(5th meeting) Intergovernmental Negotiating Committee on the United Nations Framework Convention on International Tax Cooperation - Fourth Session
Economic and Social Council
Date: 5 February 2026
Language: English
Transcript: https://transcripts.un.org/en/asset/k1y/k1yk9g753w
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 · Khalid [0:01]:

Right. Good morning, distinguished delegates, and you're welcome to today's session. I hope some of us were able to get some rest yesterday. Those of us who didn't have multiple meetings, others had better than and those who couldn't join the ECOSOC meetings. I believe we are fresh and ready to continue our discussions this morning.

We'll begin with Article 8 on how for tax practices and see where we can get to by the end of the day.

Generally, what we've done with this particular article is to provide an idea of the goals that we are attempting to achieve with it in the first paragraph. And we also talked about the commitment to corporate. So basically taken out quite a bit of the descriptive elements that were in it in the document we discussed in Nairobi. So the current.

The current rendition says that the State Parties shall cooperate at international and regional levels to identify and deter harmful tax practices to neutralize their distortive effects and enhance the ability of all countries to tax income in accordance with their domestic laws and policies. Paragraph two reads, the State Party shall develop, enhance and implement effective tools to address harmful tax practices, including tools that provide for enhanced transparency, monitoring and identify emerging harmful tax practices and the effective taxation of economic activities that benefit from harmful tax practices.

So with this I wish to open the floor to members. I believe we've had the paper earlier on and so we are ready with our comments in terms of what we think the article should look at. So the floor is now open for comments and contributions. Please it.

Right. Germany, please and thank you for breaking the ice.

You are welcome.


Germany [3:29]:

Thank you, Mr. Coley, for giving me the floor. Good morning, distinguished delegates and colleagues. In Breaking the Ice, we would like to comment on Article 8 as follows. We first like to thank the Member States for the fruitful discussions on this article we have been having during the intercessional period and express also our gratitude to to the CO Lead and the Secretariat for providing the latest draft we see in front of us.

In our view, the draft is a step in the right direction. We welcome the fact that the previous references to tax incentives are no longer explicitly included in the current version. Implicitly, however, they naturally remain relevant. We are of the view that domestic tax incentives often form a part of the legitimate public policy strategies. Therefore, it remains key to ensure a clear distinction between substance based investment linked incentives and harmful preferential regimes.

We agree that tackling harmful tax practices remains essential to maintaining the integrity of international tax systems. To that end, we encourage striving for a proportionate approach that recognizes State's sovereign right to shape domestic tax policy. Furthermore, we should align our current endeavors, in our view, with work that already is completed or underway and other multilateral fora to avoid duplication. A balanced approach would help maintain trust and ensure that cooperation does not unduly limit legitimate fiscal policy choices. Thank you.


Chair · Khalid [5:15]:

Thank you. Germany, Russian federation. Please.


Russian Federation [5:31]:

Thank you, Chair. Thank you for giving us the floor. Good morning, distinguished colleagues. We continue our work on. Here we are on.

Article 8 is also an important article from the viewpoint of the entire text of the Convention. Furthermore, there will be a protocol prepared. Now, as regards the drafting of the article we are currently considering, we are of the view that overall we could agree with the language here. However, we would like to make a minor clarification and this refers to Article 2B. Here in 2B we suggest.

We suggest that this be complemented with a language based on the globally accepted criteria. And the reason for that is that there are various methodologies in the world prepared by various organizations. And I think that what we're talking about here is not duplicating that work, but rather working out, coming up with a more general and indeed the globally accepted at the world level principles and methodologies which are then to evaluate harmful tax practices following the single criteria established in the world. That was the first edition that we wanted to propose, as far as the language of this article goes. And the second one is this.

We are of the view that the provisions of this article in general, in their spirit, should also contain a caveat according to which the provisions of this Article cannot be interpreted in such a way as to restrict the sovereign rights of States to define and determine their own tax policies, including the establishing of certain tax regimes and beneficial tax rates, so as to support, support good faith taxpayers and individual areas, provided such measures are transparent. I thank you.


Chair · Khalid [8:03]:

Thank you, Russia Zambia. Please.


Zambia [8:11]:

Thank you, colleagues and good morning, your Excellencies. Good morning, fellow delegates.


Zambia · Africa Group [8:19]:

The Zambia speaking on behalf of the Africa Group, as the Africa Group colleague and Chair and the Secretariat, we thank you for the work done so far and for providing this text for consideration. As the Africa Group, we believe that the issue of harmful tax practices is a key issue that affects domestic resource mobilization and therefore requires international coordination and collaboration in terms of how to identify and deter harmful tax practices. And in that regard, we welcome the text that has been provided before us. That notwithstanding, we have a few suggestions in terms of edits in paragraph one, it is our view that the current wedding of paragraph one is a bit limiting and may provide misunderstandings, especially as relates to neutralizing distortive effects, because what is distortive in one country may be taken to be not distortive in the other country. And again, we know that harmful tax practices really come from the domestic laws that are within their respective States.

And therefore it is our view that probably the commitment in paragraph one, the text should just end just after the word practices such that the latter part of that paragraph from to neutralize the distortive effects enhance the ability of countries to tax income in accordance with their domestic laws and policies. We delete that part. In any case, what informs policies usually is the domestic laws and policies.

In paragraph two, we think we need to expand how we go about with the implementation in terms of the mechanisms. We note that the text provides that the State Parties shall develop, enhance and implement effective tools, but we believe that this should not be limited to tools, but even other measures that State Parties can come up with to address amphu tax practices. And therefore it is a proposal that we also insert the word measures such that we say implement effective tools and measures. And in the latter part, again of the same paragraph, we again after tools, insert and measures, then we delete that provides so that we just say and measures for then we list the tools and the measures that Member States are committing to develop and implement. In addressing this issue of harmful tax practices in C, we're also proposing that we include the words the effective taxation of economic activities that benefit from harmful tax practices, then we include at a minimum rate, as may be agreed by the State parties, we believe it to be important for the state Parties to agree the minimum rate.

Obviously, the issue of the rate is something that can be addressed in a protocol or any other instrument to see how the State Parties see what the minimum rate would apply. One key issue, obviously, if we have to ensure that there's international and regional cooperation in this fight of harmful tax practices. In terms of coordination, I think it is our belief, as also was indicated when we were in Nairobi, that it would be important to have an understanding of what harmful tax practices is and therefore the convention at the appropriate time. When we start discussing definitions, it will be important that we have a definition of what constitutes harmful tax practices so that it's clear for Member States in terms of identifying what is harmful tax practice and also how to deter the harmful tax practice, so that there's clarity in that regard. And therefore, at an appropriate time, it would be important to have that definition.

Also looking at what the delegate from Russia has proposed, I think it would be important, and we appreciate the proposal to be important to see how we can probably have a way of monitoring and identifying harmful tax practices in a coordinated way using accepted criteria. Obviously, the question will be at some point, I think when there's a protocol, I think those mechanisms can come through. But I think the spirit of what that has been proposed is something worth considering. Thank you, Chair, and thank you fellow delegates. I submit.


Chair · Khalid [13:56]:

Thank you. Zambia, United Kingdom, please.


United Kingdom of Great Britain and Northern Ireland [14:02]:

The UK of course, supports cooperation to address harmful tax practices. And just to recall some of the interventions we've made in previous sessions on this, we have kind of asked for clarity about how the commitments proposed would interact with the existing OECD forum for harmful tax practices. And today we wanted to particularly note the amended obligation to develop and enhance tools and would welcome clarity on what is intended by these provisions. I think more broadly we have questions on some of the terms referenced in this article and would still welcome an explanatory note on how we should interpret these provisions. And I think that kind of call for an explanatory note stands not just for article, for article 8, but actually more broadly, I think we would welcome something in this space across some of the articles that we are discussing today.

Thank you very much.


Chair · Khalid [14:51]:

Well noted. Uk, India, please.


India [14:58]:

Thank you, Chair.

Chair, we do agree with the intentions expressed by both our Russian delegate and the delegate from the African group for this particular article. We have a few concerns and I would like to briefly mention about the same. The first goes as to what constitutes harmful tax practices. And because we understand depending on the economic circumstances of each of the country, the harmful tax practice for one may not be the harmful practice for the other. And hence it is very important that in this particular article there is a need to identify what harmful tax practices are.

We also agree with the fact that in the present scenario it may not be really be an optimal situation considering the time constraints that we can discuss in a very elaborate manner as to what are those harmful tax practices, because we do understand there is a seriousness of the whole issue and we need in depth discussion on what harmful tax practices are. Nevertheless, we need to keep that window open because we have not done so far and therefore we propose that article. Under this article paragraph one, we propose the language the state parties agree to develop and apply common principles and standards to identify harmful tax practices that distort cross border taxation or erode the tax base of other jurisdictions. That is on paragraph one. Coming to paragraph two, we have a few suggestions.

In the current format, the paragraph brings in the tools for enhanced transparency. We believe that because now we have a whole article on exchange of information and to make to keep it in a brief and succinct manner. The aspect of enhanced transparency may be removed from here also when we are proposing the change in paragraph 1, the C limb of paragraph 2, which is the effective taxation of economic activities that benefit from harmful tax practices can also be deleted. And therefore, considering this, we propose that paragraph 2 of Article 8 can be modified as follows. The State Parties agree to develop, enhance and implement effective tools and measures that provide for monitoring and identifying harmful tax practices.

So if I can repeat myself, in the paragraph one we are suggesting that we all agree to develop and apply common principles and standards to identify harmful tax practices that distort cross border taxation or erode the tax base of other jurisdictions. And in paragraph two we all agree, I mean we may agree to develop, enhance and implement such tools and measures that provide for monitoring and identifying harmful tax practices. Thank you Chair. Looking forward for suggestions and discussion on this proposal. Thank you.


Chair · Khalid [19:07]:

Thank you. India, Canada, please.


