(2nd meeting) - Fifth Session of the Intergovernmental Negotiating Committee on the UN Framework Convention on International Tax Cooperation (INC Tax) - 3 to 13 August 2026
Economic and Social Council
Date: 3 August 2026
Language: English
Transcript: https://transcripts.un.org/fr/asset/k1d/k1daebmyos?lang=en
Transcripts available through this tool are created by using automatic speech recognition and are not official records nor official documents of the United Nations. Official records and official documents are available on the Official Document System of the United Nations.

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Chair [0:02]:

So now we are resuming our discussion for Workstream 1. We took all the interventions from member states in the morning session, and now we are moving to the multi-stakeholders interventions. So now I'm handing over to the co-lead Daniel to lead the discussion.

The floor is yours.


Co-Lead [0:26]:

Thank you, Chair, and welcome back, everybody. Um, as indicated, we'll continue the interventions on Articles 1 and 2. So we'll start with the intergovernmental bodies and then we'll join other stakeholders. So, um, African Union, if you're available, please take it. Microphone to African Union, please.


AU [1:09]:

Thank you, Chairperson. The African Union would like also, first of all, to thank you, colleagues, and the Chairperson for the manner in which you are spearheading our discussion and for the draft template that has been proposed for discussion. On Article 1, the African Union associates itself fully with the position expressed by the distinguished delegations of Zambia and Nigeria and all other African countries on behalf of the Africa Group, and we would like to reiterate that We fully support the text as proposed. We would, however, respectfully underscore one of one point of principle. The text of Article One is not a new language before this committee. It reproduces language already agreed by member states in paragraph seven of the terms of reference adopted by the General Assembly. That agreement was the product. Of carefully and hard-won compromise. To reopen it now would not advance our work. It would turn back the hands of the clock on what this process has already achieved and invite the renegotiation of every settled compromise on which this convention rests. We therefore urge that Article 1 be maintained as drafted. On Article 2, on the principle, the African Union supports the principle as rendered, in particular universally— in universality in paragraph A, the flexibility, resilience, and agile approaches of paragraph E, fairness in the allocation of taxing rights in paragraph F, simplicity and administratively accountability in paragraph G, certainty in paragraph H, and the transparency and accountability of taxpayers in paragraph I. We note that Article 2 is also drawn from paragraph 8 and 9 of the Terms of Reference. Consistent with the position we have just expressed on Article 1, we support the retention of Article 2 as It stands. Text agreed in the terms of reference should be carried into the convention undisturbed. That said, Chairperson, we offer 2 technical observations for the record. First, simplicity under paragraph J must be assessed in the light of capacity of developing countries' tax administrations. Rules that are simple only for the host resource authorities cannot be regarded as genuine simple. Second, principles are meaningful only to the extent that they are referred in the operative provisions of the Convention. As this committee proceeds through the template, we will therefore return article by article to identify provisions that remain where the terms of reference envisages binding commitments, and we will bring concise and concrete drafting proposals to that end. Thank you, Chairperson.


Co-Lead [4:47]:

Thank you. INESC, please.


INESC [4:56]:

Good afternoon. Good afternoon, and thank you, Mr. Co-Lead, for giving us the floor. I am from Brazil, from Inesca, and I speak on behalf of the Global Alliance for Tax Justice. Distinguished delegates, we strongly believe that the objectives set forth in Article 1 of the current draft of the tax convention should be preserved in their current form because they already provide a broad, balanced, and forward-looking foundation for international tax cooperation. These objectives establish a common framework capable of accommodating diverse legal traditions and levels of development while advancing a more inclusive global tax architecture under the United Nations. Reopening the objectives could mean shifting the goalposts for the job we have been given by the UN General Assembly and create opportunities to dilute commitments that are already essential for developing countries. However, since member states have decided or proposed that amendments to the objectives are necessary, we urge you to explicitly include the concept of progressivity. Progressive taxation is a cornerstone of equitable tax systems because it aligns tax burdens with taxpayers' ability to pay, thereby helping to reduce excessive inequalities in income and wealth while strengthening the fiscal capacity of governments. We also want to remind delegates that all countries in this room have already committed to progressivity several times before, including in the Sevilla Commitment on Financing for Development, in which governments stressed in paragraph 27 that we will promote progressivity and efficiency across fiscal systems to address inequality and increase revenue. In the current context of unprecedented wealth concentration, growing corporate market power, and widening global inequalities both within and between countries, explicitly recognizing progressivity would reinforce the Convention's commitment to fairness and sustainable development. It would also provide normative guidance for future decisions on issues such as the effective taxation of high net worth individuals, multinational enterprises, and sectors generating extraordinary profits or environmental harm. Including progressivity would also strengthen the Convention's contribution to the realization of human rights and the Sustainable Development Goals. Progressive taxation is crucial for financing universal public services, social protection, climate action, and measures to advance Indigenous Peoples' rights, as well as gender, racial, and economic justice. Moreover, progressive tax systems are consistently associated with greater social cohesion, democratic legitimacy, and public trust. Explicitly recognizing progressive— progressivity among the Convention's objectives would therefore not prescribe specific national tax policies. Rather, it would reinforce a shared international concept that encourages tax systems to contribute to reducing inequalities and while ensuring that those with the greatest economic capacity make a fair contribution to sustainable development. Thank you.


