endorse what Najeri said and the colleague from TAF said. often regarding net worth individuals, they often collude with each other in Honduras, where you're finding it difficult to change the situation. There have been draft bills that have been promoted by the government and other interested sectors, but these economic forces, they're economic forces that are against the adoption of these laws. There is Also, um, it's very difficult to identify the, uh, beneficial owner, so it's very difficult to determine the, uh, tax base of high net worth individuals. This not only is a problem at the local level, but also contributes to international tax evasion. For Honduras, this is a very important issue, and we think that this convention should establish very clear norms and effective instruments to deal with this, including effective exchange of information and a global public register of final beneficiaries. Thank you very much.

Muchas gracias, Honduras. I now have NGO2. which is the major group for children and youth. Please go ahead.

Thank you, Chair. I'm Vaishnavi, and I'm speaking on behalf of the FFD children and youth constituency from the major group for children and youth. As we continue to shape a fairer global tax system, it is essential to view these commitments through the lens of sustainable development and intergenerational justice. The challenges outlined, tax evasion and avoidance by high net worth individuals, illicit financial flows, harmful tax practices, and the lack of mutual administrative assistance do not exist in isolation. They directly undermine the capacity of developing countries to invest in the very systems that uphold the pillars of sustainable development, health, education, climate resiliency, social protection, peace and security. The absence of transparency around income and assets held abroad deprives nations, particularly in the global south, of the resources they need to deliver on these commitments to sustainability, climate justice, and poverty eradication. We as young people are inheriting a world burdened by inequality, ecological collapse, and shrinking fiscal space. Yet we are told to innovate, to lead, to build sustainable futures, to establish sustainable economy and for development programs to improve. It is essential to enhance public-private partnerships. It is essential for multi-billion dollar companies to work with the public sector to enhance funding for programs that support development. This can improve education and health sector worldwide, benefiting future generations. The money produced by private sector should not only benefit the private sector, but also be invested in the public sector. In every multi-stakeholder meetings, the private sector should be present. This is an effective way to bridge the gap between the public sector, the private sector, and civil society. Every dollar lost to tax abuse is dollars stolen from classrooms, hospitals, clean water, access to food, and green infrastructure. We must address this issue to ensure the security of future generations. I thank you.

Thank you very much. I have the African Union, please go ahead.

Thank you, Madam Chair, Excellencies, and distinguished delegates. The African Union would like to align its perspective with Nigeria, Kenya, Zambia, Cameroon, ATAF, and others, and also would like to extend appreciation to the co-leads for the excellent presentation. Taxing high net worth individuals fairly and effectively is central to mobilizing domestic resources. reducing inequality and achieving Agenda 2063 and the sustainable development goals. But yet, across our member states, several persistent barriers are impeding this process. First of all, we have aggressive cross-border tax avoidance and evasion schemes with many high net worth individuals using these complex offshore structures to evade taxes. Secondly, we have the limited capacity and specialized expertise in the tax administrations. In many of our countries, tax authorities lack the forensic audit skills, advanced data analytics tools, and inter-agency cooperation needed to investigate and prosecute sophisticated high-net-worth individual tax cases. Thirdly, we have the weak enforcement of assets and wealth disclosure requirements. Even where beneficial ownership register exist, inadequate verifications, loopholes, and poor interconnections with international database undermine their effectiveness. Fourthly, political economy constraints are also influencing some high net worth individual that can weaken enforcements. To address these challenges, the African Union proposes that the framework convention, first of all, embed the commitment to comprehensive information exchange covering beneficial ownership, cross-border financial accounts, and asset registries supported by capacity building for tax administrations. Secondly, it is important to strengthen global cooperation against illicit financial flows, ensuring that high net worth individuals cannot avoid legal loopholes or opaque jurisdictions. Thirdly, it is important to facilitate peer learning and exchange of best practices among member states, drawing on successful enforcement models and innovations. And lastly, safeguarding policy spaces for developing countries to design high-net-worth individual taxation frameworks can also be instrumental. Chair, taxing high-net-worth individuals effectively, as we said, is not about penalizing success. It is about ensuring that those with the greatest capacity contribute their fair share to the society from which they benefit. By addressing these barriers in the framework convention and its protocol, we can enhance equity, protect sovereignty and mobilize the resources that developing economies are looking forward to finance their development. Thank you.

