UN Transcripts — https://transcripts.un.org/es/asset/k15/k15wubiir0
Third Session of the Intergovernmental Negotiating Committee on the United Nations Framework Convention on International Tax Cooperation — 19 November 2025
Language: en
Automatically generated transcript — may contain errors. Not an official United Nations record.

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Chair · Khalid [49:52]:

Good morning everyone.

I would like to welcome you and the last meeting of the third session and happy that we are here now and that we are able to reach this moment while we get all a lot of good thoughts and outcomes that will enable us to move to the next phase of this process.

So welcome and I think we are ready to start. We're still in Work Stream 3. We are going to continue the discussion in the last few questions and listen to your thoughts and feedback and reflections on the last few questions. Our colleague Michael from Germany will lead us through this. Over to you, Michael.


Germany · Co-Lead · Michael [50:54]:

Thank you, Mr. Chair. Good morning everyone. Dear colleagues, distinguished delegates, we will need to proceed without my co lead Marlene. Today.

There's no reason for concern. She conveys her warm greetings to us and wishes us all success. Yesterday. Yesterday noon.

We concluded the day in the midst of our discussions on dispute resolution and in concrete on approach to MAP and other mechanisms aiming at settling disputes. We heard intervention from numerous member states and as a result we did not have the opportunity to give stakeholders the floor to contribute on this topic. We will make up for that first thing this morning and of course Member states too can take this opportunity to speak. Later on we will tackle the last two questions. With that, the floor is open and we start with Latin Dad.

Thank you.


Latindad [52:16]:

Gracias, senor.

Thank you. Dear colleagues, I represent Latin dad, the tax cooperation network of Latin Americut that integrates the global tax justice organisation in civil society. We've said many times that the priority of our discussions in the Framework Convention between States should be to find mechanisms for the prevention and negotiation and not just in creating mechanisms for dispute settlement, In particular for international tax cooperation. Unfortunately, at present many disputes and international controversies in the taxation field are due to the fact that between states has been created a tax governance and structure which excludes certain people and favors multinational interests and the richest economies to the detriment of the global South.

This has led to unjust allocation of tax rights within this system.

Referring specifically to the price transfer systems and bilateral transfer pricing to ensure no double taxation which have been treaties of no dollar taxation to the benefit of multinational corporate world.

We are completely against arbitration being considered as a mechanism for dispute settlement, whether it's voluntary or compulsory.

This represents a loss of national sovereignty and implicitly considers that national legislation frameworks in countries are not reliable. The experience of arbitration in terms of international trade have meant for Latin America very high economic costs. Not just because they need to finance very long litigious processes and very expensive ones, but also judgments against Latin American countries. In the recent decade, the region has faced a strong wave of requests within the international system of arbitration, characterized by a lack of transparency in arbitration procedures, a lack of impartiality and independence of judges.

For a private One day a judge can represent a private investor, another, an arbitration court. From a perspective, arbitration is a system of domination and position. Arbitration does not mean the amicable nor conciliatory settlement of disputes.

It's more related to the possibility of favoring the strongest party in the dispute. Finally, we would like to reiterate that we need a framework convention which is robust, which strengthens multilateralism as the main mechanism of dispute settlement, which covers the feeling of an international tax governance system, which is inclusive, which guarantees tax transparency through single taxation, with a form of distribution, public reporting country by country, and which replaces the current international tax system, which is opaque, promotes tax fraud and negatively affects the economic resources of the global South. Thank you.


Germany · Co-Lead · Michael [56:49]:

Thank you. Lat. And that next is Ote.

Ote, was this an accident? Are you asking for the floor? Can we give the mic to Ote, please? To clarify,


Speaker 5 [57:39]:

I think it was a mistake.


Germany · Co-Lead · Michael [57:43]:

Understood. Then we move on to War on Want. War on Want, please.


War on Want [57:48]:

Morning, everybody. I am speaking on behalf of War

on Want and wider civil society. I wanted to complement yesterday's conversation with a couple of cautionary tales of arbitration gone wrong. In 2024, my country, the UK, closed its last coal mine. Months later, the High Court rejected applications for a new coal mine.

After 200 years of mining and burning. This rejection of coal was a major climate success, and that should have been the end of the story. But this August, as many of us were sitting in a basement in New York, news broke that a Singaporean company was suing the UK over its rejection of the coal mine, using an obscure investor state dispute settlement clause of a 1975 trade deal. Now the UK could be on the hook for millions. Similarly, in 2022, as energy industry profits

were erupting, Germany and Denmark tried to introduce a windfall tax. But a company based in Jersey dug out the 1994 Energy Charter Treaty to challenge the windfall tax and forced both countries to drop these progressive environmental measures. In tax and trade, we have clear evidence that arbitration undermines sovereignty, reduces revenues, fragments our legal systems, and has a chilling effect on environmental policy. Countries north and south should reject arbitration from this convention.

Finally, Chair, as this is one of the last civil society interventions of this session, I hope you'll indulge me. Delegates, you have the privilege of shaping a new international tax system. And the timing could not be more crucial. Inequality is exploding. We could soon see the world's first trillionaires.

Countries are losing billions to corporate tax dodging and public services are crumbling. We need to build a a new global tax system where we can tax the super rich, where we can raise trillions to fund climate action and sustainable development, and where we can redistribute resources between north and South.

So when you submit your visions for what the UN tax convention should look like on 5th of December, we implore you, be bold. Thank you,


Germany · Co-Lead · Michael [1:00:42]:

Thank you. War on want we continue with the independent expert on the effects of foreign debt.


Independent Expert on foreign debt [1:00:54]:

Good morning and thank you very much. It's hard to come after the call to action, but I will take us back into the work stream. My biggest challenge with the conversations we're having around the different types of dispute resolution is actually a question in my mind as to why we came into the area of arbitration and arbitration.

Arbitrations are confidential. You often do not get to see the proceedings. And the joke that I hear in many developing countries is that the only outcome we see is the bill that the Member State is going to undertake as to how much they're going to pay either their lawyers or the arbitrators, because this is the only thing that is traditionally allowed in public spaces. And of course that is always what we then end up speaking about. But we also are unable to develop legal precedent, we are unable to develop decisions in a particular direction, add layers onto relations, regulations and policies.

And as a result, if these different dispute resolution mechanisms are going to be considered, then very important there is the question of the fact that we are operating within a UN framework, which means that Member States, citizens in their countries have a right to access information. And this is human rights parameters, and these are binding treaties that Member States have already committed to. So it's really important that even as we look at these alternative dispute resolution mechanisms that we take this into consideration. The second reason why arbitration and other forms of dispute resolution became extremely valuable was because many developing countries actually didn't have robust legal frameworks where within their countries and judiciaries to support decision making processes. And there were concerns around the slowness and speed of judicial decisions.

Well, arbitrations are taking as long as, if not longer than judicial decisions in many countries across the world. And as a result, this argument no longer holds the value it had before. Within the UN system, there are two mechanisms of court proceedings already present which are worthwhile reflecting upon. One is the Permanent Court of Arbitration and the other is The International Court of Justice. And I think that if you are to look at dispute resolution mechanisms, it is very important to engage with the UN existing systems in place.

And they do have different procedures. They have panels that are worth considering. But I also want to return us back, which is something I have repeated several times on countries under special circumstances and how these would be managed in these diverse dispute resolution mechanisms. There was a question on what the role of the Secretariat could be, and I think the role of the Secretariat could be very valuable here. They could form panels, they could ensure that these are balanced and these are accessible if they are going to go in this direction under this Convention.

And it is very important to ensure that there is representation across all continents and across all groups. Thank you very much for your time.


Germany · Co-Lead · Michael [1:04:27]:

Thank you, African Union.


AU [1:04:32]:

Thank you, Chair, for giving us the floor. The African Union supports the reinforcement of MAP through body, protocol and best practices to make it more efficient and also more accessible. In doing so, we want to encourage members to be bold to carry out a significant review of the existing MAP design, ensuring that all the bottlenecks and all the things that make the current system inefficient is weeded out. We also want the design to take cognizance of the fact that in the context of the protocols we are developing and future protocols that may be developed under the framework, the likelihood for multilateral MAP will be higher. So the design must ensure better efficiency in application of MAP to a multilateral dispute.

With respect to paragraph J, we definitely support provision that boosts efficiency using information sharing and other similar measures. We say this because we know that this puts breeds from lack of understanding, which sometimes are direct result of lack of appropriate and accurate information. On K. We have a bit of ideas on how a penny panel that may be part of this mechanism could be composed. For instance, we believe that to be composed of government officials drawn from experts within the government of our various nations. And we say this because the expert better understand what a position of government will be be in terms of dispute.

And they also have better motivation coming from government than just picking individual experts from the street. We also do not support, just like the African group posited yesterday, we do not support inclusion of arbitration either as a CO mechanism or as optional mechanism. Nevertheless, we go back to our comment earlier on to say that map, once was reinforced, should be part of the core mechanism. And we probably could have other alternative mechanisms as a top up or backstop to map, which also should be optional to members in terms of its application after MAP may have Failed on what the role of the UN could be. I want to be specific to say that given the terms of reference, a mechanism has been mentioned, I think, in paragraph 13 of the Tor.