Canada [19:13]:

Thank you Mr. Kohlid. Firstly, Canada fully supports work to deter harmful tax practices. I think consistent with some of the comments from Germany, we think it's important to recognize that there is already work done among a significant number of member states in this area and we should ensure that those processes are coordinated. At least have an understanding of how this proposed process would interact with existing processes. And I'd also like to support the comments made by Zambia with respect to the need to define harmful tax practices.

It's very difficult to agree to make commitments with respect to harmful tax practices without having an understanding of what we mean there. I think we all come to it with a certain understanding, probably based on processes that we're already involved with. But I do think it would be helpful for us to clarify whether we are looking here at mobile income exclusively or something more broadly. So I do think it is important that sooner rather than later we start discussing more explicitly what is covered by harmful tax practices. With respect to paragraph two and I think a little bit along the lines of both what the UK said, we did notice the inclusion of enhancement in paragraph two, which is also different from kind of the language also in Article 6 where it was just talking about developing and implementing.

And so we'd like an understanding of what was intended by that reference. And going back to kind of India's comments and I thank them for putting forward some alternative language. I think we'll need some time to reflect and look at the language, but I think our comment was going to be we were not sure that we saw the need for a paragraph 2, we agree that there seems to be overlap with respect to enhanced transparency and the monitoring and identifying seems to already be encapsulated in the wording that's in paragraph one right now. And we had a question with respect to paragraph C. It is not entirely sure what is intended by implement effective tools that would provide for effective taxation from activities that benefit from harmful tax practices. Not entirely clear to me.

And an explanation from the CO lead on what is is intended by paragraph C would be helpful. Thank you.


Chair · Khalid [22:29]:

Thank you, Canada. And since you asked the question to the CO lead, I think I'll repeat what I've always said that it's Member States who've come out with these things. So they are the ones required to explain. He said there should be discussions. So basically as we discuss we'll come out with what we mean by it together.

Is not the CO leader really does that I just caught data first. Thank you. Norway, please.

The MIC to Norway, please.


Norway [23:09]:

Thank you, Mr. Kholid. We welcome the efforts to to streamline this article compared to the draft we had in the third session. We also support international cooperation to address harmful tax practices and note the progress and results achieved to date, which should also inform our discussions going forward. We believe, like some others, that the listing of measures in paragraph two goes beyond the aim of having a high level commitment in the Framework Convention.

Details of the cooperation should be decided at a later stage based on thorough discussions, among other things, about what harmful tax practices conceptually would be for the purpose of this Convention. So subject to those discussions on the definition of harmful tax practices, which we would agree we need to have quite soon and we think we need to coordinate with existing frameworks for this work. We suggest merging paragraph 1 and 2 so that subletters A and B are moved up to paragraph one. And we have some some other suggestions also for drafting, we would suggest deleting some letter C as we would perceive it to be covered by the last part of paragraph one. But we note the comments from others on how they perceive subletter C. But our proposed drafting would be as follows.

The state parties shall cooperate at international and regional levels to identify, monitor and deter harmful tax practices, including emerging harmful tax practices. We would suggest to remove the next part in line with the comments made by Zambia to neutralize their distortive effect and further promote transparency and enhance the ability of all countries to tax income in accordance with their domestic laws and policies. We would agree with India that transparency would be more thoroughly covered elsewhere. So we don't need Like a full reference to that here. Thank you.


Chair · Khalid [25:49]:

Thank you. Thank you Norway Chechea, please.


Czechia [26:01]:

Thank you Mr. Cody for giving me the floor. Good morning everyone. Czechia also supports cooperation trying to deal with harmful tax practices. We would like to join the distinguished delegate of Germany and others in stating that the commitment should reflect the development achievement achieved developments achieved on other fora and should be coordinated and that it should be clear that the commitment is not limiting the state's tax sovereignty in line with principles mentioned in the ToR.

We would also like to flag that we also need to clarify how Article 8 would work in connection to Article 15 and that we need the definition of harmful tax practices so we all understand our goal here. We echo the comments made by the distinguished delegate of Canada about the necessity of the questioning the necessity of paragraph two because we should not unnecessarily restrict options of the conference of the parties and the details should be discussed in the later stage. Thank you.


Chair · Khalid [27:13]:

Nigeria, please.


Nigeria [27:18]:

Thank you Chair and thank you Khulid. Good day colleagues. Thanks for the discussion we've had so far and all the inputs that have come in for Nigeria. We recognize the importance importance of this article to be able to prevent practices that creates instability in global taxation place and the tax policy. We also understand that or recognize that harmful tax practices hamper ability of jurisdictions to mobilize resources within their jurisdiction.

So in that respect we fully support the proposal that have been put forward by the African group to make updates to what we have presently presented before us. And in supporting that proposal by ag African group we recognize that from the second part of paragraph one we see and deter her futa practices to neutralize up to law and policies. We unnecessarily restrict the development of the protocol that may followed this article Especially when we we have a provision that's sorry, I mean from and that enhance the ability of countries to tax income. That addition limit will limit the protocol that we may eventually have. And it's also important that some years down the line there might be other policy objectives apart from limiting ability of all countries to tax income.

There may be another policy objective that is identified and in that instance the ability to have the protocol or update the protocol may be hampered by that addition. So in that respect we agree with the African group that we may need to stop that paragraph one at practices that is after undeterred harmful tax practices. I think we may need to stop that paragraph there and delete other parts. And also looking at paragraph two we also support the provisions suggested by the African group and looking at 2B. We may not want to support the inclusion of or including reference to global practices because for now our understanding is that here, this is the global body, all of us are here setting rules, setting standard.

So the rules and standards we set here becomes the global norms and the global standard. So we may not think we need to make reference to another global standard when we are talking of paragraph 2B. Thank you.


Papua New Guinea [30:55]:

Chair and colleague and fellow delegates. Since this is my delegation's first intervention in this process, I would like to express our appreciation to the Chair, the CO leads, and the Bureau for their continued leadership and valued efforts in guiding this important process and to underscore Papua New Guinea's strong interest in it. Turning to Article 8 in Papua New Guinea's view, the issue of harmful tax practices is an important one, deserving of frank, focused and adequate attention, and we welcome the exchanges today. Noteworthy for my delegation is that Article 8 does not define the term harmful tax practices, as was mentioned by the African group in India and others. It is imperative that this forum provides specific criteria that state parties can use to identify harmful tax practices, such as preferential regimes, reinfencing, lack of transparency, and low effective tax rates.

When it comes to the definition segment, this should be considered. Without such criteria, state parties will have inconsistent interpretations of what constitutes harmful tax practices. This may result in disputes between States Parties over the scope of Article 8. Such disputes will undermine enforcement of Article 8 as well as cooperation between State parties. The draft text calls for cooperation to identify and deter harmful practices.

In keeping with the intention of using general language in the text of a framework, we propose that the accompanying protocol for Article 8 must contain the first, an objective criteria for identification of harmful text practices second, threshold of quantitative tests to ascertain harmful text practices and thirdly, timelines for monitoring and reporting harmful text practices. Corollid it is our considered view that in having objective standards such as this will avoid arbitrary application. Without this, there will be no benchmark for compliance and this will ultimately weaken accountability by state parties. Furthermore, the text requires cooperation at international and regional level, but it doesn't specify how this cooperation will occur. Such ambiguity can lead to implementation gaps.

This area needs to be sufficiently covered to support the effectiveness of the framework we are looking at. Co lead the text also refers to effective taxation of economic activities that benefit from harmful tax practices, but it is not explicit about what constitutes effective taxation or whether this includes substance requirements, minimum tax standards, or economic nexus standards. As the current emphasis is on a taxpayer having substantive presence in a jurisdiction before tax benefits can apply if we do not explicitly outline these in the text of the Framework, tax planning vehicles with little substance may evade their obligations and Article 8 will fall short of addressing the core drivers of harmful tax practices. Any accompanying protocol to articulate must contain mechanisms to monitor compliance by States Parties, sanction non compliance, and provide for a periodic review of the implementation of Article 8. Without such obligations, the Framework will be purely aspirational in our view.

Finally, we also Note that Article 8 does not refer to transfer pricing standards, which are often abused alongside harmful tax practices and tax treaty networks. Harmful tax practices are rarely isolated. They interact with treaty shopping, transfer pricing manipulation, as well as digital tax challenges. The Framework must utilize a comprehensive approach in that it must refer to these related areas. I thank you very much.


Chair · Khalid [35:31]:

Thank you papua new guinea france please.


France [35:39]:

Thank you very much. Co lead A very good morning colleagues.

First of all, we'd like to underscore the positive way in which this Article has evolved in comparison with the language we had in Nairobi and we think this should continue and we should stress the commitment more and the fight against harmful tax practices and less on implementation, which will not fall specifically within the Framework Convention, but rather within the Protocol or existing instruments. We think that international cooperation plays a key role in combating harmful tax practices and that should of course continue. Like other speakers have already said said, we think that the issue of defining these practices, which is very tricky, cannot be overlooked. Lastly, like others, we also think it's important to preserve the work that is being done in other bodies and which has made it possible to make significant progress on these practices over the last few years. Like for many commitments here, the issue of how to word this with the existing legal arguments is of paramount importance.

Thank you.


Chair · Khalid [36:57]:

Thank you France, Republic of Korea, please.


Republic of Korea [37:03]:

Thank you. Thank you Khalid for giving me the floor. Good morning everyone.

Korea like to thank the Khalid and the Secretariat for adjusting the language to a more high level approach reflecting the views expressed during the Nairobi Plenary. Thank you. In general, Korea supports efforts to address harmful tax practices, recognizing their importance in ensuring fair tax competition and maintaining the stability and integrity of the international tax system. That said, just like many delegations have mentioned, including Germany, uk, Canada and France, we note that discussions on related issues have already progressed considerably in other international fora. In this regard, Korea has consistently maintained the view that the Framework Convention should stick to minimizing duplication with the existing international text architecture and instead focus on addressing gaps that are not sufficiently covered under that current framework.