Co-Lead · Daniel [8:14]:

Thank you. DMUN Foundation.


DMUN Foundation · Alexa [8:21]:

Thank you, Chair.

My name is Alexa. I'm delivering this intervention on behalf of DMUN Foundation and the Financing for Development Children and Youth Constituency of the Major Group of Children and Youth on Articles 1 and 2. We welcome the objectives of establishing inclusive, effective, and responsive of international tax cooperation. Articles 1 and 2 should provide a stable foundation for interpreting and implementing the convention while accommodating differences in national legal systems, economic structures, development priorities, and administrative capacities. We also recognize the sovereign right of each member state to determine its tax policies and practices. International cooperation should complement domestic authority by addressing cross-border challenges that cannot be resolved effectively. Through unilateral action while respecting domestic law, applicable international obligations, and the sovereignty of other states. The Convention's Sustainable Development Objectives should be pursued in a balanced manner across economic, social, and environmental dimensions. Stable domestic revenues can support essential public services, infrastructure, employment, investment, and long-term fiscal resilience. Implementation should nevertheless remain proportionate and should avoid creating unnecessary administrative or compliance burdens, particularly for lower-capacity tax administrations, small and medium-sized enterprises, young entrepreneurs, and businesses operating across multiple jurisdictions. We support flexible and resilient approaches capable of responding to digitalization, intangible assets, highly mobile capital, artificial intelligence, crypto assets, and evolving business models. Such flexibility should be accompanied by clear institutional mandates, transparent procedures, periodic technical review, and adequate implementation periods. New rules should be evidence-based and should provide sufficient certainty to governments and taxpayers. Fair allocation of taxing rights should be considered alongside the prevention of both double taxation and double non-taxation. Effective dispute prevention and resolution mechanisms, including accessible procedures and clear timelines, will be important for protecting domestic revenue bases, facilitating cross-border trade and investment, and reducing uncertainty. We further welcome the principles of simplicity, administrability, and certainty. Rules should be no more complex than necessary to achieve their intended purpose. Where appropriate, coordinated reporting standards, compatible digital systems, standardized definitions, and proportionate compliance requirements could reduce duplication while improving tax administration. Transparency and accountability should be supported by due process protection, taxpayer rights, confidentiality requirements, data protection standards, and cybersecurity safeguards. Finally, we encourage the Convention's implementation and review to consider intergenerational equity. Children and young professionals should have structured and transparent opportunities to contribute evidence-based perspectives while preserving the intergovernmental character of the Convention. The DMUN Foundation and the Major Group of Children and Youth remain committed to supporting and an international tax framework that is inclusive, administratable, predictable, and responsive to all needs of all economies. We thank you.


Co-Lead · Daniel [11:27]:

All right, thank you. LatinDED, please.


LatinDED [11:36]:

Gracias. Thank you, Chair. I speak on behalf of LatinDED and the Network of Tax Justice for Latin America and the Caribbean. I would like to begin by recalling that this Convention exists precisely because international frameworks that are currently in effect have shown that they are not in line with the challenges that are to be resolved, and our mission here is to make sure that at the end we are able to overcome this. As the Convention involves evolves, the principles must also be revised to make sure that they are in line with these challenges. In Article 2, we see an imperative need to make the following adjustments. First, subparagraph B recognizes the sovereign right of every state to decide its tax policies, but when this sovereignty is exercised without limits, it can erode the tax base of other states. Therefore, the text should specify that the exercise of this sovereign right should not diminish the rights of other states. States to use their own resources or exercise their taxation rights. The tax cooperation provided for in this convention must respect the sovereign equality of all states and the self-determination of all peoples. Secondly, the article omits certain basic principles such as shared— but common but shared responsibility, the precautionary principle, and the principle of the polluter pays. The principles say 7, 15, and 17 of the Rio Declaration. These are not new concepts for the United Nations. They have already been enshrined in our framework conventions as international obligations that are adopted under the same roof. Therefore, we must incorporate special but differentiated treatment for developing countries here. An article that addresses principles, uh, that without distinction is not neutral. We also ask that the preamble reflects the various relevant resolutions and commitments that are already called for by paragraph 6 of— 16 of the Terms of Reference, as well as those related to human rights and the environment. Thank you.