I believe that the UN role should be constrained to such mechanism, which may be elaborated under this current proposed Article 20 of the Framework Convention. I say that drawing also from a lot of discussion I have had with colleagues, and it could only make sense that such mechanisms are tied to that article, ensuring that there is no proliferation of mechanism. As we go into different protocols and also protocol number three in particular. These are a few thoughts for this morning, Chair, and we want to thank you again for the opportunity. We yield back.

Thank you.


Germany · Co-Lead · Michael [1:08:04]:

Thank you, African Union.

The floor goes now to what is on my screen, PSI, but what could also be 11.1 1.11. Sorry for that. PSI, can you please identify yourself?

Yeah, go ahead.


PSI · Dr. Yanon [1:08:31]:

Thank you, Chair. Thank you. Co chair. I'm Dr. Yanon from the International Organization of Public Services. It's a group of trade unions working in the public sector throughout the world.

For us, in terms of psi, we need to work upstream. The challenge does not lie in the lack of regulatory tools for dissettlement, but in the volume and complexity of the system itself. For decades, rules on pricing transfer rely on full competition, often on non existing markets. These structural faults lead to differing interpretations, friction and conflicts. For countries with limited administrative capacity, no mediation, no arbitration, no amicable disresettlement, we're successful in a system which is created to sow discord.

If we make it more complicated, then we won't resolve the issues, we won't resolve the root causes. Even the best dispute settlement mechanism is very active. When it's triggered, the financial loss already suffered, the administrative charge absorbed and the relationship between authorities is made more tense. A more effective means lies not just in strengthening capacities, however important that may be, but through a systemic reform or taxation of companies.

You will agree that when the rules are clearly established, it reduces ambiguity, the recourse to subjective comparisons, and thereby strongly diminishes litigation.

PSI recommends strengthening of cross border cooperation, but only if this is part of a system which is simpler and more predictable. Capacity building can also be useful, but only if it consolidates a coherent and fair framework rather than greater capacity to manage the unmanageable. Within this context, at PSI, we believe that works. Unit 3 should not dedicate considerable resources to the implementation of new dispute settlement mechanisms. The scope of the issue goes well beyond what this kind of procedural process would resolve.

We need to replace the system which generates disputes in the first place. This requires a transition towards rules which limit discretionary power, reduce the gap of interpretation and produce stable results in all jurisdictions. This is how we can reduce litigation, not just by perfecting our tools to fight against fires, but by rethinking the system itself to avoid the fire starting in the first place. For psi, transparency measures are essential for prevention of disputes. For increased transparency, we need to examine the publication of national reports, the implementation of a national registry of assets, the need to determine benefits, the automatic exchange

of information,

and we choose the path then to reduce litigation at source. Let's choose reform. Transparency. Transparency is not an accessory to justice. It is a foundational stone of it.

And prevention is how we can act the best. Thank you.


Germany · Co-Lead · Michael [1:12:26]:

Thank you. PSI ICC is next.


ICC [1:12:34]:

Thank you, Mr. Khalid. And thank you, Chair. Good morning everyone. On the first question on the, on the slide, we agree on the effectiveness of MAP as it was expressed by several, if not all, delegations yesterday. And we welcome reflections and consideration of how these can be improved and become even more effective active, leading to more certainty for taxpayers and tax administration alike.

We also believe that arbitration, as well as other alternative dispute resolution mechanisms such as mediation conciliation, should be considered as they are effective and efficient ways to solve disputes. But we also take note of the concerns that have been raised and I think it would be important to try to really MAP this concern and see how they can be addressed to make sure that these instruments can be effectively beneficial and considered effectively. I also would like to make sure that we also have an understanding of arbitration. Arbitration is a word that comes up in different legal fields. We have arbitration such in the context of Model Convention of the oecd, but also investment arbitration is different from that.

Arbitration from the model Convention is a way to to address situation where competent authorities cannot reach a map. Investment arbitration is a completely different animal. And then commercial arbitration is another one as well. So I think it would be important to understand in the context of tax arbitration, which are the concerns and in a constructive way. Also see how these concerns can be addressed by also looking at other areas.

So you might know that ICC is not only a business organization with permanent observer status, but but it's also home to the International Court of Arbitration. It's commercial arbitration. It's a different thing. But the topic of clarity, transparency, fairness in arbitration, commercial arbitration has also been addressed in the context of commercial arbitration. So maybe it would be interesting to look at how these concerns have been addressed in this other area of the law.

We have an ICC note on the conduct of arbitration under the ICC rules that specifically look at transparency in the selection of arbitrators and provide this information. We also have rules on publication of awards in a balanced way in order to strike the right balance that's due because the commercial arbitration you have, it's between businesses. And it is important that parties trust this system. So we work very hard on making sure that the system is trustworthy and it's fit for purpose. And so there are things that can be learned from there as well.

And we would be happy to share that experience. But I think it would be very useful to have a dialogue on which are the concerns, mapping those concerns and see if really we can learn from other areas. This also goes not just in arbitration, but also on commercial mediation conciliation we have experienced in that field. Again, not just in the tax sphere, but in other areas of the law such as trade and commercial law. And again, very happy to share that experience and see if we can effectively address those concerns and making sure everyone has trust in this dispute resolution mechanism.


Germany · Co-Lead · Michael [1:15:46]:

Thank you. Thank you, icc. We move on to the International Bureau of Fiscal Documentation.


IBFD [1:15:57]:

Thank you Chair for granting me the floor. And good morning everyone. With regards to the first question, yes, we welcome all efforts to reinforce mep, particularly for developing countries or countries with smaller treaty networks and for also inventories on MEP that are little that impact on experience. So we also encourage the exploration of possible features that would help with developing tools to enhance experience building, including creation of committees or practice where experience can be shared on things. And someone mentioned yesterday the development of rules or procedure.

So I, I feel these things would be able to help a lot of developing countries in gaining experience and capacity in mep. Then with regards to the optional mechanisms, yes, we do encourage exploring optional mechanisms that would enhance dispute resolution. And to this consideration should be taken to the concerns that have been expressed by a lot of members yesterday, especially concerning arbitration. And I feel mechanisms should be put in place to demonstrate demonstrate transparency and fairness in the process and also where necessary or where relevant, exploring modifications that could be made. The previous speaker also mentioned a lot that has been done with fairness and transparency under the icc.

I think that should be something that should be looked into and also other organizations on what has been success stories in this.

So generally, yes, we encourage all things that would give a wider range of options to countries on how to speedily and timely resolve problems. So thank you very much for the opportunity to share this and that should be all for me.


Germany · Co-Lead · Michael [1:18:29]:

Thank you.

Okay, thank you. We go to the next speaker, which is DMUM Foundation.


DMUN Foundation · FFD Children and Youth constituency (MGCY) · Miriam Nafula [1:19:01]:

Thank you so much. Chair, My name is Miriam Nafula from the DMUN foundation, speaking on behalf of the FFD Children and Youth constituency of the major group for children and youth Excellence. Distinguished delegates, the problem now under negotiation, particularly the tasks. Negotiation and its related issues operate on a timeline that is faster than the traditional pace of political cycles and break for children and youth. A negotiation holiday means critical time is lost for implementing the task negotiation and its practice.

Therefore, every delay in reaching a task agreement with or a peace accord to it is a day taken from the world we will inherit. Thus, the impact of inaction are happening now and they will disapprove steal our chance for a stable and prosperous adulthood. Excellencies, distinguished delegates. Our rights require an unstopped vigilance. For example, children and youth affected by war, exploitation or displacement.

A break in talks on tax means a danger to them. Our rights to education and health should not be subject to diplomats vacation schedules. Negotiations are the inching for aid distribution, securing vulnerable population and preventing violence. When the inching stops, the children who are already in the most desperate situation are the first to be left behind and forgotten. We demand that our voices are not only invited to be heard in a tokenistic way during large high profile negotiation and are excluded from the continuous detailed work done behind the scenes.

Our argument is that the issues are continuous. If the issues are continuous, our future will indeed be ruined. We, the young people, urge all of you today that let the agreement be implemented and established. Thank you so much, Chair. I'll take a minute to hand over to my colleague here.

I will be read in French. Thank you so much.


DMUN Foundation · Divine Ella [1:21:15]:

Thank you, Chair. So, my name is Divine Ella. I'm from Congo and I'm one of the DM UN representative. So I will be giving our closing remark in French. So Excellence, Excellencies, distinguished delegates, we highlight the importance of the work underway and now launch a call for continuation of collaboration and commitments towards a system which is fairer and more inclusive for all.

We highlight the importance of intensive discussions placing emphasis on shared progress. And we urge all negotiators to stay committed to the process aiming to achieve these Sustainable Development Goals as created in 2015 when all member states of the United nations adopted 2030 Agenda. We, the youth, recognized the work accomplished and its importance during this period. We have all laid out the essential foundations to create a new era of global tax cooperation which should be fair, inclusive and respond to the needs of the youth and other people who need it the most. Discussions should Achieve the implementation of a more robust and fair system and the equitable distribution of tax rights, taxation of digital services and new system for dispute settlements in order to achieve the SDGs.