Lastly, Korea supports the view that expressed by several delegations that the definition of harmful tax practices would be helpful in a timely manner. Thank you.


Chair · Khalid [38:27]:

Thank you. Korea, Sweden, please.


Sweden [38:34]:

Thank you, Kohlid. Much appreciated and good morning, colleagues. Sweden recognizes the importance of this topic for the Framework Convention at this stage and in order to get back with some more detailed comments, we agree with what has been mentioned by several delegations that it would be very helpful with further clarifications to fully understand the gaps in the current systems and that this article aims to address. We think that identifying these would help us better understand how we can ensure that new commitments meaningfully complement rather than duplicate ongoing international efforts. Also so that we don't create inconsistent standards, increased administrative burdens and uncertainty for both administrations and taxpayers.

But we also look forward to reviewing the different language proposals put forward by delegations during today's session. Thank you.


Chair · Khalid [39:26]:

Thank you. Poland, united arab emirates, please.


United Arab Emirates [39:34]:

Thank you, Chair. The UAE also welcomes the international cooperation in addressing harmful tax practices. Like others, we note there is significant work already done in this space and we believe this commitment should focus on working in collaboration with existing work done in this area with the aim to identify and close gaps which are not being addressed. And as mentioned by Zambia, Canada and others, we believe the tax would benefit from a definition of harmful tax practices. We also believe paragraph two is not required as these can be further developed under a protocol and the commitment is already provided under paragraph one.

Thank you.


Chair · Khalid [40:20]:

Thank you, uae, Poland, please.


Poland [40:28]:

Thank you, Khalid, for giving the floor. First of all, I would like to thank Koulitz and Member States and Secretariat for preparation of this new proposal. We think we believe it is good way forward and we would like to underline that. So we fully support the objective to address harmful tax practices. However, we would like also to echo the comments made by Canada, Czech Republic and Norway and all the similar comments made by other countries.

Especially we would like to refer to the definition of harmful tax practices. It is very difficult to commit to something which is here not defined. We need, I think, to work on this and to think what way we should go, because we can have two ways. One way is to soften the language here in the very high level commitment, just to refer to the cooperation or in the harmful tax practices and to work on something which is not yet defined. But also we have to remember that if such a work would be done through the Protocol, for example, the protocols I understand by the definition are not.

Are not mandatory to be signed. That's why maybe we can try to go the other way, just to maybe be more precise in the Framework Convention as far as the definition of harmful tax practices are concerned, I think this is the very important issue and we need our work should be focused on this specific issue. First. Thank you very much.


Chair · Khalid [42:44]:

Thank you, Paula in Japan, Please.


Japan [42:50]:

Thank you, colleague. First, as this is my first intervention at this meeting, I would like to express my gratitude to the Chair, Colleague and Secretariat for preparing the draft. Since many points have already been raised by many colleagues, I will briefly comment on the proposed draft of Article 8. First, Japan fully supports work on addressing harmful tax practices, but we agree with others that we need to define harmful tax practice first. Regarding paragraph 2, we agree with Germany, UK, Canada, France and others that the intentions here is unclear, clear and if any new international framework to be considered issued, build on existing developments and avoid duplicate efforts with existing initiatives and instead be complementary which address any identified gaps.

In this regard, we also agree that it would also be beneficial to discuss Article 15 at an earliest stage. Thank you.


Chair · Khalid [43:59]:

Thank you. Thank you. Japan, China, please.


China [44:05]:

Thank you, Mr. Colleague. In general, we think Article 8 aligns with the High Principle. High level principle. Specifically, we think in paragraph two, the phrase shall develop, enhance and implement effective tools imposes mandatory obligation on State Parties.

Given the high complexity and technical nature of identifying and addressing harmful tax practices, especially in accordance with internationally recognized standard and criteria, this will pose challenges to the resources and capabilities of State Parties. Therefore, we suggest to modify the phrase to shall explore appropriate measures and tools which can provide State Parties with sufficient flexibility and space, thereby enhancing their motivation to sign and implement the Framework Convention. We also suggest that the same some content in paragraph 2 of this article overlap with paragraph 1 and article 10, so it can be simplified to some extent. Thank you.


Chair · Khalid [45:32]:

Thank you, Singapore. Please


Singapore [45:38]:

thank you, Kholid for the opportunity to speak. Singapore supports efforts to address harmful tax practices. But as several Member States have expressed earlier, we note that there are already substantial international efforts to address this issue, particularly the FHTP and BEPS Action 13 on CBCR reporting. Given the substantial work undertaken by many developed and developing countries and we have invested significant resources in implementing these widely adopted standards, we think the FC commitments should be coherent with existing standards to avoid duplicative work and conflicts.

If new parallel frameworks or additional efforts are needed, there should be some clarity on the gaps in the current regimes and interactions with existing standards to minimize duplicative or conflicting frameworks. Thank you.


Chair · Khalid [46:31]:

Thank you. Indonesia, please.


Indonesia [46:35]:

Thank you, Colleague. And also this is my first time taking the floor in the session. I would like to extend my appreciation to Chair, Colleague and Member States and Secretariat for the hard Work on preparing this session. On this article, Indonesia recognized the importance provision addressing harmful tax practices and that effective international and regional cooperation is essential to identify prevent counter suspect such practices. While we also agree on the importance of the definition of harmful tax practices, we also wish to underline that the importance of this article to be non prescriptive normative approach setting out the direction and principles of cooperation without binding state parties to specific technical standards or predetermined policy models.

We also see the importance to recognize that cooperation conducted shoal in accordance with the domestic law and policies to ensure that the provision strengthen countries to ability to design tax systems suited to their national circumstances and development priorities. Thank you.


Chair · Khalid [47:44]:

Thank you Indonesia, Belgium please


Belgium [47:48]:

thank you Chair and thank you for the work done also by the Secretariat on this article we would like to further explain explore the proposals that have been made by other groups. I do want on the African group proposal. I don't really understand why it is limiting to add the to neutralize their distortive effectives. It's more like explaining what the objective is. Don't see this as a limitation and otherwise I agree with what many others have said or Belgium agrees with what uk, Canada, France, Germany, Norway, Korea, Czechia, Singapore also China, UAE has set and Sweden on we want to understand what the gaps are with the current system and we think that the work should be complementary for what exists already.

Another question that I also had on paragraph two. It seems like it is maybe not necessary to put it here in this way. So the China proposal on Shell endeavor or shall explore was it that they said would be interesting and also to make it shorter because specifically on point C the delegates of Papua New guinea also said what do we mean with this effective taxation? And it has to be clarified. It has changed also towards what we had before on minimum taxation which was mentioned.

So we mean something different here then what are we meaning? So again the necessity of having definitions to fully understand as country and as delegates, what are we discussing both on what is the harmful tax practices that we are envisaging precisely and then this effective taxation, if it has to be explored, we need to know what is meant by it. And also again the repetition of effective tools to effective taxation. I don't really grasp what what we are intending to do here. Is it a minimum taxation in any case then or not?

Again, I think the second part is more is going too far and is not at its place here the way it's put here in the Framework Convention. Thank you.


Chair · Khalid [50:09]:

Thank you. Belgium, Kenya please


Kenya [50:14]:

Thank you Chair. We align with the submission made by made by Nigeria and Zambia on behalf of the Africa Group.

We also find merit with the concerns and the draft language proposed by the delegates from India and Russia under paragraph 1. Maybe just to answer the question that has just been raised, the words distortive effects, we find that as a qualifier limiting because if a country argues that their practice does not have any distortive effects, then they could also argue that that commitment does not apply to them and the measures that would counter such practices would then also be argued not to be applicable. So it's just stating that having a qualifier there would be would also limit the application of that commitment. We agree that the common standards by which practices will be determined to be harmful should be developed under the UN as a global platform. We therefore don't support the adoption or preservation of standards that were developed in a way that excluded a large number of countries in the room, but that those existing standards will be measured against what what will now be developed under the UN as a global platform under paragraph 2C.

We share the view that the term effective taxation is very subjective and can be interpreted very differently across jurisdictions. It will therefore be important for state parties to agree, probably at a later stage, on what will be considered or defined as effective taxation to ensure effective implementation of this commitment. Thank you, Chair.


Chair · Khalid [51:59]:

Thank you. Kenya Lazenberg, please.


Luxembourg [52:04]:

Thank you, Chair. We would also like to echo the Comments about Article 8, paragraph 2C. We believe that the word effective does not really have its place there because these regimes, these harmful tax practices, we think, should be deleted and, and so therefore the effective taxation would not come in play. We also support the proposal to delete the part of paragraph 1 after harmful tax practices. So all that is to neutralize their distortive effects.

And in general, we believe that the work from other instances, like the FHTP, should also be recognized and like other Member States have said, definitions should be be provided. Thank you so much.


Israel [52:53]:

Thank you. Lenberg Israel, please. Thank you, Chair. Extensive work has already been done on harmful tax practices in other fora leading to corresponding amendments in internal legislation. To avoid duplication of effort, we should take those developments into account, see if there are gaps and then we can apply to them, but not to have duplicated work that needs to adjust another legislation.

We concur with delegations that talked before on the necessity of definition of harmful tax practices. We want to know what it is, what we are signing to. We also support the UK that explanatory notes to this article and all the articles of the Convention should be developed alongside the convention tax itself. Thank you, Chair. Chair.


Chair · Khalid [54:11]:

Thank you. Senegal, please.


Senegal [54:19]:

Thank you, Chairman.

First of all, Senegal supports the proposal of the African group, as was expressed by the distinguished delegate of Zambia. We believe that Article 8 could, in its current wording, pose implementation issues. Indeed, setting a goal to neutralize efforts to distort. To deal with distortive effects without accurately defining these effects could pose problems. And that is why we support the deletion of to neutralize up until the end of paragraph one.

In paragraph two, we believe that the development of tools to combat harmful tax practices should be understood at the international level in the context of tools which need to be clear, inclusive in nature. In its current wording, the paragraph does not really reflect that goal that we should set ourselves. Thank you.