Co-Lead · Daniel [14:03]:

Thank you.

ETAF, please.


ATAF [14:08]:

Thank you very much, Mr. Co-Lead, for the excellent work that has been done thus far. The African Tax Administration Forum aligns itself with the comments made by Zambia on behalf of the Africa Group, Nigeria, and other African countries, and further, we support and align with the intervention made by the African Union. ATAF welcomes the drafting and the wording of Articles 1 and 2 as they are. These are a reflection of our earlier discussions in the development of the Terms of Reference. We further believe that such language used in these articles address some of the issues that were raised earlier on. For example, Article 1A broadly addresses the issues that were raised by the United Kingdom. Further, Article 1 addresses some of the most important issues for developing countries, and this is particularly important for the African Tax Administration Forum as we serve members who are tax administrations and will have the responsibility of administering the tax rules that are developed by this committee. On Article 2, we further support and reiterate the position taken by the African Union to support this paragraph as it stands. We further stress the importance of simplicity, as this again is a measuring point for developing countries and the administering of simple, fair, and equitable tax rules. We thank you, Chair.


Co-Lead · Daniel [15:49]:

Thank you. ICC, please.


ICC [15:57]:

Thank you, Mr. Chair. As it is the first time we are speaking, let me congratulate you first on the release of the draft of Workstream 1. ICC welcomes the drafting efforts that have been undertaken for the UN Tax Framework Convention draft that we are discussing this week. We recognize Articles 1 and 2 as important provisions establishing the objectives and principles that will guide the interpretation and implementation of the Convention, Framework Convention, as a whole. With regard to Article 1, ICC also supports the objective of establishing effective and inclusive international tax cooperation, and particularly welcomes the recognition of and reference to efficiency, effectiveness, legitimacy, certainty among the objectives of the convention. The inclusion of certainty that could be further reinforced by specific reference to predictability—it is especially important as predictable and stable tax rules are essential for cross-border trade. Investment, job creation, and long-term economic growth. At the same time, ICC continues to believe that the prevention and elimination of double taxation should be also explicitly recognized as a core objective or principle of the convention. While the draft now includes reference to reducing the risk of double taxation in Article 5 on the fair allocation of taxing rights, international tax cooperation should more broadly state that the same income is not subject to multiple layers of taxation, and this is why it's important that recognition of this principle at the objective level is done in the draft, and this would provide indeed an important foundation for future substantive provision and protocol that the COP might also undertake. On Article 2, ICC welcomes the reference to tax sovereignty, flexibility, administrative simplicity, and certainty for taxpayers and governments. These principles are important elements for an effective and workable international tax framework. Framework. However, the article still does not include a corresponding reference to taxpayer rights or safeguards. The reference to alignment with states' obligations under international human rights law is of absolute importance, and we fully support it. At the same time, the Framework Convention should also expressly include a principle on taxpayer rights or safeguards. The importance of taxpayer rights and safeguards have been highlighted by several delegations in the past, and are also recognized in the vast majority, if not all, jurisdictions that are present in the room, whether in their constitutions or tax codes. Taxpayer rights and procedural safeguards are not limited to confidentiality, as it was highlighted in the past. They also include the right to a due process, right to non-discrimination, access to effective remedies, and timely dispute prevention resolution mechanism, which is also one of the topics of one of the 2 protocols. Taxpayer rights and safeguards should therefore be expressly recognized among the guiding principles of the convention and future protocols. And indeed, we remain open and happy to provide specific language suggestions in our written consultation response. To conclude, a balanced framework that promotes both taxpayer compliance and taxpayer protection would strengthen confidence in the international tax system, support voluntary compliance, and contribute to the effective and consistent implementation of the convention. And with this, I thank you, Mr. Chair.


Co-Lead · Daniel [19:13]:

Thank you. BCAS, please.