Thank you very much, African Union. I have NGO 12, which is Human Rights Watch. Please go ahead.

Thank you. Thank you, Madam Chair. I speak on behalf of the Tax Justice Network and Justicia. Transparency is the beacon that exposes the shadows of tax abuse. It is the kryptonite of tax abusers and its enablers. And it is also one of the most powerful tools to ensure this convention yields gains for all states from day one. Transparency is already in principle 9E in the terms of reference. However, for the convention to achieve its objectives and for the other commitments in paragraph 10 of the TORs to be effective, transparency must be also an actionable standalone commitment from the outset. The creation of global public registries of key information such as country by country reports and key information about ownership of legal vehicles through a global registry points firmly establishing the Compromiso de Sevilla, paragraph 28, must be included as part of such a commitment on transparency. The framework convention is the vehicle to deliver on these actions. Principle nine, nine I on transparency demands the highest standard as a global norm, public access. The reasons for deviating from the public access standards should be clearly defined as an exception, as demanded by the right to access to information. Where domestic protections require safeguarding certain information, the convention must establish the obligations of states not to deny information that is critical for other states to combat cross-border tax abuses by both corporations and individuals. If there is info that needs to be protected on confidentiality and privacy grounds, this must be made compatible with pathways that allow authorities from all countries to access the information required to fulfill the various commitments of the convention. For information that continues to be exchanged between authorities, a universal standard for automatic information exchange is needed, as some states have already suggested in their submissions. Currently, there is no globally agreed upon framework designed from the outset to prioritize equitable access to tax information exchange for all willing countries tailored to their specific needs and capacities. Existing frameworks such as the OECD's Common Reporting Standard and the Crypto Asset Reporting Framework are often structured to favor wealthier nations with advanced tax administrations. These standards impose technical administrative requirements that many lower income countries cannot meet without significant support, effectively excluding them from meaningful participation. Under a standard and system of governance created by the framework convention with differentiated responsibilities, all willing countries should be able to benefit from access to key information before facing any immediate requirement to reciprocate. A subsidiary body created by the convention should manage global registries, analyze data, and provide quantitative evaluations. Madam Chair, transparency is a cornerstone of effective tax cooperation. We endorse the inclusion of a standalone actionable commitment on transparency. If these measures are not adopted as a separate commitment, they should be operationalized through cross-cutting mechanisms to operationalize other commitments. delegates, the more ambitious we are on transparency, the larger the losses for tax abusers and their enablers, and the larger the gains for all states here, with no exceptions. Thank you.

Thank you very much for those words. I have stakeholder 10, which is Bombay Chartered Accountants Society. Please go ahead.

Uh, thank you, Chair. Uh, very interesting comments are made by the, all the previous speakers, and I do not necessarily disagree with them. I, I do agree with them, but I have a different perspective. I just want to add different perspective. Uh, you know, possessing a high network doesn't become a crime. But if a guy indulges into tax evasion, that's a crime. So that's something which we should be very careful, instead of portraying someone with high net worth as a villain. Yes, progressive taxation is important, but at the same time, it should also be noted that if I take away all the capital which HNI has in the form of, let's say, 20% wealth tax year on year, then he doesn't have capital to invest. The HNIs essentially invest, they create jobs, they create wealth for the society, something which not necessarily the governments would be able to do by collecting taxes. Thank you.

Thank you very much for that clarification. Thank you very much, madam.