Chair · Khalid [55:30]:

Thank you. Senegal, Peru, please.


Peru [55:39]:

Thank you very much, Mr. Chairman. Like other delegations, we think it's important to clarify how we're going to implement what we state in Article 8.

And I also think we need to have clarification whether or not the work in other fora will be drawn upon in this effort. As was clearly said by Belgium, we need to see if this article will cover something that other fora and documents are not currently covering. We need to be careful about the overlap in these areas. Thank you.


Chair · Khalid [56:23]:

Thank you. Saudi Arabia, please.


Saudi Arabia [56:29]:

Thank you, Khalid. First, we see the importance and recognize the objective of Article 8, Harmful Tax Practices. And we would like to support other delegates who proposed enhancement to the text to be streamlined and focused on monitoring and preventing such practices, rather than tools primarily aimed at taxing them. We would also like to say, like many other delegates, that we should first identify and define what is harmful tax practices, and clarity is indeed needed on what is meant to cover. Thank you.


Chair · Khalid [57:16]:

Kingdom of the Netherlands, please.


Netherlands (Kingdom of the) [57:22]:

Thank you, Chair. We would like to express our strong support for the goal of this article to introduce more coordinated approaches to addressing harmful tax practices. We can benefit from coordinating with existing initiatives to address harmful tax practices. We therefore do not suggest to merely copy what has been developed, such as standards in other platforms. We are merely saying that we can benefit from coordinating with them, like other Member States suggested as well.

We are not here to duplicate existing efforts, but we are here to cooperate on international tax issues. This also includes coordination. We are grateful for the efforts made to streamline this article, and we welcome the calls for a clear definition of harmful tax practices or for objective criteria to determine harmful tax practices to be established for the application of this Convention. We also appreciate the textual proposals submitted by various delegations, including the Africa Group, India and Norway. We look forward to engaging further on their suggestions.

Like our colleague from the Czech Republic and Canada, we have questions regarding the necessity and value of paragraph two as currently drafted. We are cautious not to project or unnecessarily limit the ambition of the Conference of the Parties to effectively tackle harmful tax practices. If paragraph 2 is retained, we believe that Article 2, subparagraph C will require additional clarification, particularly regarding the meaning of effective taxation and who is responsible for ensuring it. Referring to minimum taxation for both individuals and non individuals in this paragraph as proposed by the Africa Group is too specific for this Framework Convention, but better placed in protocols to be developed under the Framework Convention. In our view, there is room to further elaborate on this issue in subsequent protocols under the Framework Convention.

The current wording does not prevent us from developing such protocols in the future. Thank you.


Chair · Khalid [59:32]:

Thank you. Netherlands, Austria, please.


Austria [59:37]:

Thank you, Kolid, and thanks for the work on this article. From our point of view, the language already goes in a very good direction. At the same time, we would support proposals in particular from Norway to even further streamline the language. While a lot has been said on that, there's already a lot of work out there. We have to keep sovereignty.

So all of these comments are in general supported by Austria. But I would like to focus on one particular thing that came up now very often, and that's the issue of the definition of what harmful tax practices is. While I agree and I understand the concerns that some might have, that we need to understand, of course, what we're committing to, I think I remember the discussions we had earlier on this article where there was also some agreement on the fact that we also need to be flexible in the area of harmful tax practices, because what we see today might not be be there any more tomorrow, and the harmfulness of a tax practice can change over time. Therefore, I would like to be. I would like to voice a little bit of a concern to be too prescriptive in a definition of what harmful tax practices are and avoid putting something too rigid in the Framework Convention.

It should be rather later protocols or other instruments where we will then exactly define what we would like to tackle and therefore not be limited by something that's already put into the Framework Convention. Thank you.


Chair · Khalid [1:01:24]:

Thank you, Austria. Uganda, please.


Uganda [1:01:29]:

Thank you, Khalid, for the work so far done on this article. Uganda supports inclusion of this article to promote state cooperation in tackling the challenge of harmful tax practices.

To that end, Uganda fully aligns with the position of the Africa Group, considering that there is no definition of harmful Tax practices.

The qualifying words after harmful tax practices are too prescriptive and may constrain further work aimed to support state cooperation envisaged in paragraph 1. Secondly, we note that some work has already been done to address the challenge of harmful tax practices in other fora. However, considering that not all states may have participated in this fora, Uganda proposes that this work comes up for discussion when considering the definition of the term harmful tax practices. I thank you.


Chair · Khalid [1:02:51]:

Thank you, Uganda, Hungary, please.


Hungary [1:02:55]:

Thank you. Mr. Kholid. As many before me talked about these points that I will make more eloquently, I will be very short. We would like to join the other voices in the room requesting more clarity on what we mean by harmful tax practices. And we would also like to echo delegates who pointed out that other four are already undertaking work on this issue, which we should take into account.

We would prefer complementarity and to avoid duplicates of work. Thank you.


Chair · Khalid [1:03:28]:

Thank you. Hungary, Portugal, please.


Portugal [1:03:32]:

Thank you very much, Mr. Kholid, for giving me the floor. Let me start by joining all the delegations. I believe that all the delegations, in fact that signaled the evolution that this article has been through since Nairobi until today. We also believe that it is going in fact in the right direction. This said, I just would like to signal that we go along the distinctive representatives of countries that have already questioned the necessity of us having number two, like we have in this draft.

I'm specifically remembering what has been said by Norway by what has been said by Canada. Also, we don't know if it is mandatory to have this kind of rule in this article 8 as it is now, but if the decision is to keep it, we would call the attention for the necessity to be more to to explain to us what is effective taxation of economic activities that benefit from harmful tax practices. This is review in C. And why do I say this? Because, for instance, if we think about the definition of harmful tax practices, in fact we don't have one in this article, but we somehow can use all the background that we have through the works that we already developed in other forums in these respects. But the same is not available when we try to preempt the definition of effective taxation of economic activities.

And in this case, I believe that we are a little bit entering in an unknown zone and this would be quite strange to be single out in a commitment like the one in number two. And like many other delegations, we would like to signal that we would be interest in understanding how this commitment will relate, will coordinate. We'll work together with the practices standards and even I would say that the institutionalized work that we have already developed through the years in respect of armed fault tax practices, its identification, its monitoring and also why not saying it's defensive measures against these type of regimes after we have identified them. Thank you very much.


Chair · Khalid [1:06:11]:

Thank you. Portugal, Ireland please.


Ireland [1:06:16]:

Thank you Mr. Kohlid for giving me the floor. Like many others have said, we would like to thank you, Mr. Kohlid and the Secretariat for this updated article. It's much clearer than the previous version and we appreciate the efforts to that went into that. I'd like to echo the delegate for the UK and others in that we would welcome clarity on whether the intention of this article is to sanctify our collective commitment on addressing harmful tax practices or whether it is to signal an intention to create a new mechanism for addressing the same. Ireland advocates for building upon the established frameworks for addressing harmful tax practices and identifying gaps in the current system and to avoid any duplication of efforts.

I would also echo the delegate for Zambia, Canada and others on the need for the definition of harmful tax practices. However, I take on board the point of the delegate for Austria on the need for this to be flexible. We look forward to reflecting on the various wording proposals suggested here today and I'd like to thank those delegations for suggesting a way forward for this group. Thank you.


Philippines [1:07:24]:

Thank you Ireland, Philippines please We deliver our comments as this is our first time to address the body. The Philippines would like to thank the CO lead, the members of the Committee and the Secretariat of the refinements done on the Framework Convention from the last draft on Article 8. We appreciate the amendments done to the current provision for from the last draft. It is now more high level and provides more room for parties to give me its provisions in a future protocol. We could make the provisions tighter like the other delegates have suggested and we appreciate the suggested wording provided by India and Africa Group among others.

Having said this, we agree with the statements of the Africa Group as highlighted by Kenya that while there should be recognition of the work in other fora that the same should be measured with what we are will agree on under this Framework Convention as to the definition of harmful tax practice. We agree with other delegates that there should be a clear definition of what this is in the context of the Framework Convention. But I would like to pose a question on whether the same should be defined under Article 3 or should the same be within Article 8? Thank you very much.


Chair · Khalid [1:08:38]:

Thank you Philippines. I'm sure when we agree as to whether there should be A definition or not, then we'll determine where we'll put it. Estonia, please.


Estonia [1:08:52]:

Thank you, Golit and also thank you for the new text.

I will be repeating what the others have said about the definition, but in this context I would, I'd like to draw all of our attention to the fact that we are using the same term for the time being, at least here in this Framework Convention, then at the OECD and also in the European Union. And therefore it is of utmost importance that we would make it clear whether via the help of the the future Article 15 of the Framework Convention or in some other manner, how these work streams should relate to each other. Because there's bound to be a difference in the definitions.

And therefore I do agree that it's important also to identify the gaps in the in the current work done and in the current definitions. But taking into account that we have 193 countries in this forum, it is more likely that we may come up with a less strict definition than we currently have at the OECD and the eu. It's just to know how making the compromises usually works and then we really need to establish what to do if a country has found itself in different fora how to fulfill all the obligations. As to the question of sovereignty, then I don't think it's a good idea to prescribe here what the country how the countries should address the effects of harmful tax practices, although not choosing to address them may be a harmful tax practice in itself. And in case we should run out of time before 2027, I would suggest the wording that my colleague from or the wording proposal that my colleague from Luxembourg put put forward to make the article very short because behind this commitment there will be a lot of work and if we for the time being cannot really define clearly enough what we are going to commit ourselves to, then it's better to keep the article rather short.

Thank you.


Chair · Khalid [1:11:39]:

Thank you, Estonia. Lisa Oso, please.


Lesotho [1:11:44]:

Thank you. Chair and good morning. We align ourselves with the Africans Group position and we are also open to the many improvements that have been suggested by the likes of India, the Russian Federation, NAT and others. So we are open to those improvements that have been made at a national level. Co Chair we are a bit concerned in terms of the inconsistencies that are applied to us on the standards that have been developed.