This is a unique opportunity to reform global tax systems which are obsolete and dysfunctional. We need to show ambition and the urgency needed for this process to show clarity to achieve the progress that we want. Not just economic justice but also equity in order to ensure that the system functions for all and not just for a very few. We insist on the need for inclusivity. The goal has not yet achieved been achieved.

So we all need to prepare for difficult work ahead of us in order to fill any remaining gaps and create a system which serves everyone. The commitment for international tax cooperation which is inclusive and effective requires decision making structures which are legally established and transparent in order to ensure that all countries can be committed in a significant manner in the process. The youth insists upon the need for collaboration needs to ensure that negotiations are not just substantive but also decisive. In addition, the time has come to make choices. We can't just know what the right choices are.

We need to take them and take action without waiting further. Thank you.


Germany · Co-Lead · Michael [1:24:01]:

Thank you the MUN Foundation. We continue with the Bombay Chartered Accountant Society.


BCAS [1:24:10]:

Thank you Kohlit for this opportunity. We agree with meeting with the taxpayer suggested by Russia. We think it's a good suggestion to get full and correct facts which will help tax administration in resolving cross border disputes. We believe that time bound resolution of dispute is necessary and therefore protocol should provide for the same. We do not support provision of arbitration.

However, other mechanisms can be recommended on optional basis. We believe that disputes are best be resolved through bilateral negotiations. Sir, UN can play a positive role in capacity building adoption of a country in setting up and upgrading its dispute resolution mechanism. Thank you for this opportunity. And may I at your permission with permission, request my colleague to supplement the discussion.

Thank you. Co Chair. My comment is on. You know the last clause which is on the screen. The the involvement or role of UN is.

Is very interesting. Now the way I read this sentence it is referring to the operations of these resolution mechanisms and I believe these means the ones which are return in the preceding bullets which is MAP and arbitration. I'm not sure whether the committee has thought of creating a resolution panel of its own of this. You know of the member countries, the way it was proposed in pillar one there's a two tier mechanism of review panel and determination panel. The committee may want to consider this because if that happens, you know, then that would be a completely new sort of mechanism.

For resolving disputes. Thank you.


Germany · Co-Lead · Michael [1:26:08]:

Yeah, thank you. Bcis, for the sake of clarity, the in the question l these resolution mechanisms. Yeah. It refers to MAP to arbitration, but not only so it is also about mediation or conciliation as optional tools. I just want to flag that because every one of us will get the opportunity to also comment on those questions in writing following this session.

Thank you. We continue with the African Tax Administration Forum.


ATAF [1:26:53]:

Thank you. Khalid. Your Excellencies, good morning. We'd like first and foremost to start by aligning our comments with the comments that were made yesterday by Nigeria on behalf of the African group. Further comments made by each India, Russia and the comments made just this morning by African Union.

And to some of the specific comments, we want really to underscore the importance of ensuring that MAP remains the core mechanism of resolving cross border tax disputes and noting is wide adoption by many countries and experiences. Countries continue to build in this area and so want to emphasize that there are a couple of areas definitely under MAP mechanism that will need to be improved, including the timeliness and of course other issues around transparency that this protocol should ensure that are addressed and of course to ensure that MAP is more accessible by taxpayers and definitely effective. But I think there is one particular aspect of that which is very important particularly for development developing country and that countries and that is issues of capacity building. So as part of this work stream we want to underscore the relevance of ensuring that there is more capacity building around MAP procedures and of course sharing best practices for countries to effectively implement MAP like others have shared and of course very good experiences that have been articulated already. We are strongly opposed to the idea of having a arbitration in this protocol for many reasons that our countries have already shared issues around constitutional limitations, costs, transparency and of course the power cemetery that is associated with arbitration processes.

And also we've looked at some statistics and evidence out there in relation to the investor state dispute resolution where arbitration has been playing out. We have seen a shift where some of those old agreements now are moving away from arbitration to more of embracing domestic tax court systems and also state to state mechanism of dispute resolution. And therefore it will not be good for us to go to a system that is already being challenged for a range of reasons, including the awards that are significant, affecting obviously the economics of very many countries. And for those reasons, therefore we are opposed to the idea of arbitration in this protocol. Having said that, I think we also welcome the idea of exploring other mechanism, perhaps mediation.

But those needs to be developed very well and of course ensure that those remain Optional. As the last question on the role of the un, we can can see a significant role there, including establishing some panels that will be used for resolving the disputes and also coordinating the activities around dispute resolution within the framework of the MAP procedure or any other alternative procedure that we're going to agree on. As a matter of fact, it's important those panels remain highly representative so that all regions and countries as much as possible are fairly represented to ensure inclusivity. Thank you.


Germany · Co-Lead · Michael [1:30:26]:

Thank you adef. We have two more stakeholders we want to take want to give the opportunity to take the floor. After that we move on with our agenda. It is South center followed by CFS.


South Centre [1:30:49]:

Thank you Chair for the opportunity. SouthCenter supports the proposal to improve maps and make them more effective and accessible to countries. And we also are opposed to arbitration as we had earlier mentioned and also mentioned by a number of countries on the concerns about maps. Experience shows that they are costly, dominated by a few jurisdictions and may undermine national sovereignty. Hence it should be left out of the protocol.

Then on mediation and conciliation. They are largely untried and untested tools in resolving tax disputes across borders, so their efficacy still remains unknown. So introducing them at this stage may create uncertainties and we propose that they should be left out of the Protocol. At this point, the UN can establish a forum to manage administration administration of this Protocol so it can play the role of capacity building coordinate cooperation among countries, including maintaining data on issues like MAP statistics. So we support a forum for the UN to support this.

Thank you.


Germany · Co-Lead · Michael [1:32:15]:

Thank you South Dentar cfs, please.


CFS [1:32:21]:

Thank you for giving me the floor. I also take this opportunity to thank the Member States and stakeholders for their reasoned views that will Help Shape Protocol 2. I think the bottom line for us is that Member States must ensure that this particular Protocol delivers fair, predictable and accessible mechanisms that safeguard our tax bases. Particularly for African states and LDCs who have historically borne the costs of international tax cooperation without commensurate benefits. The Framework Convention must first establish genuinely reciprocal foundational obligations, capacity supported cooperation frameworks and protective resolution mechanisms for Protocol 2 rather to be useful.

So critically, we've been hearing Member States yesterday and stakeholders today reject arbitration now. Good faith negotiations then demand that those states favoring arbitration consider modifying their positions. Arbitration has indeed held fought for a considerable time costing State millions of dollars that could have financed local development needs while consistently producing outcomes that curtail source country taxing rights. We've got enough data to look at the legal costs that majority of the developing nations have incurred as a result of the arbitration process and we'll be happily submitting this on the 5th of December for your committee's consideration, particularly the core leads to this protocol. So Protocol two.

Therefore it presents an unprecedented opportunity to refuse participation in regimes where capital importing States States subsidize adjudication mechanisms that have historically privileged capital exporting jurisdictions interpretation of tax treaty provisions. We would then insist that dispute resolution options under Protocol 2 do not replicate investor state arbitrations structural biases and that any resolution mechanism includes GLAD Global south arbitrators, mediators, conciliators as well as well as negotiators who apply interpretive principles that favor source taxation and convene under a UN body. Thank you Chair.


Germany · Co-Lead · Michael [1:34:49]:

Thank you cfs.

So we shift our focus to the next topic which is access to information transfer pricing databases in particular.

Thank you. That is the slide. That is our focus now. And on this slide there's a small mistake I made and for which I want to apologize. The slide suggest that the subject of access is or the issue of access to information is limited to tax dispute resolution only in the concept note it is reflected more correctly that according to the scoping phase that we have undertaken in the summer, information asymmetries are an issue and a major obstacle in both the prevention as well as the resolution of tax disputes cross border tax disputes.

So please don't let yourself get a strain from the question here, but consider instead also the preventive dimension of things. With the view to the current state, challenges related to cost, coverage data quality were highlighted. Therefore, we have heard a broad support for improving access to TP databases and a number of ideas were mentioned including public UN transfer pricing database and also the option of pooled purchasing where countries could negotiate joint access to commercial databases. Also on that several delegations raised some concerns regarding governance regarding feasibility as well as cost. The approach for the time being suggested by the CO leads is to continue exploring the most efficient ways to improve access to TP databases.

We as a Committee are now invited to discuss the question you are seeing on the screen. First, whether Member States could share perspectives on the possible governance arrangements of a potential UN managed database, including questions of financial implications, management responsibilities, participation of Member States and safeguards for data confidential and and integrity and secondly whether other types of databases could be considered such as databases compiling bilateral APAs or MAP cases.

The floor is open.

United arab emirates, please.


United Arab Emirates [1:38:17]:

Thank you. Kholid, Just on point M. We are supportive of any sort of initiative which will provide equitable and just generally access to comparability Data for all member states just on n. Regarding the database, we want to understand further from anyone on the floor in terms of the envisaged benefits of a database. I could see especially for bilateral APAs, how it could be a self fulfilling prophecy in terms of. If people see more bilateral APAs being concluded, then it may encourage them to adopt a bilateral APA program of their own. But I think just one thing to be aware of is that in terms of APAs and maps, transfer pricing outcomes that are agreed are should not set a precedent for others because those outcomes are based on a particular set of facts and circumstances.