We would like to join with the position of the African Union from the African group in Cameroon and many other countries as well. There are several comments we should like to make in our national capacity. In Cote d'Ivoire, taxing of high net worth individuals comes up against several big obstacles. Firstly, that often these people have very sophisticated means of avoiding taxation. by means of legal hybrid structures, the use also of tax havens. Then again, there's the major problem of competition, tax competition amongst countries. And as far as Cote d'Ivoire is concerned, and I'm sure that this is a situation in many other developing countries as well, Tax competition makes it difficult to levy high levels of tax on these HNWIs when it comes to assets being secreted outside our borders. And then we're also up against political and social resistance. These are very strong forms of opposition and they're fed by the influence of economic elites on public decision-making. You have to remember that in our country in general, HNWIs are in politics and they can exert a lot of influence on political positions. Then again, the accurate assessment of the assets of these individuals, particularly when these are not listed assets, is very complex. Again, one of the major obstacles here is the absence of effective international cooperation. This means that our taxation means are rendered vulnerable. There are also ideological arguments against taxing fortunes and free enterprise. previous speakers said that HNWI are not necessarily tax evaders or criminals. Then again, there are technical, economic and political challenges halting equitable taxation applicable to these people, despite the fact that there is a broad consensus on the need to reduce inequalities. So, Madam, in our opinion, the Framework Convention should address these problems. and give all countries, in particular developing countries, guidelines, frameworks and principles so that we can persevere in obtaining fair taxation on the income and assets of these people.

Thank you. I thank you all for your input into this discussion. I do not have anyone else asking for the floor. I think I'm very pleased that we've been able to have this technical discussion because we were early and we have finished our other work that we should have -- we have to do. So very happy to have had this informal discussion to get everyone up to -- hang on -- to a little bit of what has been the discussion going on in the workstream, so that everyone has been able now to listen to that discussion, Daniel, and being up to -- informed on how the discussion is taking place. and also in particular then, of course, Member States who have not been able to take part in the workstream, but also stakeholders that have been able to give them their views today. Now, one of the things that I actually had talked to and thought about and listening to what you've said today is about information, of course, and the global assets registries. So I actually had a word with our secretariat And Patricia has been so kind to give us some views on that that we could share. Thank you, Patricia.

Thank you, Madam Chair. Again, questions, not views. But one of the -- well, maybe close to a view. We heard We've heard the need for global asset registries, and I believe that that is a very useful tool. But what we heard, starting with India and repeated by multiple member states, is the difficulty of figuring out who the ultimate beneficial owner is, particularly through these complex structures. And we heard specifically about the problem of trusts and class beneficiaries, where it can be very difficult to figure out the ultimate beneficial ownership. And so there is the series of practical problems which, you know, can be overcome, but it does require, I think, a lot of technical analysis. There is also, and this is the specific thing that the chair and I were talking about earlier, Madam Chair, earlier, is that the information Before you have a global asset registry, you sort of need to have a national asset registry or at least a way of getting the information to the global asset registry. And I've talked to various member states about where the information resides within their countries. And so a lot of it, real property, for example, is frequently not held at the national level. In my country, for example, it is at the county level, not even at the state level. And I've talked to some other countries. Madam Chair comes from a country that is much more progressive and they have a national land registry. But I think it is, you know, in order the technical work, the practical work to get to a global asset registry requires first a mapping of where that information resides in different countries. And so that is, I don't think it's necessarily conceptually difficult. It's just tedious to determine all that. But I think that that work needs to be done in order to move to the goal of having a global asset registry. So I'd be interested. Maybe it's not a problem for other countries. Maybe most of them are enlightened like Chile and have that information at in an easily accessible way, but I think we need to determine that.

Chair, please. The real chair.

Okay, just one comment on what Patricia was just saying, that you were asking about where the assets reside inside the country and which level. But actually I can tell you in some countries it doesn't design at all anywhere in the country. So they don't have at all. So even inside the country if they try to trace one of the property or one of the assets and see who is the true beneficiary of this asset, they don't have this information. So I think there should be when we are if we are looking at a global registry that should exist there should be sort of, uh, I don't know how to say, but enforcement on the national level that the real beneficial owner should, should exist, they should have this for their own national revenues and in addition to, uh, to be after that provided to the global, uh, register. And as far as I know, that there is many developing countries really suffer from these issues that they don't have any traceability to the true beneficial owner, in the national level. So I think that that's what we need to look at also, how this can be enforced for the sake of international cooperation to be enforced on the national level. And this is practice that we saw in different tax practices through the history that sometimes there is some laws or some rules are enforced on national level in order to enhance the international practice. Thank you.