I think PNG articulated the issues quite well in that when it comes to other member states, especially developing ones, the standards are very strict. But when it comes to other they don't equally apply to those. So we strongly, as a result of that, we strongly support the idea of having a very commitment in terms of making sure that there's. There are guidelines that are developed and once the guidelines are in place, then there is proper monitoring that will ensure that sanctioning applies equally to all so that it doesn't apply to others and less to others. So that's basically our submission that we have a monetary mechanism that will be based on the definition that would have been developed.

Thank you, Chair.


Chair · Khalid [1:13:28]:

Thank you. Lisoto, United Republic of Tanzania, please. Thank you, Chair. Tanzania fully aligns with the African group position delivered by Zambia on draft Article 8. We also support the constructive language proposals advanced by India and the Russian Federation.


United Republic of Tanzania [1:13:49]:

We wish to underscore that the UN led process was initiated precisely because existing tools and approaches have not adequately addressed harmfully tax practices in a manner that is inclusive and effective for all jurisdictions. If paragraph 2 merely inherits existing frameworks without remaining their shortcomings, we risk falling short of the mandate established by the General assembly in the TOR. Accordingly, Chair Tanzania supports drafting paragraph 2 in a way that delivers clear and inclusive commitments and strengthens cooperation against harmful tax practices consistent with the General assembly resolution 79235 and the Torah which emphasizes on framework that can respond to evolving risky and and realities. Thank you, Chair.


Chair · Khalid [1:14:47]:

Thank you. Tanzania, Brazil, please.


Brazil [1:14:51]:

Well, I have a couple of elements to address the wording as it is. It is acceptable. It's not perfect, but we can work around it. It's fine. There are a lot of elements that could be clarified though or change.

To be more specific. For instance, international, regional. They're both international, I think should be global and regional.

Deter. It's not only deter. Countries should also change, should commit to change their own tax practices. Should identify change and deter. Deter is just when we are trying to address another country practice by designing something defensive.

It's not only enhanced, it is also to restore the ability. It's not ability of all countries because in harmful tax practices you affect differently different countries, not all countries at the same time. Regardless of those comments, the wording is good enough.

A second point is here. Different from other commitments, it says shall cooperate. It means that we will cooperate. We are not assuming that there are immediate actions, immediate consequences of that wording and we will cooperate, I imagine in different forms probably as well interacting with the forum, harmful tax practices and so on. How we will do it, whether we will.

We make reports about the reports that they have, whether we try to establish new standards or whether we will have our own group to study the issue that is to be decided in the future. The commitment is just that we will cooperate. And to that extent it seems clear enough. Should we have a definition what is harmful? Well, I don't think we can do.

And then we should try to pursue that. Now, harmful by definition, I think it's relational. So a reference to cross border effects as India has proposed or distortive effects in the sense that it's distortive on other countries, as mentioned in paragraph one. I think it's necessary in the first paragraph. Could we not mention it?

I think it could because we are all here deciding exactly. Harmful in other countries. So in the sense that spillover effects that are not justifiable, there are spillover effects that are reasonable and we accept them. But there are spillover effects, cross border effects that are maybe too much that we should not tolerate and that we should cooperate to address them. Most of the time under the current understanding is that we should address mobile income and mobile assets.

But that could go beyond that. That could go on to address transfer pricing practices, could address EU exchange of information practices, could address legislation that aim to attract foreign wealth individuals. So there are many options now we can exploit it. That is for us to be decided in the future how to narrow the scope.

Additionally, I think that we should start sharing the proposals in any form of WhatsApp group so that we can see the different wordings of the proposals to figure out how we can accommodate a better wording.

I think that's. Those are all the points that I wanted to make. Thank you.


Chair · Khalid [1:18:43]:

Right. Thank you brazil.

Hello everyone. Just maybe because of our colleagues Brazil intervention I would like to announce that we are going to use a new way in sharing the informal proposal that we. We receive in our informal meetings same that the proposals we received for Article 5 and we're receiving now and. And we'll keep receiving. So there will be.

It will be published on a separate section under the fourth session on the website. So whatever full proposals we are receiving here for full. Full article we're not talking about like just proposing changing a word. When we receive a full proposal for any of the articles it will be available and under the fourth section under informal meetings, reflections or interactions from member states on the articles. So almost this will be in the name.

I can get the name now from the email and just let everyone know it. But it's almost as I'm saying. So it will be whatever we will get and will be sent to us as a proposal for full article. It will Be there for so all the members can look at it and some bilaterals or even discussions can be made on these articles so everyone can see the text. Thank you.

So, yes, the proposals that would be that the member state will spill here in the floor in the plenary session. That what will go for this folder in the website and will be under so and this just work for the Biden sessions for the informal meetings. And even that's the name of the folder. So I hope this is clear. So whatever is given here and member state will spill in the floor as a full proposal, then they can send it and we put it in the floor and this work only for the binary sessions.

So our colleague Daniel just asked me for the best thing I like, which is he's proposing to go for two minutes coffee break, which of course I like. So we are going for 40 minutes coffee break, then we'll come back to continue. Thank you.


Speaker 74 [1:25:30]:

Yeah, but I feel like all this.

It will have to run like.

Like this.

It's.

It's.

What?

It.

It's.

It's.

It.

It's.

Party.


Chair · Khalid [1:33:47]:

Okay, let's. Let's settle down, please. I believe our 10 minutes is up.

Please, let's settle down so we can start the session.

I currently don't see any requests from member states, so we are moving to stakeholders. Please, if we can sit down.

So we now have ccfd Terr Solidaire. CCFD Terr Solidaire. If we can give them the microphone, please.

Wait, they are not there.

What if I just.

I'm sorry. Please go ahead.


CCFD-Terre Solidaire + GATJ · Stakeholder [1:35:10]:

I'm here. Sorry. Thank you, Mr. Chair. Thank you, colleagues, distinguished delegates.


Chair · Khalid [1:35:22]:

So can you please sit down?

Please go ahead. Okay, thank you. So I'm speaking on behalf of Cesive d' Ters Solidaire and the Global alliance for Tax Justice. As we continue to call for ambition in this convention, the discussion on Article 8 gives us the opportunity to reflect on. On the very foundations of this convention.


CCFD-Terre Solidaire + GATJ · Stakeholder [1:35:50]:

Harmful tax practices are not a peripheral issue. They are one of the clearest symptoms of a global tax system that has failed to deliver meaningful cooperation. The very reason we are here today is because the practices of a privileged few countries continue to impact the fiscal sovereignty of the majority. We are here because the tax policies of a small number of jurisdictions through preferential regimes, shell companies, deduction regimes, or carefully designed harmful incentives have direct and harmful effects on all the others. These practices ultimately hamper the basic but powerful ability of most countries, particularly of the Global south, to sovereignly raise sufficient tax revenues to fund their development.

Their public services or fight against climate change. In the meantime, the concept of harmful has been weaponized as a political tool. We have witnessed exclusive clubs of wealthy nations, no need here to give names, establish blacklists that disproportionately target the global south while systematically overlooking harmful practices within their own borders, fooling again and again a global race to the bottom. We have the impression that OECD countries are so narrowly focused on defending the OECD system that it creates a deepening north south divide in this room. Furthermore, several OECD countries in the room seem to overlook their own economic interests and forget that they are losing economic resources due to harmful tax practices.

The fact of the matter is that UN defined global rules against harmful tax practices is in the interest of the mass majority of the countries in the room. We must also confront the reality that harmful tax competition keeps evolving. The most recent and concrete example is the OECD side by side agreement which not only gives us a supplementary reason to urgently make this Convention a success, but that without any doubt opens new avenues for tax cooperation through substance based exemptions and targeted tax credits. These measures risk reproducing the very same dynamics we claim to be addressing only under new labels. Furthermore, the definition of harmful tax practices under Article 8 should be aligned with existing United nations principles and commitments as we believe that harmful must also be understood in an extensive and holistic manner.

Tax practices that undermine a State's ability to fulfill its social, environmental and human rights obligations are harmful by definition. It cannot be confined to a narrow assessment of economic effects alone. So this Convention cannot settle for best practices or voluntary guidelines. Cooperation without compliance is is not cooperation. If agreed standards are optional or if non comparative jurisdictions face no consequences, harmful practices will persist.

Not only Article 8, but the overall architecture of this Convention must therefore rest on a strong legal foundation supported by robust, transparent and collectively agreed compliance mechanisms. Finally, we must reject the the false dichotomy between cooperation and sovereignty. True sovereignty is the ability of a State to fund its own development free from the tax dodging strategies of multinational enterprises and the secrecy of non cooperative jurisdictions. This Convention offers a historic opportunity to build a tax system where every country's right to tax is protected through shared rules, mutual accountability and genuine multilateralism. Even on tax matters.

Cooperation is not a limitation on sovereignty. It is its necessary condition. I thank you.


Chair · Khalid [1:40:02]:

Thank you. We now have the Gistica Giusti Sia.


Alliance for Tax Justice (Colombia) · Stakeholder [1:40:11]:

Thank you, Chair. I'm going to speak in Spanish.


Alliance for Tax Justice (Colombia) · Stakeholder · Maria Mata Amor [1:40:17]:

Distinguished delegates, I'm Maria Mata Amor and I'm speaking on behalf of the alliance for Tax justice in Colombia. The discussion on global tax matters is not just a technical one. It's also a legal and ethical one because it is directly linked to States obligations in terms of human rights. Traditionally it has been understood that these obligations were only linked to the territorial domain. But now with international jurisprudence and United nations human rights treaty bodies they have recognized extraterritorial obligations that States have in terms of economic, social and cultural rights.

These obligations are as a result of legally binding obligations such as the UN Checked Charter and the International Covenant on Economic, Social and Cultural Rights which compels States to act.