So we just wanted to understand further from the floor what would be the sort of envisaged benefits of having a database and what, what kind of detail would be available in there. Giving. Giving due importance to taxpayer confidentiality as well. Thank

you.


Germany · Co-Lead · Michael [1:39:50]:

Thank you, United Arab Emirates. Indeed. So I can deflect that question and it goes to the floor as to whether and as to how databases populated with APA or MAP cases could be a suitable approach. Maybe in that regard. It is also worth mentioning that in the concept note it is noted that over time other measures under the protocol, like for example APA or MAP and wider use of those instruments could also contribute to reducing information asymmetries more broad broadly.

Meaning that maybe even without populating a database with such APA map outcomes, Member states would gain more information and by that mitigate the information asymmetry that is perceived so far. So the floor remains open. I have Italy now asking for the floor.


Italy [1:41:02]:

Thank you, Khalid. Good morning everybody. Just to reflect upon the fact that building a database is very expensive. So again we should build on what is existing.

And as UAA said, perhaps here we have to work more and concentrate on the safeguard that we can have the right confidentiality, the protection of data, which is important for many domestic system. And it is again a cross cutting issue for some of the commitment. And here again is very, very important, we think. Thank you.


Germany · Co-Lead · Michael [1:41:41]:

Thank you, Italy. We continue with Niger.


Nigeria [1:41:55]:

All right, thanks Chair. I didn't know I was that hop on the list, so my apologies. Good morning colleagues and thanks for the opportunity to share our thoughts on this question. I speak on behalf of Nigeria

in respect of the question M and N. We are of the view that having the relevant.

Structure to manage each of the programs, processes that will emanate from the framework and its protocols, in my view should be

a concern at this stage.

And then the mandate for each of the subsidiary bodies that will be created under the framework, in my view should be where we begin to discuss what exactly each of the subsidiary bodies will do. In my view, discussing this topic under protocol number two

may crystallize, create gaps or overlaps. I suppose discussion as to governing bodies and their mandates should be discussed under the Framework itself.

And then it will be a lot, in my understanding, more straightforward to look at each body that is created, what functions they will perform. And we could then allow them to choose the methodology or the tools that are available to them or they deem more appropriate for their mandate. If we begin to prescribe types of databases and all of that, then we, we may in one way or the other be putting such bodies, when created, when or if created, into a straight jacket that they are not able to function based on prevailing circumstances.

And so Chair and co lead, my suggestion will be that the question M and N shouldn't come on under this protocol should be issues discussed under the Framework itself. When we're talking about the various bodies, governing bodies that will operate both the Framework itself and the relevant work streams or protocols that will emanate from the Framework. I submit. Thank you.


Germany · Co-Lead · Michael [1:45:14]:

Thank you, Nigeria. I believe that the distinguished delegate from Nigeria made a good point that we have to be mindful that we're talking here about something that eventually is going to be addressed primarily by the Framework Convention. However, at the same time we are not there yet in prescribing anything. So the approach, or the proposed approach is exploring ways forward. And I can imagine that this is a point that is suitable for the close coordination that that we are having with Workstream one anyhow.

And it is probably like a feedback loop. Our input feeds the discussions on the Framework Convention and vice versa. Yeah, but it is true that we have to remain mindful of that. Want to add anything to that? No, just adding that I agree with that.


Chair · Khalid [1:46:09]:

And I think exploring the idea is this is the right place in which we explore it as a way for prevention, where it will be addressed or where it should come. Yes, maybe. Right. It's not under the Protocol may go to the Framework Convention. But just saying like I think this is the right place to talk about it more than to be discussed as idea for prevention under the Framework Convention.

Once we reach like a conclusion about it, then we can coordinate with the Convention how this can be presented under the Convention under the relevant mechanism. Thank you. Thank you, Mr. Chair. Norway, please.


Norway [1:46:50]:

Thank you. Mr. Kholid. I'm mindful of the intervention Nigeria made just now. So I think I will just speak to the, to the question questions themselves and not take Any position on whether they should be discussed in this protocol or in relation to the Framework Convention itself. We think there is merit in exploring whether or not there is kind of a cost benefit to have a UN database on comparable.

This issue of lack of comparables is a recurring issue, in particular in relation to developing countries. And we think it would be a very important progress if we could improve the access to data. Now, having said that, of course, the access to data is only as good as the reporting requirements in each Member state. So in exploring this, we might be taking that into account and making that also part of any evaluation of whether or not the UN is a better home for such a database or if the commercial databases are still the best home. I think, like Italy said, it's important in any case to maintain sufficient data and confidentiality requirements.

Of course, establishing and keeping such a database updated is a very big task, and that is why it is a commercial


Chair · Khalid [1:48:43]:

issue. So I think exploring this would be a very good idea and we would be supportive of that. When it comes to data, other databases, and specifically the issue of compiling bilateral APIs and MAP cases, we could explore that too. But it's important to keep in mind what these actual agreements often look like. Often it's just a very short paper outlining very high level information and a very short conclusion.


Norway [1:49:26]:

So I think it's relevant also to consider what kind of use Member States would have of such database. Sometimes it could be good to know that a taxpayer has such an agreement in place, but in this particular space, confidentiality is particularly important. So I think that it's worth exploring these issues further, but on the basis that the committee also agrees. Thank you.


Germany · Co-Lead · Michael [1:50:15]:

Thank you, norway. Next is france.


France [1:50:22]:

Thank you so much, sir.

I'm going to speak French now. Regarding the first question, you had indicated that the setting up of a database is something that is indispensable when it comes to breathing life into this protocol. It's a fairly effective way to prevent this disputes.

It seems to me that the setting up of databases is something that is intimately linked with the bolstering of administrative capacities to ensure that there is genuine information sharing. However, it seems indispensable to me to point out that databases and other instruments already exist. And as we said earlier, we have to ensure that there is no duplication with existing instruments within the framework of this protocol. What would be interesting would be to identify instruments, databases which already exist, of course, to identify problems being encountered by States when they use these databases and within the framework of this protocol, improve them. Improve them and achieve our objective, which is that of efficiency, effectiveness and to make things easier for the taxpayer.

Finally, we could perhaps consider, because we're all aware of the cost to access these databases, perhaps the UN could purchase licenses to access these mechanisms. More specifically on little N and the idea of setting up databases on bilateral agreements, we're not in favor of this for two reasons, and this also refers to mutually agreed procedures. The reason is that these bilateral agreements are the result of situations which are quite specific in every case. And it's very difficult in our view for states to use procedures, for one example, applicable to one example in another case, which might not be exactly identical. And as Norway said, there is the issue of updating these databases, which would involve regular monitoring to ensure that we don't end up moving away from our objective with bilateral agreements which will find themselves simply inapplicable to situations just a few years down the road.

And last thing, it seemed to me important to mention this. If there was a development of these databases, data will of course have to be protected. So the issue of confidentiality and integrity, especially the confidentiality of the taxpayer. Thank you.


Germany · Co-Lead · Michael [1:53:56]:

Thank you, France, Portugal, please.


Portugal [1:54:00]:

Yes, thank you. And it is the first time I'll take the floor. I want to thank Kenya for the warm welcome and also thank the Secretariat and the colleagues Marlene and Michael for the work they put during the work stream. And now with the presentations facilitating the discussion.

I also want to start by echoing what Norway and France said, but particularly on point M. We think it is important to address this subject as a way to capacity building for tax administrations to through access to transfer pricing databases. And as a side note, that can also open the door for many tax administrations that don't have the governments don't have put in place a transfer pricing legislation and maybe this is the incentive they need to start thinking about it. In letter M we talk about UN managed database, but also on the collids concept note, we talk about another alternative proposal, pooled purchasing and we think that will be most advantage. Why? Because we could negotiate in group that would give us leverage and we'd have a reduction of the subscription costs for all parties involved.

And even on the protocol as we're speaking, it will be more efficient and we have time constraints and this would allow to solve the issue in a favorable way. Unlike the UN managed database that as we all refer dear, it raises complex questions of financial implications, management responsibilities and this is what we have to say about it. Thank you.


Germany · Co-Lead · Michael [1:56:21]:

Thank you, Portugal. We continue with Singapore.


Singapore [1:56:27]:

Thank you, colleague. On question M. We agree that access to transfer pricing databases is an area that Member States can continue exploring to facilitate transfer pricing analysis and therefore increase the effectiveness of dispute resolution and prevention. Now, obviously this would have to be done in a demand led, cost effective

manner with proper safeguards to preserve taxpayer data confidentiality and integrity. On M we would agree with previous speakers, including France, as the transfer pricing outcome of each MAP or APA case

depends on specific facts and circumstances and may not be generally applicable with such a database might not be useful across for all Member States. And another issue which has been raised previously is of course that of taxpayer confidentiality. So given the above, we think a cost and benefit analysis may be necessary to ascertain whether further work on such

a database should be pursued. And for now our sense is that it is probably not necessary. Thank you.


Germany · Co-Lead · Michael [1:57:53]:

Thank you. Singapore, Russian Federation.


Russian Federation [1:58:02]:

Thank you. Thank you so much. Koleed, I'm going to speak Russian now. I would like to start by apologizing for a fairly lengthy statement, but I won't take the floor after that. Now, regarding Little M we back the idea of the creation of databases in terms of transfer pricing.