Thank you very much. I got some reaction from Bahamas there. Please go ahead.

Thank you. Just to react to the query that was put by the secretariat, you know, we're talking about there's a lot of dialogue about beneficial ownership registry and exchange of beneficial ownership and now we've leaped into an asset registry which is frankly completely different than a beneficial ownership registry and in practical terms with the mobility of capital and the frequency of disposition of assets by persons throughout the world is probably an impossible thing to actually do. I think if we look at a standardized approach to, in the first instance to a beneficial ownership registry where we're talking about a standard form for entities and legal arrangements such as trusts and really who's the beneficial ownership of a trust, that depends on how the trust is structured frankly. I think that would be a good first step. And internationally we've seen this as a clear double standard in international regulatory practice where countries like the Bahamas who are deemed low tax jurisdictions are mandated to have beneficial ownership registries by the OECD where likewise most countries if not all countries under FATF standards are mandated to have some form of beneficial ownership information whether that be at the regulated entity level such as the trustee in the terms of trusts or the registered agent in terms of companies or at a registry level. And so I think that many of the countries who aren't mandated and who don't have a registry in force can And, and if that's something they support, they can look at the, really the historical double standard that countries like the Bahamas have had to live under, uh, in having to develop very mature beneficial ownership registries in our jurisdictions, um, as, as a, as a template, if that is what the consensus is in the room. I think a lot of the issues being discussed is that for many years the vast majority of countries in the room have not had to maintain to the chair's point domestically this type of beneficial ownership information compiled in a single source. And I think that is part of the trepidation that we're hearing in the room and if all countries had to live under the same standard, frankly the standard that we've had to live under for a number of years, then I think people would feel more comfortable with access to beneficial ownership information. But in reaction to the registry of assets, I think that is a completely different thing than a registry of beneficial ownership information. Thank you.

Thank you, Bahamas. And to your point, I absolutely agree. It's a completely different thing. And I think we are here in a sort of scoping and understanding mode. And one of the things that we've heard here is that you need to get information, and information is only available if you have registers and the different ways of register global assets, property, real property in your country. I would hesitate to use the word best practice, but I think this group could at least look at practices of registering and see what that is, if that's helpful to membership, because at least as the Secretariat has pointed out, in my country we do actually tax real property. And that's why we have so good register, because we need to know who they are, who has property. So, but that is, you know, these are things that are different and different policies in different countries. So the point here, what we're trying to do is a sort of scoping exercise, exchanging technical issues and then try to raise that to a high level commitment if that is possible. So Thank you for that very helpful discussion. I think we had a very good exchange and I think we have benefited from hearing inputs that have been discussed in the workstream, but then it has become more more public with these informal discussions that we've heard today. So -- and I just had a quick word with Daniel. There is other commitments if we have time. We have 20 minutes left. So please, Daniel, if you would like to present next issues to be discussed.

Okay, if you can go to the next two slides. Next slide. Next one. Next one. Yeah, okay. So we started looking at effective mutual administrative assistance on Wednesday when we looked at exchange of information. There's another leg of it which we would like some feedback on, and it relates to assistance in collection. But then there are two more questions would add to it. So the first one is what is our country experiences with assistance in collection, if any? And then what could the framework convention do to expand on existing international exchange and collection assistance mechanisms? And are there any other forms of mutual administrative assistance that we would like to see addressed in the framework convention? Since the convention mentioned mainly transparency, exchange of information, and then the collection. So please, if we have anything on those, if we could advance it.

Thank you, Daniel. So I open the floor for, first of all, membership, if there's any input you would like to share for those questions. These are questions that have been discussed in the workstream, but We now open it up for Ghana. Please go ahead.