These frameworks contain two key ideas. No State can ignore the cross border impact of their tax policies and States with greater capacities have a duty to cooperate to ensure that all countries countries can ensure full enjoyment of human rights for their citizens. General Comment 24 of the Committee on Economic, Social and Cultural Rights is clear as it says that States have to refrain from taking measures including trade agreements and tax policies that erode other States ability to collect tax, such as is the case for deliberately setting tax policy very low. In order to ensure the effectiveness of that Article, we suggest that it be strengthened through the inclusion of a clear definition of what harmful tax practices are, including those that erode the tax policy in other jurisdictions. That would make it possible to define it slightly scope and to ensure that we can correctly measure the cross border impact of these policies, we think we need to clarify the measures that States need to commit to take.

This includes reviewing internal provisions that erode other States abilities to collect tax and international cooperation needs to be beefed up through the automatic exchange of information data production and global registries to evaluate the these extraterritorial impacts of their policies. As a result of all of these reasons, we urge States to approve these amendments because it would strengthen the entire article 8 and it would strengthen the entire international tax architecture which would make it possible to ensure the maximum mobilization of resources in all countries. I thank you. Thank you. Cyi.


Chair · Khalid [1:43:15]:

Please.


Children Youth International + Major Group (Children & Youth, FfD constituency) · Stakeholder · Alexa Dominique [1:43:18]:

Thank you. Chair Distinguished Delgads colleagues My name is Alexa Dominique and I'm from the United States and I'm here on behalf of the Children Youth International and the FFD constituency of the major group of children and youth. We welcome the inclusion of Article 8 and its emphasis on strengthening international and regional cooperation to identify, address and deter harmful tax practices that may distort economic activity and undermine countries ability to tax tax income in accordance with their domestic laws and policy priorities. From the perspective of children and youth, addressing harmful tax practices is essential to promoting fair competition, safeguarding public revenues and advancing sustainable and inclusive development outcomes. Harmful tax practices, particularly those that facilitate profit shifting and erode national tax bases, continue to pose challenges for countries at all levels of development and contribute to the widening of global inequalities.

The resulting revenue losses constrain the capacity to invest in critical public services including education, health care, social protection and climate adaptation, with lasting implications for younger and future generations. We therefore support the development and effective implementation of the tools envisaged under the Article 8, including enhanced transparency, robust monitoring mechanisms and the identification of emerging harmful tax practices. In this context, transparency is central to accountability, while continuous monitoring can help ensure that new tax arrangements and incentives do not reproduce or exacerbate the existing distortions, we all we also underscore the importance of ensuring that economic activities benefiting from such practices are taxed in accordance with real economic substance, consistent with the objectives of fairness and integrity in international tax system. Finally, we underscore the importance of ensuring that cooperation to address harmful tax practices is inclusive and responsive to differing national capacities. In this regard, sustained technical assistance, appropriate data sharing and institutional strengthening can support States in effectively participating in monitoring, enforcement and implementation efforts.

We further note that meaningful engagement with civil society, including youth led organizations, can enhance oversight, legitimacy and public trust. In closing, we respectfully encourage Member States to ensure that Article 8 results in concrete, effective and implementable commitments that address harmful tax practices, strengthen domestic resource mobilization and support equitable and sustainable development for present and future generations. We thank you.


Chair · Khalid [1:45:48]:

Thank you. We have a Member State Ghana. Please. Then we continue.


Ghana [1:45:54]:

Thank you Chair.


Chair · Khalid [1:46:03]:

Mike to Mike to Ghana, please.


Ghana [1:46:08]:

Thank you Chair. Ghana alliance with African Group's position on harmful tax practices we appreciate the draft's focus on cooperation and effective tools to address these practices when the definition comes up for consideration. Ghana supports strengthening the language to include artificial arrangements like liaison offices, representatives offices, creative accounting preferential regimes and aggressive tax planning schemes. These practices erode tax basis and undermine fair competition, particularly in developing countries.

Artificial arrangements example his own officers granting treaty benefits inappropriately Preferential regimes and aggressive tax planning schemes erode tax basis and lead to unfair competition. Chair While Ghana acknowledges existing work on harmful tax practices, we believe this forum provides a unique opportunity for Member States to discuss and agree on a comprehensive approach. We should leverage on this platform to ensure all countries, particularly developing economies, benefit from the fair and effective tax system. We therefore support the institutions of measures that ensure all transactions reflect the realities of modern activities. Chair, I respectfully submit


Chair · Khalid [1:47:45]:

thank you Ghana.

Ataf, please.


ATAF · Stakeholder [1:47:52]:

Thank you Chair and thank you for giving us the floor the African Tax Administration Forum would like to align itself with the comments submitted by Zambia on behalf of the Africa Group. We also believe that the work that has been done by the Secretariat to make this article clearer is in line with moving us forward. Additionally, it's important that we keep the language of paragraph 1 as proposed by Zambia to a single sentence so that not to be too prescriptive in the article. Further, Chair, we would like to to stress that we don't see the possibility of overlaps as has been mentioned by other delegations. We see the possibility of standards or norms being set by this forum that can be met by already existing standards as prescribed in the terms of reference.

And so therefore, it is envisaged that this forum can develop standards, and where those standards meet the already existing standards, the two can mutually coexist. Lastly, we also like to support the language that has been proposed by India and others as we see that as progressive and moving us forward. Thank you.


Chair · Khalid [1:49:22]:

Thank you. Ataf Myad, please.


MYAD · Stakeholder · Leah Charleston [1:49:28]:

Thank you. Chair, distinguished delegates and colleagues, My name is Leah Charleston and I have the honor to speak on behalf of the McGill Youth Advisory Delegation. The voices of youth are often marginalized in these negotiations. Yet we are the ones who will bear the long term consequences of the decisions made by these people. In this room.

Just beyond these doors, delegates are convening to set priorities for social development, all while confronting increasingly strained financial resources. Harmful tax practices deprive member states from the necessary funds to support public service. This translates into overlooked overcrowded classrooms, underfunded health systems and delayed investments in climate resilient infrastructure. We recognize that the elimination of harmful tax practices as outlined in Article 8 is a crucial step in supporting domestic resource mobilization and and ensuring that progress in human rights and development remains robust. In this context, this Framework Convention represents a critical opportunity to strengthen global tax justice.

We particularly welcome the article's emphasis on enhanced transparency. We hope that this commitment to transparency would translate into creating spaces for civil society, particularly youth, to contribute to meaningful accountability and oversight processes. We also note that the civil society has been excluded from more substantive involvement in these discussions due to the closed nature of inter session zoom meetings and we would welcome more opportunities to participate meaningfully. At the same time, as youth, we recognize that addressing harmful tax practices requires ambition. Taking existing international standards into consideration does not preclude the development of distinct or complementary approaches where current frameworks have proven insufficient, particularly for low income countries.

The mandate of this Convention is not to replicate existing arrangements, but to build a universal, inclusive framework that responds to today's realities. Finally, we encourage Member States to ensure that Article 8 results in strong, comprehensive and forward looking commitments. Deterring harmful tax practices would reaffirm our collective commitment to support equitable and sustainable development for present and future generations. Youth cannot settle for a convention that leaves the district structural drivers of revenue loss unaddressed. We thank you.


IAHWG · Co-Chair [1:51:50]:

Thank you. We now go to Stakeholder three that's independent expert on foreign debt and international fiscal obligations.


Independent Expert on foreign debt and international fiscal obligations · Independent Expert [1:52:00]:

I thank you for the floor. I would like to remind Member States very gently of course that the whole purpose of the this treaty is the focus around sustainable development and human rights, but also around issues of fairness and equitability in line with sustainable development. An article that we just debated a day or so ago.

I would also like to echo the same concerns that I hear Member States making about the need to have a definition and clarity for Article 15 as regards the international treaty framework that Member States States are already in compliance with and need to be reflected upon here. However, in addition to that there is the principle of international cooperation and assistance. And I hear a lot of language around international cooperation, but it is incomplete in the human rights context of international cooperation and assistance and also in line with international treaty obligations of all Member States across the world. Now, if that is the first step in which I now place my context, we cannot look at arrangements that have been developed in restricted settings as being presented as global solutions. This is extremely critical because it takes not only many years to develop protocols and if we do not make clear definitions, we cannot push arguments into conference of parties because we do need to have some clarity around what will be this fairness and equitable as well as sustainable development that we intend to have as an outcome of this particular debate on harmful tax practices.

So if we need to move forward on that basis, we need to ensure that these decisions have a definition as to what harmful tax processes are currently. Not as regions or blocks, but at a global level. And they cannot be said to than be duplication because there isn't globally settled debates. While I'm fully understanding of the fact that there are huge developments in many regional and economic blocks, that exclusivity of those spaces means that you did not carry all Member States along. And I think that many of those conversations are very important within the regional blocks and that is where they must take place as well as economic blocks and and I look forward to hearing what those blocks then decide upon.

My suggestions were already submitted and as a result I was not clear if mine will be listed on the new portal, but It's a gentle reminder that it is on the system even if it is not included. And my proposed text is as follows. For paragraph one, the state parties recognize that harmful tax practices can undermine the ability of all countries to fairly tax income and capital. I am not bound in any direction whether you include the latter part of the sentence, but I think it is important to say that these include in particular tax incentives or subsidies that undermine fair and equitable taxation, again in line with Article 4 as we have been debating it, or have negative space spillover effects on other states and on paragraph 2. Accordingly, state parties undertake to refrain from harmful tact practices and agree to cooperate in developing effective standards and arrangements for combating them and including and there are three subsections, but I will mention the first is about definitions that are kept under review and revision in light of experience and as well as definitely developments.

Secondly, that they are arrangements for monitoring and evaluating potentially harmful tax practices, including on obligations for transparency and including procedures for state parties to request consultations and raise concerns in relation to potentially harmful tax practices and for a collective evaluation of these concerns and finally to have procedures to develop and authorize collective My feeling is that this sort of approach will then allow you to not only develop a protocol around it when the time comes, but will actually still allow you to have a fairly robust section within the treaty to have something to hold on to going forward, because they do take a lot of time. I thank you for your time.