1 Under the aegis of the UN, our position on the following questions is the financial consequences. Now expenditures might be necessary to create a database of enterprises axis and the creation of IT platforms with access to tax administration authorities around the world. To finance this, we could look at a fair sharing of contributions between Member States with perhaps certain advantages for developing states. Another alternative source of financing could be voluntary contributions or contributions from enterprises to ensure that IT is sustainable. It has to be built up in stages.

We can start a pilot project in separate regions or sectors to identify shortcomings and then we could fine tune it. It is important to provide for long term financing to update the databases. Otherwise there is a risk that the data might soon find itself outdated.

An alternative here would be the purchase commercial databases.

If the creation of a full fledged UN database would take too long, would be too expensive, we could concentrate on the pooled purchase of commercial databases. Turning now to the issue of the management of these databases and the allocation of responsibilities. The operation should be taken up by a specialized UN body in cooperation with enterprises. IT would cover the collection of data, quality monitoring the IT systems and so forth. The management should possess the necessary expert expertise and IT expertise to ensure that access is easy and convenient.

There will have to be a set of criteria for access to the database, including validation of access.

Turning now to the participation of Member States, we have to note that States have a dual role here. They might be the ones who provide the data, but also users of this data. Theoretically speaking, countries could provide anonymized data within their jurisdictions, for example Aggregated databases. To enrich the databases, especially on the various regions and spheres of activity which are not covered by commercial databases, we should focus on the data which we already have. State data that we already have.

We should clearly determine what the right of access is. We believe that all parties should have equal access when it comes to the administration of tax disputes and tax processes. States should also participate in key decisions regarding the use of databases, such as, for example such as, for example, the expansion of their scope and we could move from the transfer of pricing databases to greater databases. We also consider it useful to conduct regular surveys and to have a feedback system to ensure that we are aware of any problems that arise from the use of these databases. If the databases are funded with state funds, then the member States have a right to enjoy reports, annual reports regarding the use of these databases.

For example, if it reads to increased revenue concerning confidentiality and data confidentiality and integrity. The level of confidentiality will to a large extent depend on the sensitivity of the data in the database. If these are public data or commercially available data, this should be in keeping with existing procedures. In those cases where information is more sensitive in nature, for example because it is provided by the state, then there has to be a fine tuned access procedure when it comes to the use of such data, similar to existing standards in the field of data information sharing.

Now I'd like to move on to question N Little N. Now, in our view, a database which would aggregate information regarding APAs and data confidentiality and integrity procedures could be useful. APAs and maps. It could include sectors including types of operations that have been agreed on, for example which types of transfer pricing mechanisms have agreed upon, and also critical shortcomings.

Such an exchange of information could assist tax administrations in cooperating. Of course, a database must provide for anonymity of the data and disaggregated data. There could be a short case summary which would describe a situation and the resolution without informing anyone of the identity of the taxpayer. Furthermore, the function of such a database could also include monitoring existing and finalized cases. There could also be typology regarding disputes which arise within the framework of mutually agreed procedures.

For example, we have already seen how many disputes have arosen regarding transfer pricing and tax residency and so forth, how many cases have been resolved as part of these procedures and so forth.

So the OECD is already compiling such data and publishes it on an annual basis. This is available to its member states and a number of other states, but a database under the Agency of the United nations could lend additional quality to existing data. For example, as already said, we could share disaggregate a summary of cases that have been concluded and we could also look at systemic patterns of problems. If we focus also if it's focused on a specific article of the convention, then this is probably an indication that we need to fine tune those articles. We would also recommend a staggered approach, starting with a pilot project.

For example, we could look at natural resources and so forth, and then we could expand it to other sectors. Thank you so much.


Germany · Co-Lead · Michael [2:05:01]:

Thank you, Russia. On the question, Ann, I'm taking aback a little bit. I hear concerns that the data may not be meaningful or not like generally meaningful, or that it may not be broadly transferable to individual cases or might be short lived in terms of lifespan. I'm taking aback a little bit because as the Russian delegate just highlighted to some extent, we are already familiar with exchange of information to this very end.

So there's a question or the core question is whether we can do something to improve the current situation. And there's a saying a bird in the hand is worth two in the bush. So in Germany we would translate it a little bit differently, but the meaning is that maybe it is necessary for us to also strive for smaller improvements which may still be valuable instead of chasing something too ambitious that we cannot reach eventually. With that, I want to give the floor now to China.


China [2:06:18]:

Thank you, Kuri. First, I would like to say that we share most of the comments made earlier by the delegates from Singapore and Norway. And for the question, the first one, we also think that maybe the lack of comparables is one of the greatest change we always facing upon the prevention and the resolution of tax disputes, especially upon the transfer pricing issues. Right.

And

we just think that if we try to build a new, totally new database, maybe to put it as it stated in, in the draft, right, as a potential UN managed database, it is still very challenging, I think, in terms of not only the source and quality of data, but also cost, governance, confidentiality, et cetera. And in this regard we also think that it may be much more practical and effective for the member states in need to consider the alternative proposals in the concept note, like the purchasing or coordinated arrangements upon existing databases. That should be much more practical, I think. And for the second, for the question N, we also think that for the citoed APA and MAP cases, bilateral APA and MAP cases, we need to see that Every case is settled on case by case basis, right?

And every case has this specific background and it may be, may not be applicable to other cases directly. And that's our concern. And the other concern about the question is that usually in the agreement of MAP and APA, bilateral or multilateral APAs, we will confirm that by the both tax authorities we cannot disclose any kind of any information about the APA or MAP without the consent of the other party or the taxpayers. That should be also challenging point for us to explore this. That's our opinion.

Thank you. Thank you China. The floor goes now to India.


India [2:08:51]:

Thank you, Kohli. We welcome the inc's effort to reduce the information asymmetries and transfer pricing. However, these must be explored carefully and transparently because here we are trying to build a UN database where the goal should not not be to impose a single database, but to broaden the access and reduce disparities supporting all Member States in applying the transfer pricing rules effectively. On the point on the type of databases that could be considered like a bilateral APA and MAP cases, there is a concern that the many jurisdictions, including India, operate under strict domestic domestic firewalls governing the confidentiality of APA and MAP proceedings which actually legally prohibit the disclosure of transfer taxpayer specific information to any external or multilateral database. So any system envisaged by the Committee must therefore respect these statutory constraints and avoid requiring the sharing of protected APA and MAP data.

Thank you.


Germany · Co-Lead · Michael [2:10:04]:

Thank you India. So we have no more Member States asking for the floor. And with that I give the floor to Zambia who just raised 10. Zambia, please. Thank you so much, Walid.


Zambia [2:10:22]:

So we also equally support efforts to come up with a database that will be accessible because obviously improving access to transfer pricing information will help to reduce the asymmetries and obviously also contribute towards the prevention and resolution of tax disputes. We also take note of, I think, the proposed approaches that can be taken. Of course, we note that one of them is obviously creation of a public UN transfer pricing database accessible to all countries. But in this regard we also take cognizance of the comment that came from Norway. Perhaps in view of the fact that, you know, these databases require constant updates.

So then perhaps the cost associated with all those activities perhaps might also be considered. And obviously with that having been taken into account, a pooled purchasing of a database might appear to be a more cost effective approach notwithstanding and without prejudice to this position. Chair, I think our main concern is that we believe that even by providing this access to the TP database, we won't really be dealing with some of the issues that have been, I think, raised with regards to the databases. And this has to do with the availability of data. I think all the databases available, the major concern that has been coming up relates to the limited data that is available on those databases.

Particularly speaking on behalf of Africa, data relating to the circumstances that at least applied to our African scenario. African environment is very limited. We have very limited comparables countries coming from Africa. And as a result of that, even in our application of transfer pricing principles during our benchmarks, certain times, in fact, often the databases seem not to be very helpful. And based on that, we believe that forecast must also be, I think, dedicated towards enhancing transparency, ensuring that data is available within jurisdictions.

You will agree with me, Chair, that most of these databases contain information coming from the north because those jurisdictions have made a deliberate effort to make that information available. But that is not the case, I think, think particularly in Africa, where that information is not available and as a result cannot be found on these databases. And because of the confidentiality issues, to the extent that that information is not publicly available, there is no way that this information can actually be found on those databases. So perhaps that's one of the issues that we should also consider to go hand in hand with a proposal to provide access to the public databases, you know, enhancing transparency within jurisdictions to ensure that information about these companies is made publicly available so that it can be accessed by these databases and as such can also be used for transfer pricing analysis. In terms of point N, we agree with the position from Russia to the effect that indeed it would be very useful to have information about the bilateral APAs or MAP cases so that other jurisdictions can also benefit from the outcomes of these measures as applied by other jurisdictions.

Thank you, Chair.


Germany · Co-Lead · Michael [2:14:46]:

Thank you. Zimbabwe. I seem to have triggered something with my threat to close the floor. I keep that in mind for later. We continue with Algeria, followed by Kenya and Uganda.

Algeria, please.


Algeria [2:15:03]:

Thank you, Chair.

We support what's been said in the room and commend all the efforts made in the context of the work streams for the Framework Convention and Second Protocol on issues of asymmetry in terms of accessing information. Indeed, accessing databases is an essential issue and in particular for developing countries who don't know necessarily have access to these due to exorbitant costs, also due to issues of coverage in certain regions.