All right. Madam Chair, thank you very much. And I think that on the issue as on the board, our stance in collection with experience as a country, we have basic challenge with respect to taxes that has to be collected across the borders. Basically, based on the fact that most of our tax treaties do not have, that is bilateral tax treaties do not have the article on assistance in collection. And also going under the existing mark, we realize that many countries have entered a reservation not to do assistance in collection. And so in as much as you are able to identify that a taxpayer resides in a country where either you have a tax treaty or you have a multilateral agreement, you are unable to collect due to this basic challenge that I have enumerated. What can be done? I think that at a high level, countries can be committed to, or countries can have the commitment to not to have reservations when it comes to assistance in collection of tax or revenue claims, and also to ensure that we don't have any limitations so that any country or other countries who do not have either bilateral tax treaties or they do not have, they are not signed on to the multilateral conventions, can have remedy under the criminal convention to enforce the attacks matters outside the jurisdiction. Thank you very much.

Thank you very much, Ghana. I don't have any other hands up. I can share my own experience when I raised this with my commissioner and he said, "We have enough problems collecting in our own country." Let's not be so negative about this. I got Zambia, please go ahead.

Thank you, Chair. I was laughing when you just made that statement because those are some of the issues we are also debating with Zambia as we prepare to sign agreement that will allow for the assistance in collection of taxes. But we do have the article in our bilateral treaties And obviously we have our own domestic debt that we're trying to sort out. And so the question is, do we have the capacity to start assisting other states in collecting the debt as well at an international level? And from our experience so far, I think it hasn't been easy, but because we have obviously committed in the Bali II treaties to do it, It's something that requires capacity, and I don't know if that's something that as we look at the convention, we could see how best we could help developing countries when it comes to building capacity, when it comes to collecting debt or cross-border debt, because domestically we are already struggling. So, yeah, I just thought I should mention from the Zambian experience. Thank you.

Thank you very much, Zambia. I got Nigeria. Please go ahead, Nigeria.

Thanks, Jay. I think the issue of assistance in tax collection may not be as complex as it looks. If I take, for example, in Africa, we have the African Mutual Agreement. which includes provisions for joint audit, provisions for assistance in tax collection. I suppose we also have in the EU agreement for those of us who are signed up to it. I think the challenge that I have, I think is that most countries do not have domestic laws enabling them to do that. For example, in Nigeria, we do not have any provision in our domestic law that enables us to collect tax for other jurisdictions. But in the new reform that we are starting from next January, we have put in our law the ability of the tax authority to assist other jurisdictions in collecting taxes. And actually, I don't think it's a matter of we are not collecting enough for our jurisdiction because we are not using anything extra other than your domestic law to do so. So even though we do not have an experience yet, we believe from next year we should be in a position to assist willing partners under our domestic law to do so. Thank you.

Thank you very much, Nigeria. I think that is exactly a point that has in my country. Lesotho, please go ahead.

Thank you, Chair. Maybe for us as a starting point, I must indicate that in the recent treaties that we negotiate, if we are not going to have assistance in collection article, then we are not going to have a treaty. The view or our standpoint is that if you are able to come and do joint audits with us and provide the information, like the colleague from Nigeria is saying, collection is not as difficult as actually building up the debt. So if you don't have that article, we are not going to have that article as a policy measure, we are not going to conclude a treat with that. And I think One big challenge that we are facing is that we perhaps need to develop capacity to be able to conserve or safeguard the debt. Because by the time we are talking as tax officials, the taxpayers already looking at ways of making sure that whatever has to be recovered disappears. So if we could, because it's a requirement under that particular article that you should be able to conserve the debt as a requested state. So if we could have capacity and look at ways as to how can and make sure that we are at least up to scratch on that, then I think more countries will be willing to assist in that regard. Thank you, Chair.

Thank you very much, Lesotho. I have Jamaica and then India. Please go ahead, Jamaica.

Thank you very much.

Thank you, Chair.

I'm just wondering for those jurisdictions here who might have assistance with tax

in tax collection and have, in fact, implemented it in their jurisdictions. I was just curious as to who bears the cost in those situations, because there's always a cost for collection.

Thank you, Jamaica, for that question. And if I may add, I think one of the problems, one of the issues, is that developing countries have less experience of this particular mutual assistance between countries. However, I do think there exists quite a lot of experience between developed countries. And in fact, I had the possibility of chairing a panel on mutual assistance, and I was really impressed by exchanges of mutual assistance between developed countries and how they have gone about this. So it would be very interesting for this group to hear about that experience, I think. So I invite those of you who have more experience of that to share that either now or in future in this workstream. So thank you for the question, and I'm sure we will get some answers, Jamaica. India and then Kenya.