Chair · Khalid [1:56:22]:

Thank you. Now I have Stakeholder 1, Committee on Fiscal Studies.


Committee on Fiscal Studies (University of Nairobi) · Stakeholder · Leila Latif [1:56:31]:

Thank you. Chair My name is Leila Latif and I'm speaking for and on behalf of the Committee on Fiscal Studies from the University of Nairobi. If I may, I'd like to draw attention to the language contained in the October 2025 draft with the one that is being discussed today with reference to Article 8. So there seems to be a clear regression in Article 8 between the drafts. The October text included an important safeguard.

It stated that tax incentives should be substance based, linked to real investment or performance, and not merely profit based. That language mattered. It directly addressed the problem of preferential regimes that attract profits without requiring genuine economic activity. Now this current draft that's on display, it deletes this site substance requirement entirely and replaces it with vague references by developing vague references with respect to developing tools for transparency and monitoring. Now that seems to be a significant weakening.

Transparency alone does not stop harmful tax practices. We already know where many of these regimes exist. So the problem is not visibility, it is the absence of constraints. Profit based preferential Regimes such as patent boxes, for example, and certain intellectual property incentives routinely allow companies to book large profits in jurisdictions where there is usually minimal activity, sometimes, for example, only a handful of employees managing licenses, while the real research and development activities are taking place elsewhere. So these regimes enable base erosion regardless of whether they are offered by traditional low tax jurisdictions or by certain states.

Now, the deleted substance requirement would have actually set a reasonable and necessary boundary that would have been important for the legal enforceability of this particular article. Preferential treatment should correlate with genuine economic activity in the jurisdictions of offering it. So without that link, we incentivize actually a race to the bottom based on profits that are paper profits rather than real investment. So it would therefore be important to reinstate the substance requirement and strengthen it with the minimum thresholds. So we remain available to share data on the types of tax incentives that have been problematic and result in base erosion and profit shifting, if that is going to support the committee to consider specific amendments to this particular article.

So also in terms of inserting a definition on harmful tax incentives, it would be really prudent to consider that such incentives do include regimes that grant tax burdens benefits in the absence of commensurate economic and even digitally mediated activities that are structured to isolate benefits from the domestic tax base, that obscure the identity of beneficiaries or the public cost of the incentive, or that primarily facilitate the artificial relocation of profits rather than the creation of real economic and even digital value. Thank you.


Chair · Khalid [2:00:05]:

Thank you. And with that, I believe we would end the discussion on Article 8 and we'll move to Article 9. We'll see where it gets to. If we aren't able to complete before lunch, we'll break for lunch and then come back and continue. Now for Article 9, what we've done based on members contributions has been one to come out with a proposed Article 10 on exchange of information, which we'll discuss after this particular article.

Then we've also tried to move into general terms on the various mutual administrative assistance types, which was the suggestion in Nairobi. Then we've also included some commitments intended to make sure that administrative assistance is provided in a smooth and timely manner. We have consequently broken it down into.

Do you have it up, please?

So we have three articles. Now first, one is State parties shall fall one another the widest measure of mutual administrative assistance in tax matters to facilitate the effective assessment of taxes and to combat tax evasion and avoidance, including through exchange of information, accordance with articles, obtain assistance in tax collection, simultaneous tax examination, test examination abroad, service of documents and any other form of mutual administrative assistance as may be agreed by the State Parties from time to time through protocols or other instruments.

Then we have two that indicate that a State part is cooperated to identify and eliminate administration administrative barriers that prevent effective mutual administrative assistance in tax matters.

3. The requested states shall act on request for assistance as soon as possible. If the request is declined, the requested State shall inform the requesting State of that decision and the reason for it as soon as possible to allow the requesting State to take further action if necessary. With that, I wish to open the floor for comments by Members and stakeholders. Okay, I have India please.


India [2:02:50]:

Thank you chair.

We appreciate the efforts made by the CO Lead and the Secretariat regarding the drafting of this Article and it is definitely concise. However, we have a few concerns which I would like to highlight here. So the paragraph first reads State Parties shall afford one another the widest measure. So we would like to seek clarification on the use of this expression widest measure of mutual administrative assistance.

We feel that this phrase appears to impose an open ended and potentially unconditional obligation which may not be adequately reflecting the domestic legal frameworks and administrative capacities of the State Parties. I mean, we suggest that if the formulation could be moderated to provide an appropriate balance and certainty, maybe by stating that State Parties shall afford one another mutual administrative assistance in tax matters without qualifying it by the phrase widest measure.

The next point which I would like to highlight is regarding the scope and purpose of mutual administrative assistance which is expressed here by using the term including through and enlisting the various methods which may be incorporated under this whole assistance mechanism.

Before that we again have a problem. While it is written to facilitate the effective assessment of taxes, India notes that the phrase to facilitate the effective assessment of taxes unduly narrows the scope of the article.

Mutual administrative assistance in tax matters extend beyond assessment and it encompasses the broad spectrum of tax administration and enforcement, including but not limited to assessment, collection, recovery, exchange of information compliance and other information related enforcement related matters and therefore we propose replacing the phrase effective assessment of taxes with effective administration and enforcement of tax matters.

Further, once the purpose is framed broadly, the detailed listing of specific forms of assistance in paragraph 1a to paragraph 1f may not be necessary because such enumeration, though illustrative, may inadvertently also limit the scope of cooperation or constrain the ability of the State Parties to agree on additional forms of assistance which may emerge in the future. Also, when we are going for a separate article on the exchange of information per se, there is no requirement of mentioning the same here, and a more general formulation would preserve flexibility and adaptability to the outcomes which may have under the Protocol, and it doesn't become a reference point, only limited to these.

Another observation which we would like to make is on paragraph 3.

We agree with the intent of paragraph 3, particularly the emphasis on the timely action and transparency where assistance is declined. However, we feel that Paragraph three appears to address an operational aspect in isolation and it may disrupt the logical structure of the Article by directly moving to one procedural step without a comprehensive operational framework in place. And therefore we are of the view that paragraph three in its present form may not by itself be sufficient to govern the practical implementation of mutual administrative assistance, and it may require further contextual or procedural elaboration, which is again maybe risking the whole structure of the Article, and therefore it may be avoided at present and we may keep a scope of enabling this in the Protocol as we would be coming in future with. Thank you, Chair. Thank you.


Chair · Khalid [2:07:50]:

Thank you, India. We have Saint Kitts and Nevis. Please.


Saint Kitts and Nevis [2:08:00]:

Thank you, colleague, for giving me the opportunity to speak on the floor, as this is my first intervention. I would like to thank you, Mr. Colleague, and the Secretariat, for the work done thus far in providing us with this draft text. St. Kitts and Nevis strongly supports the inclusion of Article 9 on mutual administrative assistance. We consider it an essential pillar of the Framework Convention.

A framework instrument should set the direction and ambition for cooperation between State Parties, while providing a clear foundation for the more detailed rules, procedures and safeguards to be developed through later Protocols or other agreed instruments. We note that the wording of Article 9 reflects language used in other international instruments in which Single Kitts and Nevis already participates. In that context, and to avoid unnecessary duplication or inconsistency across instruments, we reiterate the call made by other delegations for the early development and consideration of Article 15, and we look forward to engaging with that text once available. That said, St. Kitts and Nevis believes Article 9 would benefit from targeted refinement to ensure legal certainty as to the scope and nature of the obligation being undertaken. We share some of the sentiments presented by India in regard to paragraph one.

As drafted, the formulation shall afford the widest measure, read together with the enumerated list of measures, may be interpreted as creating immediate and unconditional commitments across all forms of assistance. Greater clarity is needed regarding the intended scope of the widest measure, particularly for small island developing States like St. Kitts and Nevis, with limited administrative capacity. Additionally, to preserve the framework character of Article 9 and clarify that the operational detail will be addressed through later instruments. We propose a modest drafting adjustment to paragraph one. Specifically, we suggest moving the language currently in subparagraph F that is worded as may be agreed by State Parties from time to time through Protocols or other instruments, into the opening part of paragraph one.

So as it is clear, the modalities and scope of assistance, including those listed in subparagraphs, either A to F, may be further elaborated through Protocols. Currently, as drafted, it appears that only subparagraph F would be addressed in Protocols. We believe that this minimal refinement would bring greater clarity to the text. Thank you, colleague.


Chair · Khalid [2:10:54]:

Thank you. Zambia. Please.


Zambia · Africa Group [2:11:02]:

Thank you, Khalid. I speak on behalf of the Africa Group. So fellow Delegates, for us as Africa Group, this article is a very key article. Mutual administrative assistance as it enhances cooperation among Member States and regions in various forms of collaborating on administrative assistance to combat tax evasion avoidance, but also to enhance capacity depending on the form of assistance that is rendered and therefore, we appreciate the text that has been proposed by Khalid and the Secretariat. That notwithstanding, we have a few comments, we appreciate the submission made by the delegate from India and we agree that there could be room to see how the issues raised by India can be accommodated.

As regards paragraph 1 and paragraph 3 from the Africa Group, we totally agree with India in terms of deleting paragraph 3, based also on what India submitted. As regards the current weakness that we see with paragraph three, however, we propose that looking at what is in paragraph one, we believe that the various forms of mutual administrative assistance have been listed there for them to be implemented. It will be important that Member States come up with a mechanism of how the rollout and implementation of the various forms of administrative assistance will be undertaken, noting also that Member States at different levels of different capacities, and therefore some of the elements of mutual administrative assistance in terms of their implementation may require different timing and capacity. And it's in that regard that we propose a text which I shall read for paragraph three. And our proposal is that the State Parties shall develop guidance, protocols or additional instruments necessary for implementation of this Article.