For example, this was noted by our Zambian colleague. So indeed, the creation of a database within the UN would be very interesting and we would be very in favour of it, whatever the approach decided upon. Whether that's within the UN or making use of existing mechanisms. Whatever the approach chosen, within the context of this work, we have to take into account the support required for developing countries. These countries often have difficulties in accessing data, in particular when it comes to costs, but also in relation to the availability of coverage and the availability of information.

On the issue of whether we could integrate data on apas or map, we think this data would be very interesting to include. Why? Because it would allow states to facilitate an analysis of the data and APAs.

It would enable decision making on taxation amounts and also enable us to settle disputes. These databases could also enable us to highlight issues which are recurring and through these recurring issues we could then identify guidelines or capacity building which could be implemented in order to work on those recurring issues and resolve them. So for all these reasons, we believe that strengthening access to databases is a very important issue and this will guarantee the effectiveness of international tax cooperation. Thank you.


Germany · Co-Lead · Michael [2:17:38]:

Thank you. Next is kenyapo. Kenya, please.


Kenya [2:17:45]:

Good morning Chair Khalid Secretariat I think we've heeded to your threats and we have to put across a few comments.

First, I would like to recognize the importance of databases that databases, especially when you're dealing with cross border transactions, it is important that you have at least comparables to that effect.

My thinking the main reason why

would have potentially the UN managed databases is to try and elevate the sacrosanct effect of the UN as a body in terms of handling the database. We are coming from a point and I think quite a number of member states have mentioned, we are coming from a point where the databases that exist

are a bit skewed, albeit not deliberate, but because of maybe the reporting frameworks that exist. So you find quite a number of commercial databases are heavily skewed towards a particular region. So to actually get comparables that can enable you effectuate a proper comparability analysis, for example, becomes a bit difficult.

So one of the things is

if we are to have a UN managed database, then we need to have a database that looks at the circumstances, the conditions that suit an array or a myriad of transactions and entities.

Then on the other thing

that I would also wish to mention would be on access to these particular databases for quite a number of developing countries. And I think that's the reason why we put the issue of financial implication, as we had discussed earlier, is accessing these databases is quite a big challenge. And, and so that should be put into perspective when we are trying to see where this particular discussion will be housed, especially within the framework and not addressed in one particular protocol. And then there is also the issue of safeguards for data confidentiality and integrity.

And that's the reason why we believe that if it's housed under the un, then the database would have the integrity that is imagined.

Then when we look at.

Letter N, you realize that we are having two issues, that we have bilateral APAs and we have MAP cases. From a domestic perspective, if you look at how bilateral APAs are drafted, there are quite a number of things that speak to privity of contract and privacy of contracts.

One main issue, if you look at our domestic law and what you're trying to put across is the critical assumptions that you come up with when you're drafting or you're coming up with the bilateral aps. So I would imagine if we are speaking to having databases that constitute bilateral APAs, What effect would that have in the critical assumptions that have been put in place within those specific bilateral APAs, I.e. 1, 2, if you again, look at how we've crafted our domestic law, such kind of APAs are not to be used by any other taxpayer, for that matter, and the Commissioner. So the question of confidentiality comes in to an effect that you cannot use the bilateral APAs elsewhere apart from either question of reporting numbers, how many APAs have been done within a particular period. So from our end might be difficult to have compilation of bilateral APAs as a database map so that the same can be used by others for purposes of comparability.

Thank you, Chair, I submit.


Germany · Co-Lead · Michael [2:24:01]:

Thank you, Kenya, for your intervention. The floor goes now to Uganda.


Uganda [2:24:09]:

Thank you, Khaleed, for the opportunity to speak on these two issues.

We largely concur with the submissions of Russia, Zambia and Kenya on the question of the UN managed database. We think that it's a good idea and more specifically, it will be good that the structure in place to manage this database works with states, member states, including the regional economic groupings, to leverage their data collection and management infrastructure.

Second, on N, we think that it probably would be a good idea to include court, court decisions in the databases which are compiled because this helps to enable some of our jurisdictions to leverage some of those principles established in those decisions. Now, on the question of confidentiality of bilateral APAs and MAP cases, there was a suggestion from Russia on anonymity of the disclosures in those cases. It would be good to hear from the room whether that would address the.

The concerns on confidentiality in each of those cases. I submit, Chair.


Germany · Co-Lead · Michael [2:26:30]:

Thank you, Uganda. Our next speaker is from Bangladesh.


Bangladesh [2:26:36]:

Thank you. Thank you, Khalid. We think to MITIGATE tax disputes, essential databases most important and that would be even managed database. It is very good to hear.

We think tax transparency is as well as necessary for every country. We think it ensure all countries have access to beneficial ownership information to detect and prevent tax evasion, corruption, money laundering and illicit inducement.

We think central beneficial ownership registers publicly accessible or accessible to competent authorities.

At. Lastly, we tell that we can accommodate confidentiality safeguards but not restriction that block lawful access to information. Thank you.


Germany · Co-Lead · Michael [2:27:59]:

Thank you Bangladesh. The floor goes now to the Islamic Republic of Iran.


Iran (Islamic Republic of) [2:28:07]:

Thank you, Kali. The Islamic Republic of Iran supports international efforts aimed at reducing information asymmetries and strengthening capacity building. However, Iran cannot endorse any UN managed database that require the sharing of API map data or confidential taxpayer taxpayer payer information. Confidentiality, national sovereignty and the specific needs and constraints of developing countries must remain central consideration in this discussion. Thank you.


Germany · Co-Lead · Michael [2:28:49]:

Thank you Iran.

Next is.


Sierra Leone [2:28:57]:

Thank you. Yeah, thank you. Chair. I first of all want to say I support the statements made by Nigeria on this particular issue.

Hello. Yeah, you are back. Okay. Thank you, Chair. Thank you.

But on a toiling version for discussion on these issues, we definitely want to register Sia Leun's perspective on the two issues.

Of course, this reflects our position as a developing country with capacity constraints, limited digital infrastructures and strong interest in transparency, fairness and revenue protection framework.

Sierra Leone's perspective on governance arrangements for a united potential United Nations Managed Database. Sialung welcomed the establishment of UN Managed database, especially one supporting transparency, comparability of tax rules and improved administration. But would also like to emphasize several governance, financial and confidentiality conditions. Now, governance on the governance structure, SILO supports a governance framework framework that is inclusive and member driven. Governance must ensure equal participation of developing countries, not only major economies.

A steering committee or governance board with balanced representation from regional groups such as Africa, Asia and Pacific, Latin America, etc. Is also essential. Decision on database code, data categories and updates should be taken by Member States, not solely by technocrats or donors. Now on transparency and rule based SIILUN would stress clear operational guidelines, defined procedures for data submission, verification, use and access and review mechanisms for changes to the database. This ensure predictability for smaller administrative and the financial implications given limited fiscal space.

Cilun argued that development and maintenance should be donor supported. Initial funding should come from voluntary contributions, development partners and multilateral institutions. Example undp. A dedicated funding window for capacity building should accompany the database and to avoid mandatory contributions for low income countries. Silun opposed any requirement for low income states to finance the database.

Optional contributions should be allowed but not expected on the management of responsibilities SIER Leone supports management under the UN Secretariat Example Financing for Sustainable Development Office with technical operation delegated to a specialized tax data unit Clear reporting obligations to Member States Annual audit and performance review capacity support for developing country tax authority should also be integrated on participation of Member States CILN supports open participation with tiered Access public sections vs. Confidential sections example detailed tax rulings and policy drafts Support for developing countries to gather and upload data Periodic consultation workshop to ensure the platform remains relevant on safeguards for confidentiality and data integrity Given the sensitivity of taxpayer information, SI alone emphasizes strong confidentiality protocols Protocols adherence to global data protection standards Proper anonymization of taxpayer information Explicit prohibition on sharing commercially sensitive or taxpayer identifiable data Cybersecurity measures SILO expects inscriptions data strict access controls Audit trails for all data retrieval on the legal agreement Clear data sharing agreements defining rights, obligations and liabilities for breaches Our overall position is that we are supportive but require strict confidentiality safeguards equitable governance, donor finance capacity support and protection of small countries interests on the end question for discussion on the floor. We generally support exploring additional database type but with limitations. Database on Bilateral advanced pricing agreements Potential benefits that Sierra Leone sees is that this could assist countries with limited experience in APA negotiation. It will also provide access to comparative data helping Sierra Leone align transfer pricing practices with global norms.

It would also strengthen transparency around cross border pricing and reduce profit shifting rates. What is the Sierra Leone concern on this? APAs often contain highly confidential taxpayer information. Sierra Leone insists on full anonymization only high level summaries, example second sectors or methodologies, types of transactions, no disclosure of specific margins or company identities. Though Sierra Leone supports a summary level APA database, not one containing detailed or sensitive arrangements on database on mutual agreement procedures.

A potential benefit that Sierra Leone is looking to is that APA I mean a map database could help SILION benchmark its treaty interpretation practices. It could also improve dispute resolution capacity and it could identify recurring treaty abuse patterns. What is Sierra Leone concern? Map cases often involve sensitive treaty positions. Disclosure of negotiation strategies may weaken a developing country's bargaining power.