BCAS [19:20]:

Thank you, Chair and co-lead. One of the issues which keeps on coming time and again— it has come up since morning as well— is about duplication of work, duplication considering that a lot of work has already been done in other forums. Now, this issue of duplication, you know, probably needs to be addressed properly so that this convention is considered in the right context. And this issue can be addressed probably in the preamble itself. I'm not sure whether we are going to have a preamble, but I believe we should have a preamble wherein this issue will be discussed and addressed. Maybe it will be recognized that, yes, there is a duplication and also justify, you know, why is this duplication getting addressed. So the preamble could probably say that, well, a lot of work is happening in the other forums. However, that work is either incomplete, you know, things like Pillar 1, or all the countries are probably not happy with the other work which is completed. And that's how we justify duplication of work And that sets a context, you know, what led to creation of this entire initiative, why this Framework Convention was required. Thank you.


Co-Lead · Daniel [20:39]:

Thank you. Eurodad, please.


Eurodad [20:46]:

Thank you so much, Mr. Co-Lead. It was said this morning that if we cannot negotiate the text, why are we here? In principle, we agree with that. However, we must also bear in mind that we are here because the UN General Assembly has given us a job and a deadline. We welcome all countries that want to help finish the task, but it is very important not to obstruct the process. If the changes that are being suggested are so fundamental that they would go against the mandate we have been given, This is not negotiation in good faith. We've been tasked to establish an international tax system for sustainable development and consider the work of existing forums, but we have very clearly not been asked to endorse the work of existing forums, and language to that effect does not belong in the convention. Secondly, we hear calls for decision-making to be made by consensus. It's surprising to us that the countries that are calling for consensus are also the ones defending the OECD system. A third of the member states in this room were never part of the OECD negotiations, and yet they have all been expected to follow the rules and even threatened with blacklisting if they didn't. The truth is that there's never been a consensus on international taxation, but what we have here at the UN is a space that at least allows countries to participate on an equal footing. About national sovereignty, the OECD's approach has obviously raised strong concerns in this regard. And we have another problem as well: the fact that some countries have used their national sovereignty to introduce harmful tax practices that make it impossible for other countries to effectively tax wealthy individuals and multinational corporations. Thus, national sovereignty must be linked with an obligation to cooperate internationally and refrain from undermining the national sovereignty of others. Lastly, we want to remind delegates that the OECD system has failed for everyone. In absolute numbers, the OECD countries are losing the biggest amount of tax revenue due to international tax abuse. The vast majority of the countries in this room stand to gain revenue from the UN Tax Convention. Let's not waste time. Let's negotiate in good faith and finish the job we've been given by the General Assembly. I thank you.


Co-Lead [23:23]:

Thank you. ILO, please.


ILO [23:30]:

Thank you, Mr. Co-Lead.

Thank you also, Mr.

Chair, and allow me to also thank our colleagues from UN DESA and DGACM for the support to our discussions here. Since this is the first time that the ILO is speaking, let me offer our congratulations on the release of the draft Framework Convention template, which the ILO obviously welcomes. Our comments today are restricted to Article 1, for which we would like to put forward a proposal which is supported by the International Social Security Association. We'd like to emphasize that enhanced international cooperation serves the realization of human rights, the eradication of poverty, and the reduction of inequality as foundational purposes. While we appreciate the objectives under Article 1 as drafted, we would like to respectfully advocate for the inclusion of language anchored in the Universal Declaration of Human Rights, the International Covenant on Economic, Social and Cultural Rights, and the 2030 Agenda for Sustainable Development, in particular SDG 1 and SDG 10, and the Compromiso de Sevilla's commitment to domestic resource mobilization. Such framing positions the Convention within the UN system's normative framework and establishes a rights-based foundation for all subsequent protocols and implementation measures. We note that as Article 1 reads, what we would like to propose is that this paragraph be strengthened with the following addition so that it reads at the end of paragraph C that ends with resource mobilization to continue in a manner consistent with the United Nations international human rights instruments Full stop. In particular, ratifying states should ensure the progressive extension of social protection coverage, including floors, to all, in line with ILO international labor standards. I repeat, at the end of resource mobilization, in a manner consistent with the United Nations international human rights instruments, full stop. In particular, ratifying states should ensure the progressive extension of social protection coverage, including floors, to all, in line with ILO international labor standards. I thank you.


Chair [25:58]:

Thank you. Thank you. CFS, please.