Thank you, Chair. In fact, most of what I wish to say had already been said by speakers earlier, but I was very impressed by the distinguished delegate from Lesotho who said that they wouldn't have a treaty if this article was not there. We just want to tell them that we are willing to have the article. But that apart, we've Also, like some of the speakers went earlier, we've been trying to include this article in the treaties that we are renegotiating. India has already an extensive treaty network, so whenever a treaty renegotiation comes up or when we have a new treaty, we do try to get this exchange of assistance in collection article. There is hesitation in some jurisdictions, some other jurisdictions are not hesitating. Of course, the way we have done it so far is that we, while the article is there in the treaty, we sign a separate MOU to kind of operationalize it. That gives us the advantage of being able to iron out certain issues like the one that was raised by the distinguished delegate from Jamaica as to costs, as to how would we deal with when there are foreign exchange translation issues. So that formulation where there is an MOU that follows the article itself, that has always been more helpful. We have signed an assistance and collection MOU with another treaty partner and that is going very well. Our experience in this has been slow in taking off, but this is something that we are pursuing. I must say that there is more and more acceptance among our treaty partners of this position.

Thank you very much, India. Kenya and then Estonia. Please go ahead, Kenya.

Thank you, Chair, and thank you to the other colleagues that have shared their experience in this area. We see assistance in collection in particular as an area that needs international cooperation. And I just wanted to support the comments that were made by my colleague from Ghana on their experience with this. We are part of a multilateral framework that should be able to address or assist in the implementation of this form of mutual administrative assistance. But we do face challenges in that area because, as he said, a lot of our partners have placed reservations against this. And that's why one of our initial comments, I think on day one, was that yes, there might be existing frameworks, but those frameworks have not been effective in terms of implementing this. And in this area, the reservations that we usually meet on the other side of assistance in collection, they have stopped the effectiveness of that particular framework. So how we see this being addressed at the UN is to have more willingness in implementing mutual administrative assistance so that we are not, we don't have an instrument that should be able to meet this objective, but then it allows countries to place reservations that stop the assistance in collection from actually being implemented. So we would want to see more willingness in terms of this. I agree with you that we are met a lot with comments that we have struggles collecting our own tax. How should we assist other countries to collect their own? But I think having the willingness to assist and then analyzing requests as and when they come, I think that would definitely help the process and international tax cooperation would really help in this area. Thank you, Chair.

Thank you very much. Estonia, please go ahead.

Thank you. I thought I would pick up on your call to say something positive about administrative assistance. And I have to admit that in the European Union it works pretty well and we don't only assist each other in the field of direct taxes, but also excises, VAT and customs duties. Since I work for the Ministry of Finance, I don't have direct experience in this field because we only hear about the cases that have somehow gone wrong. And then the taxpayers turn to us as a last resort, hoping to get some assistance. What we have learned from our experience is that it definitely works. better between the neighboring countries or the countries that are not too far from each other. And for the assistance in collection to be really effective, it helps a lot if there is also a good personal level connection between the tax administrations, so to say that they get along well. And perhaps the most important thing is that there has to be trust. Uh, between the countries and the tax administrations and, um, yeah, I mean, it, it does work, uh, in the tax treaties we always suggest it, but if the other country says that for some reason, they might not be able to assist us or we don't see much willingness, then we never press for it because then we are concerned that perhaps we will be in a rather unequal situation there where we could be collecting the taxes for other countries, but not the other way around. And also the countries that are very far apart and where the individuals don't move that much, and there isn't too much economic activity at a particular point in time, maybe it isn't that relevant. But often we also have this discussion in the treaty negotiations that let's keep our options open and see that maybe in five to ten years we may return to this issue. So if it works, it's a great instrument. We can recommend.

Thank you very much to Estonia for sharing that positive note and also, of course, important to share the experience with other countries who do not have that experience. I don't have any other hands up. I don't know, Daniel, if you want to have some European Union. Please, go ahead.