SILION preferred approach SILEN supports aggregate statistics, example numbers of cases, issues involved resolution time, anonymized summaries of common issues and guidance notes showing best practices. Sierra Leone is opposed to disclosure of specific negotiation positions, information that could influence pending or future map negotiations. Other possible databases here alone might support TT metadata defining of permanent establishments, withholding tax rates, tax incentives and exemptions to strengthen reforms. Discussions domestic transfer Pricing legislation and administrative practices, commodity pricing benchmark are important for natural resource taxation. This benefits low capacity countries without compromising confidentiality.

Thank you Chair.


Germany · Co-Lead · Michael [2:36:29]:

Thank you Sierra Leone, Morocco Please. Thank you Khalid. We recognize the critical importance of addressing information asymmetries through improved access to databases. However, we emphasize that any UN managed database must be carefully designed to be sustainable, effective and accessible. We should consider on financial implication the cost to consider initial database development and population, ongoing data collection and updates, quality control and verification.


Morocco [2:37:06]:

On management responsibilities, we think that a technical advisory committee should be done. On data contribution, maybe a voluntary submission of comparable data is to be considered. And on governance, should we have a member state of a site committee with regular reports on database performance and approval of major changes as highlighted by many countries. We need to have confidentiality measures. Strict anonymization of company data is essential.

Access controls and user identification and confidentiality agreements for users. Thank you so much.


Germany · Co-Lead · Michael [2:38:02]:

Thank you Morocco.

Our next member state and I would also I guess our last member state taking the floor is Algeria.


Algeria [2:38:17]:

Thank you so much sir. I just wanted to speak to complement what I said earlier on. It's absolutely true that we did not present our position regarding confidentiality. So it is very important important to ensure that the compilation and access to data is carried out in a way which respects the requirements in terms of confidentiality. So one has to identify what information can be shared for example as what was proposed by the Russian Federation.

Thank you so much sir. Thank you.


Khalid [2:38:54]:

I give now opportunity to the stakeholders to to contribute to our discussion and we begin with bcas.


BCAS [2:39:05]:

Thank you Khalid for the opportunity. In our opinion the idea of UN managed database can be explored. However, strict data security and confidentiality should be ensured for sensitive information pertaining to taxpayers. It may be a good idea to obtain taxpayers approval before sharing their details. Databases for the bilateral APA and MAP should maintain full confidentiality without taxpayers details and respecting countries domestic laws on sharing of such information.

Such database could contain only principles or the core issues without revealing business secrets. On a positive note, such broad databases can guide taxpayers or countries about the prospects of resolving their tax disputes as well as country specific stance on a particular issue. Also they may act like a guide without laying out any formal precedence. Countries can also consider on bilateral agreement for acceptable margins for the related party transaction in specific industries to reduce transfer pricing related disputes. Thank you very much for the opportunity.


Germany · Co-Lead · Michael [2:40:27]:

Thank you BCIS next is Third World Network.


Third World Network · Third World Network; Tax and Fiscal Justice Asia; Global Alliance for Tax Justice [2:40:35]:

Thank you Kohlid. I speak on behalf of Third World Network, Tax and Fiscal Justice Asia and the Global alliance for Tax justice on the question of transfer pricing database, we find this approach problematic as it continues to be a solution that is based on the use of transfer pricing, including comparable profit method and comparable uncontrolled price method. MNCs and their related entities use tax planning techniques to attain tax optimization, typically effective tax rates of not more than 1%, far less than what ordinary workers pay. Many tax planning techniques are turbocharged by transfer pricing methods, which the tax authorities have to deal with through ever changing measures, which are even made more complicated by rapid technological developments. Transfer pricing incentivizes the use of intangible property migration, wherefore no apparent business purpose.

The ip, which is increasingly important in a digitalized economy, is migrated to a tax haven, so royalties could be paid for relatively little or no tax at all. Also, talking about comparables, we ask what is the proper valuation of the intangible property at the time of transfer? How much the transferor or the parent corporation charge to the transferee? What is the basis for the pricing of the royalties when the transferee allows a third party to use the ip? This becomes even more complicated in cases where the third party turns out to be yet again another related entity.

Given the flux in technology, services and business models in an increasingly digitalized economy, we cannot simply rely on a TP database. Developing countries may not have them even as they are at different stages of economic development and technological endowment. Furthermore, they say that data is the new oil. How can we determine the proper valuation of assets that consist of data gathered from different sources and through different methods? With what comparable transactions or similar assets will we compare a set of data when comparable data was collected using different methods, another business model, and from entirely different sources?

What we actually have is a made up industry called transfer pricing whose issues are resolved by economists, accountants and lawyers whose vital services are badly needed elsewhere. Their services should not be wasted in solving imaginary issues at the altar of tax optimalization, which translates into veritable wealth tax transfer from the working people to the corporations, their shareholders, including billionaires. It is also a wealth transfer from developing countries to rich countries. This manufactured problem entails additional expenses to be passed on to consumers, mostly ordinary folks. Thus, we have to do away with transfer pricing.

In its place. We need a unitary tax system with formulary apportionment, as this will make moot and academic the prices charged by an MNC and their related entities to each other. Under a unitary tax system, all of them will be treated as a single entity where all revenues and all expenses of each of the supposedly separate entities will be accounted for in one income statement and where the taxable income will then be assigned to different jurisdictions based on a fair formulary apportionment that is reflective of actual economic activity in each jurisdiction. This will be aided by the annual disclosure to public country by country reports. Finally, it is clear to us that transfer pricing will certainly make the work on prevention and resolution of tax disputes even more difficult.

We suspect that if we throw in the issue of controlled foreign corporations and sourcing rules of the different tax jurisdictions, the problem becomes even more complicated. Thank you. Thank you, Third World Network. Now we give the floor to the Africa Tax Administration Forum. Thank you, Khalid.


ATAF [2:45:07]:

I think this is a very important issue first and foremost. And we want to start by saying that information asymmetry is one of the critical challenges in transfer pricing and international tax audits. And therefore the fundamental issue that we need to address here is access to the information, including through exchange of information, and obviously ensuring that there is effective exchange of country by country reporting. And this can also be supplemented by having robust and very effective domestic transfer pricing documentation rules in Member States. And so these issues about information needs to be put together as part of the capacity building initiative under the Framework Convention.

And actually they are very important. We say that because commercial databases are only relevant after a transfer pricing analysis have been done and there is a process of accurate delineation and you can determine that you can use a transfer pricing database to price accurately delineated transaction. And therefore there are some situations where you find actually what you need is the proper information and you can use alternative methodologies as opposed to just using the commercial database. They have some benefits though, and therefore we welcome the idea of having the UN considering this and therefore UN can play a role of centralized purchasing of these kind of databases. But I think it's also important to underscore the contribution of regional organizations such as HAF and others that can assist in coordinating effective use and also ensuring that Member States are also well capacity stated to benefit from such databases.

I also want to close my intervention by saying the point made by Zambia is also very important to take into account that is not just having commercial database, but is ensuring that the data set represents the economic realities of the country or the region. And so one of the fundamental things we think about is how the UN and other international organizations and governments, Member states can start thinking about developing requirement, ensuring requirements are in place in their respective countries for data sets to be made publicly available, particularly on the continent. In Africa, where such information is quite limited, that would be an important consideration. To keep in mind. Thank you.


Germany · Co-Lead · Michael [2:47:51]:

Thank you, Aata. Our next speaker is from the International Air Transport Association.


IATA [2:47:59]:

Thank you. Kohlid Ayata speaks on behalf of the global airline industry. We align ourselves with the concerns expressed by several states and stakeholders regarding the confidentiality and integrity of data within any potential UN managed transfer pricing database. Taxpayers. Confidentiality is a fundamental right preserved in domestic legislation and recognized in the OECD model tax convention.

Transfer pricing data is particularly sensitive, containing commercially confidential information about business strategies, pricing and profit margins that could severely harm competitive positions if disclosed. Before discussing governance, critical questions remain unanswered. What information would be included? Who would have access, tax authorities only or others? For what purposes specifically could it be used?

Also not less important is what limits would prevent misuse. These uncertainties are not theoretical. In our sector, which is highly regulated from a competition law standpoint and where commercial margins are tight, unclear data use boundaries pose real risks. Without safeguards, taxpayers will lose confidence in the system, undermining both compliance and the dispute prevention objectives these work streams seeks to achieve. Thank you, Khalid.


Germany · Co-Lead · Michael [2:49:50]:

Thank you. South center, please.


South Centre [2:49:56]:

Thank you, Khalid. The South Centre strongly supports the establishment of a UN transfer pricing database that is accessible to all members. These will resolve the long standing problems of developing countries in accessing databases and finding comparables for transfer pricing. And it will help prevent disputes before they occur and to resolve them effectively when they occur on the financing. Members can contribute to building the database, for example, or for example, through using domestic corporate registries to feed into the global database and also make financial contributions, depending on their capabilities for its maintenance, the protocol can provide guidance for data collection for databases and safeguards for confidentiality and integrity.

It can guide on how to anonymize the data for incorporation in the database as already proposed by members. I thank you.


Germany · Co-Lead · Michael [2:51:07]:

Thank you, South Center. So there are no further requests for the floor with that?