We believe that coming up with this guidance in the in this Article, we inform any further work that will need to be done either through a protocol that will require ratification by Member States or any additional guidance or instruments in terms of how the various forms of mutual administrative assistance will be implemented. As I've indicated, it's very important that Member States develop the implementation roadmap for the various forms and noting that States, different countries have got different views on how these can be developed and Therefore, it is our belief as Africa Group that our proposal for paragraph 3 on implementation mechanism is very key as it elaborates and removes any doubts in terms of implementation that Member States may see in paragraph 1. We believe, as Africa Group, that achieving all these forms of administrative assistance are very key so that we don't have a limitation in terms of the forms of administrative assistance, notwithstanding that obviously countries may have reservations on one or two. But it's important that the intent and principle behind this Article is to ensure that as much as possible, the majority or all forms of mutual administrative assistance, there should be a commitment that Member States to engage in such, and these are at the core of ensuring that we have enhanced international tax cooperation to deal with the current challenges we have in tax avoidance and tax evasion. So with that proposal, I submit on behalf of the Africa Group.


Chair · Khalid [2:15:22]:

Thank you. Thank you. Zambia. We now have Germany. Please.


Germany [2:15:32]:

Thank you. Mr. Kohlid. On Article 9, we recognize the importance of right ranging administrative cooperation for domestic resource mobilization. The mechanisms mentioned in paragraph 1 comprise a comprehensive toolbox. We welcome the use of these mechanisms, including simultaneous text exercise examinations and tax examinations abroad.

To specify the intended implications of the commitment, we consider it necessary to clarify its relationship to existing frameworks for mutual administrative assistance. In that regard, we see a need for interoperability to avoid an unnecessary duplication of efforts and complaints complexity and to support effective capacity building. Given the need for progress in building capacity, considerations in this regard should, in our view, remain an integral part of the process so that the commitment at hand can be accepted and effectively applied by all State Parties. We encourage the room to refrain from throwing the baby out with the bath water, thereby jeopardizing the progress that has been achieved in the field of administrative assistance over the years. With a view to existing multilateral agreements on mutual administrative assistance, it is noted that those regularly allow for restrictions by the Contracting States in the form of reservations.

We strongly recommend that such possibilities also be provided for here or that it be clarified that the commitment according to paragraph one only applies taking into account the restrictions provided for in the respective legal basis. In this context, we do not consider the term shall to be appropriate if it refers without limitation to the measures listed in the first paragraph. Specifically, we cannot support a commitment to provide assistance in tax collection to all Contracting Parties without the possibility of imposing necessary restrictions. We encourage the room to base the considerations of this article on factual realities. It should be noted that assistance in tax collection while provided for under the Mac is frequently excluded by jurisdictions through reservations.

In our experience, and based on our observations, the reasons for this vary. Administrative capacities and compatibility with domestic administrative procedures may be factors. These, while being inert, can be expected to evolve and adapt over time. More importantly, however, the provision of administrative assistance is often limited by legal obstacles stemming from constitutional law, namely rule of law principles and the fundamental rights of the individual's concerns, which are not at our disposal here. With a view to Article 3, we note that it addresses an important aspect of administrative cooperation, but it is not supposed to sufficient to establish a balance between far reaching administrative assistance on the one hand and other relevant interests and legally protected rights of both States and the individuals concerned on the other hand.

We deem it for a high level commitment, rather appropriate and sufficient to explicitly mention the fundamental principles underlying mutual administration administrative assistance. Specifically, we recommend the Article to reflect on the principle of subsidiarity and the exhaustion of domestic remedies, the principle of proportionality, the principle of reciprocity and the principle of confidentiality and protection of taxpayers rights. Thank you.


Chair · Khalid [2:19:45]:

Thank you. Germany, Switzerland, please.


Switzerland [2:19:58]:

Thank you Mr. Kohlid for the opportunity to speak and also for your efforts in further refining this important provision. First of all, I would like to state that we support the concerns respectively the sentiment that our distinguished colleague from India raised regarding the wording the widest measure. We believe this is problematic too, because also the widest measure must have its limits and we would welcome to have a reference to a certain standard in the provision so that countries know what to expect.

Regarding paragraph one, we understand that the list of the covered types of mutual administrative assistance is not exhaustive and that the covered forms are mandatory.

In that regard, we fully share the contents of our distinguished colleague from Germany that reservations are needed. Reservations are needed regarding particular forms of administrative assistance, but also regarding certain types of taxes, as this is possible under the Multilateral Convention for Administrative Assistance. In that regard, we propose in particular to have a provision in the Framework Convention that defines the taxes that are covered by the Convention or respectively that can be opted out by countries. And Article 2 of the Multilateral Convention for Administrative Assistance could serve as a starting point for such a provision.

Regarding subparagraph F in paragraph one, we ask through what or other instruments then protocols further forms of assistance could be included into the scope of this provision. For the reason of legal certainty, we would like to define in the Framework Convention predictable conditions and also procedures for an extension of the scope. In particular, a delegation of the competence to the Conference of the Parties would for us cause concerns regarding constitutionality and sovereignty. Optional Protocols to the Framework Convention are Therefore, in our view, the appropriate form for an agreement regarding the inclusion of prototypes of administrative assistance and the reference to other instruments should be deleted. In our view.

Furthermore, the provision, the general provision regarding administrative assistance should also have a reference to the protection of the rights of taxpayers. Safeguards in line with other international instruments are indispensable in the entire field of mutual administrative assistance for all its forms, and not only regarding the exchange of information. And finally, a remark regarding paragraph three. We here to share what our distinguished colleague from India stated. Not more must be explained in that respect from our side.

Thank you.


Chair · Khalid [2:23:41]:

Thank you. Switzerland, Italy. Please.


Italy [2:23:48]:

Thank you very much, Mr. Cochere. As stated also in relation with other articles, we believe that the Framework Convention should include high level commitments. And in our view, this is the case also for the provision on the mutual administrative assistance. The proposed formulation on this Article, in our view, is too specific, more appropriate for a protocol than for a Framework Convention. In our view, it would be sufficient to include only the provision in paragraph two.

But having said that, and in relation in particular to paragraph one, we have some concern. First, it is not clear the relation of this provision with the existing instrument, in particular the Convention on Mutual Administrative Assistance, which is an existing international legal instrument signed and ratified by a large number of countries and jurisdictions, including many Member States of the United nations, and characterized by a wide coverage interest terms of instrument for administrative assistance on tax matters. And so, in our view, this international instrument should be preserved and the relation with this provision should be clarified. Second, and also, as highlighted by previous speakers, the notion of widest measure of mutual administrative assistance, it's very vague and it would lead to uncertainty since it raises issues about the concrete obligation that would entail. Third, the tools which are mentioned in the list of paragraph 1 require procedures and safeguards that should be clarified in a protocol.

We have similar instruments in other interactions, national instrument also, for example, in the European context, and this instrument are governed by specific procedure, rules and safeguards. On paragraph three, we concur with the issue raised by India, in particular about the provisional nature, operational nature of this provision. And so we would prefer to delete this provision. Overall, in general, we would favor a formulation which is more generic and includes more general principles than operative provisions. Thanks.


Chair · Khalid [2:26:31]:

Thank you. Italy, I think we have a little time. Brazil, Please.


Brazil [2:26:41]:

Thank you. Chair. Thank you. Sorry. Thank you, Khalid.

Well, in essence, what we have here is the same issue that we have in other commitments. To have the Shah, and whether the Shah will create automatic obligations. Currently, we have two groups in the room, so groups that are more treaty negotiators, that tend to be more specific and picky with the words. And we also have other groups that are more connected with other types of work that tend to be more flexible with the language.

The issue is from the perspective of the tax people that negotiate tax treaties, using the word here is the word shao here is literally binding and would create strong expectations or even obligations to cooperate with all those forms listed of administrative assistance. And in practicing treaties, those different forms of cooperation they come with many details and very often they are designed bilaterally and not necessarily in the public instruments, but sometimes in memorandum memoranda. And so particularly concerning is the assistance in tax collection because that deals with taxpayers rights and the design of the application of that form. That modality of mutual administrative assistance could change from country to country because it could go too far from some countries, as Germany mentioned, could be because of constitutional issues that have to be approved by the Congress, by the parliament of each country, or it could be because of the size of the country and how much they are willing to cooperate in specific cases.

In short, second comment is in relation to the widest measurements. I believe my impression is that the reference to the widest measure is that it brings the idea of best efforts obligation. Again, not an obligation connected to shall. When we use shall in widest that is too strong for treaty negotiators. One way to reconcile could be to change the shall or to qualify the shall, shall cooperate to the wisest measure, shall endeavor to cooperate, shall endeavor and.

And so on. Another comment that will resonate is what Inga mentioned, limiting it to just effective assessment that is too short. That's not the scope that we have. Again, it depends how picky you want to be with the language. But it's more than just the effective assessment.

It could be even the measures listed here, they go beyond just the assessment. They go also in the collection and enforcement of the legislation. So we can improve a bit of language there, use a broader language, or express other forms of purposes, not just effective assessment, but also collection enforcement. That is another way to improve the language. And in relation to the maybe another form to find a compromise here could be, as I believe San Kittis proposed, to move the part of as may agreed by the parties from time to time to protocol and instruments, to the first paragraph, to the chapeau, to the initial part, and not necessarily to mention all other forms of cooperation, because that's what we intend here, to design those forms of cooperation through protocols or or models of best practices to inform countries how they should proceed but definitely we still have a question whether we should mention or not the exchange of information.

So we could keep the exchange of information because it will be arguably covered in another article and then add as may be agreed from time to time as may be agreed by parties from time to time through protocol and other instruments. And I'm not sure that we should still mention the other forms we can mention but basically move that last part of F to the paragraph number one refers to in paragraph number one the exchange of information and all the forms will be subject to protocols or bilateral approaches. Thank you.


Chair · Khalid [2:31:32]:

Thank you Brazil. And we'll stop here because we have just three minutes. I'm not sure the other member states will be able to finish within three minutes so we'll stop here and then we'll continue after our break. So we'll break now and be back at 3 o' clock to start the next session. Thank you.