Thank you, Madam Chair, distinguished delegates, excellencies. This is a point that is not strictly related to the question that is on the screen, but it is connected in a way with exchange of information. An exchange of information is widely acknowledged as a key instrument for tax collection, including for mutual administrative assistance. Uh, there is one issue that I would like to highlight, uh, um, which is critical for you member state and is personal data protection. Um, you as a tax experts, those are who are familiar with, uh, tax issues and exchange of information for tax purposes. for sure know the concept of confidentiality conditions and safeguards, which are important for performing exchange of information. But there is also an additional perspective to be considered, which is indeed personal data protection. For the European Union, the exchange of tax information between Member States and third countries must navigate the delicate balance between the need for touch transparency and the right to personal data protection. And we have within the EU a specific instrument, legal instrument, which is the general data protection regulation, which establishes the strict rules for processing personal data, which emphasize the need for lawful, transparent, purpose limitation, data minimization, accuracy, storage limitation, integrity amongst the other principle when treating personal data. Tax authorities that are used to engage in information exchange must adhere to this principle, ensuring that Data is collected, processed and exchanged lawfully and only for legitimate purposes. These conditions are also embedded in the European directive dealing with administrative cooperation in the field of direct taxation. My main message is to say that tax information is essential for combating tax evasion and ensuring a fair tax system, but it must be conducted in a manner that upholds the fundamental rights to data protection as enshrined as I said in the General Data Protection Regulation and other relevant EU legislation. I think that it's the purpose of this international negotiating committee to look at this issue as well when drafting the legal texts because this is important element in addition to confidentiality safeguards and conditions. Thank you, Chair.

Thank you very much for that input into this issue. And I've got Germany.

Thank you, Madam Vice-Chair. My intervention builds on the previous intervention of the distinguished delegate from Estonia. I would like to pick that up. And so speaking about the collection of taxes, that sounds a little bit like benign, but in fact the truth is it is enforcement and it's kind of almost the harshest kind of enforcement imaginable from the perspective at least of a taxpayer. And the truth is it is very intrusive. intrusive in the civil rights of the taxpayers and that requires trust. So, and it is true what was said previously, it is the trust between the administrations involved and a personal relationship is good, but what is fundamental prerequisite is the institutional trust into the judicial system of the other country jurisdiction that the enforceable decisions came to be reflective of the rule of law. And that is something that can't be ignored and has to be kind of the fundamental basis for all considerations to that end. Thank you.

Thank you very much, Germany. Now I do not have any more hands. I will just ask you for a couple of minutes to confer with the real chair. But I think we are sort of finishing. I'm being asked if there was any input from stakeholders. I didn't get any hands up, but you are very welcome to put your hand up now. Thank you very much. Thank you very much. And do you want me to close the meeting?

Yeah.

You want to close the meeting? Okay. Sorry?

We have to. We have to.

These are all technical issues that the real chair knows much better than me, but I'll do it anyway. So it's The second plenary meeting of the, sorry.

It's better you do it.

I close the informal meeting, thank you.

Hello everyone. First, I would like to apologize for arriving late this morning and starting actually late. It was because of me, but it was out of my hand. So my apologies for this. But I saw that Lisa was doing much better than me, which is a good thing. So Lisa, we want you to chair the next week. So now we need to convert to the formal mode in order to close the first session. And everyone knows that these two weeks are spread into two sessions, first session and second session. So now I think we are done with the first session. So we're going to close formally this session. And next week on Monday, we're going to open the second session for this committee. in 2025. Then we have the third session that will be in Nairobi. And then by this we have, we already to, to have three sessions within the year as we resolution. So now we are converting to a formal mood for, for this meeting. So the second plenary meeting of the committee is called to order. I declare closed the first session of the Intergovernmental Negotiating Committee on the United Nations Framework Convention on International Tax Cooperation. The meeting is adjourned. Thank you all. Just to make sure, we don't have any afternoon sessions today, so now the second session is adjourned and looking forward to see you all on Monday in the same room at 10 a.m. morning. Thank you.

Thank you, Mr. Chair.