No, there are.

So I give the floor now to the African Union while I look up the other one. African Union, please.


AU [2:51:27]:

Thank you Chair for giving us the floor. We want to weigh in a bit on the case issues around databases. We know that access to information is crucial to case management and also data, both dispute prevention and also resolution.

However, as pointed out by many of our members, it's not enough to have a database. What matters is what information are in those databases and how relevant are they to our member states, reflecting the economic realities of our practices, which sometimes will mean that some of us do not have have experienced in transfer pricing and related matters. Chair, we also want to point out that Looking at the map statistics, over 50% of cases involving cross border dispute are from transfer pricing. And that takes us a bit back to other discussion we have had as a follow up to this very discussion. And we want to encourage members that as we go into detailed development of substantive tax rules in other protocol, we should also weigh options that are not necessarily tied to arm's length principle and then transfer pricing rules generally as a way of minimizing dispute.

Having said that Chair, we also want to weigh in on some things that have been mentioned by our members around making some of this data open. The ones that can be open. Mention has been made of public control by country reporting for instance, which we know could be used in high level of reference. Have made mention of the need to also have a future protocol. I think it's Article 17 of the Tor to have a future protocol on Excel of information.

So we should begin to also look at how far we are going to go in entrenching data and data related commitment under this protocol and how such commitment or trajectory is going to impact on the future protocol and information exchange for tax purposes. We say this because at the end we do not want to make this rule protocol about transfer pricing and data sharing when in the future we'll be constrained to have another protocol possibly on information exchange. We thank you Chair for the opportunity to come back on this one.


Germany · Co-Lead · Michael [2:54:11]:

I thank the African Union for this input. The first now for the Use for Tax Justice Network. Thank you Chair for the opportunity to weigh in on the two critical issues that we are presently deliberating on. My name is Lori Tiugusuk from the Youth for Tax Justice Network and as I speak, please note that my submission is more or less an invitation for reflection for all the stakeholders that we have in the room, all the way from the Member states and the Wax Chair 3 Committee to Youth Representatives and civil society. So first is to acknowledge that the Youth for Tax Justice Network welcomes the idea of a UN managed database and other complementary databases and other complementary databases.


Youth for Tax Justice Network · Lori Tiugusuk [2:54:58]:

The reason for this is because they play an integral role in ensuring effective global tax governance and international cooperation. So let's go through this together. Let's begin with clause M. So as the Committee considers the governance architecture of this potential UN managed database, it would be very useful to take a comprehensive view spanning the key issues that have been written there all the way from financial implications to what oversight will look like, what data governance in this case will look like, participation and even long term sustainability. So. So on the financial implications side of things, we note that a robust global database demands very stable and multi year financing.

So Member States could potentially explore various concepts in this case when it comes to financing. And I'm thinking of this in terms of also the conversation that we were having last week on critical questions of what financing within the entire convention will look like. So will this be hybrid financing models which combine assessed contributions with voluntary funds to probably just reduce some kind of reliance on any single source of financing? Will this look like cost sharing with regional tax organizations that already exist and are heavily weighing into the conversation around global tax governance? And this would be very critical especially for the data gathering phases.

And then the third part to really think about critically is is this going to be happening in phased rollouts? Will it start with pilot countries and then expand to global participation as capacity grows over the years? And then the second part is really about management responsibilities and oversight. So we note that clear delineation of roles will strengthen a lot of credibility within the conversation of what this particular databases will look like. So key questions we have to the committee really and to all the stakeholders is which UN entity will manage the daily operations of this particular database?

How then will responsibilities be divided between data submission, validation, analysis and even publication? Should some kind of independent technical advantage Advisory panel be established to guarantee some kind of neutrality in this case? Is this something that we need to think about in this conversation? And beyond this is, would a regional co chairing model where every region participates in oversight play a role in ensuring the institutionalization of this particular database? And then if you look at the conversations we've been having, we've also been talking a lot about the cop, which is critical in the context conversations that we're trying to have.

So how do we see their role coming into play within the consolidation and overall management of the databases? Now when we move on to clause N, which is exploring whether other types of databases could be considered for us, we're really thinking about it in terms of one data governance. We note that the question of transparency and accessibility comes strongly into play here as especially for countries in the Global south. And as mentioned by ATAF and other countries as well, we have seen that information asymmetry is one of the key barriers to successful institutionalizations of very many complementary and supplementary databases that exist within the frame of tax cooperation. So at that point, how do we reconcile these particular issues within this conversation?

And then how do we also recommend reconcile the confidentiality clauses within elements such as apas and transparency in this particular UN managed database that we're thinking about and how do we also think about this in the frame of the various domestic laws that we have? And then the other critical question is how do we reconcile state managed beneficial ownership databases that we've seen ourselves talk about a lot with this particular database that we're trying to, to bring on board? And then the last part of my submission is really about the development realities which really have direct implications on data collection, analysis, packaging and really just how we're looking at how data has been playing out within the idea of tax dispute resolution and prevention in itself. So beyond this is to also recognize that there have been a lot of data gaps in various countries, especially least developing countries. So how then is that factored in the institutionalization of this particular database?

What do you see that as? And how do we ensure that these realities are factored in the design of this database, its institutionalization and any other part that makes sure that this database works effectively for global tax governance and international cooperation? Thank you, Chair. I submit.


Germany · Co-Lead · Michael [2:59:53]:

Thank you.

There are no more floor requests. With that we have reached the end of the work package that we have had set for this session since Monday. We have received a wide range of input. In some areas we had growing, growing convergence. In other areas there are probably divergence is more remaining or became even more visible.

We must not let ourselves get discouraged by that. I am very confident that together we going to make, continue making progress in the weeks ahead. So I kindly asked the secretariat to flip to the last slide. Exactly. So thank you.

Speaking also on behalf of my colleague Marlene, it goes to you. Thank you so much for your active engagement and all the valuable contributions. And with that I hand over to the chair.


Chair · Khalid [3:01:10]:

Thank you, Michael. And also sending thanks to Marlene and also for Daniel, Daniel and, and Liz a lot for all the work they did and making this session very, very useful for, for, for everyone. And I would like also to thank, before we turn to the formal mood, I would like in an informal way to thank you out of my heart for being here with this spirit and with this open minds for negotiation, which I see like a big difference from even before. I wish this will continue and we work and cooperate more and more the future sessions. So I would like to thank you all again from deeply, from my, my heart and for everything and for all the side talks we have and useful bilaterals that we did together and even the side events that we enjoyed also together.

So I think now it's time to closing this session. So we are gonna end the informal meeting and convert to a formal mood. So this meeting is Closed so the second preliminary meeting of the Committee is called to order.

Now I'm giving my closing remarks. Excellencies, distinguished delegates, dear colleagues, as we conclude this third session of the Intergovernmental Negotiating Committee on the Framework Convention on International Tax Corporation, I want to express my profound appreciation to each of you Member States stakeholders for their dedication, technical precision and collaborative spirit you have brought to the table here in Nairobi. This session marked an important moment in our process. We undertook a systematic review of the course, draft Framework Convention template and the potential solutions under the second Protocol. This session achieved its main objective, providing the inputs needed for the work ahead.

We remain firmly on track with our timeline on all areas. Over the past days, we have delved into some of the most complex and sensitive issues in international tax cooperation. Despite the complexity of these topics, we have managed to clearly identify areas of common understanding and equally important, the specific areas where further technical work is most needed to build reposit and fair international rules. We have also reaffirmed that inclusivity remains at the heart of this process. Even Member States have had the opportunity to contribute from the smallest to the largest delegation from developed to developing countries, all on an equal footing.

Likewise, the participation of civil society, the private sector, academia and other stakeholders has contributed to enrich our understanding and ensure that a diverse range of perspectives informs our work. As we look forward the intercessional period from Nairobi to February in New York, the work streams will continue their meetings. The results of these meetings will will be new revised documents for Work Stream 1 and Work Stream 3 and first version of Options Note to Work Stream 2. I strongly encourage all delegations to engage intensively in this work as the success of our next session in February in New York will depend heavily on the progress we make in the coming weeks.

For stakeholders wishing to participate in the fourth session, information on this project process will be announced shortly and the information will be available on the Committee's website. And of course, for any practical political issue, you can reach to the Secretariat directly. Before we formally close this meeting, allow me also to express my sincere thanks to our colleagues who whose steady leadership and tireless preparation have guided us through challenging topics with clarity and balance. My gratitude also goes to the United Nations Secretariat whose dedication has ensured the smooth functioning of this session. Also to the colleagues, to our colleagues in Kenya for allowing us to have this meeting in this wonderful city and finally to all delegates.

Thank you for your commitment, your professionalism and your unwavering belief in the importance of this process. Excellences and dear colleagues, this committee carries historic mandate to lay the foundation for a fair, effective and inclusive international tax system. The progress we have made here in Nairobi brings us one step closer to that goal. I wish you all safe through travels and productive intersectional period. I look forward to welcoming you in to New York in February for the fourth session of the Committee where we will carry this momentum forward.

Thank you all.

Now I declare closed the third session of the Intergovernmental Negotiating Committee on the United States Nations Framework Convention on International Tax Cooperation. The meeting is adjourned.