CFS [26:04]:

Thank you, Khaled, and congratulations on the zero draft, which provides the pathway towards substantive decision-making going forward. I wanted to share an observation on Article 2, Article 2, paragraphs C and H, rather, to make a comparison. Now, taxpayers' interests are protected in a very careful operative detail under Article 11. If you look at Article 11, it protects confidentiality, it protects trade secrets, it protects professional secrets, it protects information against disclosure on grounds of public policy. Now, those protections are proper, and they actually belong under Article 11. But if we look for human rights, there is only one line, and that is in Article 2, paragraph C, which provides the guiding principle, and then there is silence in the rest of the instrument. So it seems that the draft happens to protect in detail the confidentiality of those who happen to hold wealth, and in a single sentence, the rights of the people who depend on what tax revenue pays for. But this is easy to correct and can be done through Article 4 on sustainable development, which speaks of the economic, social, and environmental dimensions of cooperation. So to this article, it would be useful to add an operative paragraph that provides that cooperation under this convention shall be carried out consistently With each state party's respective obligations under international human rights law and shall support the mobilization of resources for the realization of economic and social rights. This is also to operationalize the principle itself, which is stated under Article 2, paragraph C. Thank you.


Chair [27:57]:

Thank you. CEDD, please.


CEDD [28:03]:

Thank you, Mr. Colleague. Mr. Chairman, I take the floor on behalf of Cabinet d'Études et de Conseils en Environnement et Développement Durable, an accredited organization based in Kinshasa, Democratic Republic of the Congo. I thank the co-leads for the quality of draft 0. On Article 1, we welcome the 3 objectives: anchoring tax cooperation in sustainable development and domestic resource mobilization responds to the expectations of developing countries. We invite the committee to preserve in subparagraph C They express reference to the fairness and the legitimacy of the international tax system. For an attractive economy such as ours, these words carry a measurable reality. Each year, considerable resources leave the African continent without taxation. On Article 2, 3 principles deserve to be maintained. Without dilution. First, universality combined with attention to countries in special situations, including the least developed countries. Second, the balance between each state's tax sovereignty and respect for that of others, which protects source jurisdictions. Third, alignment with the human rights obligations which links taxation to the financing of essential public service. CEDD supports the adoption of these 2 articles as the foundation of the text. Thank you, Mr. Chairman.


Chair [30:07]:

All right. Thank you. Stakeholder 1, please. That's the UN Independent Expert.


UN · Independent Expert [30:17]:

Thank you for the floor, Chair. I will make 2 brief points, but firstly, I'd like to say congratulations on having a draft ready. It's no easy feat, I know. And while we look at this draft, the conversations have been very interesting, particularly because there's been a repetition of conversations which we thought were quite settled, at least I did, but they're back on the table again, and it would be great to have some guidance as to whether we will be going through this for the remainder of the 2 weeks, or if we're going to actually have some agreement going forward on the language as we go forward through this. So, 2 particular issues I'd like to point out. First is the conversation around preamble. Normally, preambles set out the reasons for a treaty, their shared goals, as well as rules of interpretation. If that is the intention of the addition of a preamble, then that would be valid. However, the language of objectives and principles as they are set out are actually as objectives and principles, and moving them is not going to solve the need for a preamble. So I think that deserves a different conversation, if at all. My second point is the issue around the principles, specifically 2, on the alignment under international human rights law. I share similar sentiments to that of, I think it was CFS. You don't actually have an unpacking of what we mean by international human rights law, which is why I also hear from the floor conversations around taxpayers' rights. There is a difference in approach on taxpayers' rights within regional spaces. For example, Europe has a different understanding of taxpayers' rights from other parts of the world, and so referring to taxpayers' rights has to be treated very carefully here. And the use of the word, I think, international human rights law does cover it adequately, so we know we're not dealing with regional approaches. So I think that is very useful. However, if I come to the conversation on the need to unpack this in a separate article, I am also in agreement. Article 4 would be a useful place to add a paragraph. However, we must make sure that we are not dealing with regional or national-level interpretations or understandings, but actually global ones. I thank you very much for the floor.


Co-Lead · Daniel [32:39]:

Thank you. Thank you for that intervention. All the comments have been noted. I believe that where we have written comments, we can submit this. We've already indicated that, given a timeline for submission of written comments after this session, so we can all do that as we go along. I want to move to the next item on the agenda, which is Now, Article 4, as agreed by the Bureau and everyone else. The— and just a quick one, we are not skipping Article 3 just for skipping's sake, but generally we would like to have everything, then we can look at the definitions and put them all there, have a discussion on that.


Speaker 27 [33:36]:

Thank you.


Co-Lead · Daniel [33:37]:

So the next item is Article 4. Question really that arises, that we've gone over this over and over again. So I know some people have suggested reopening. We would be grateful if in reopening you have specific text you want us to— just raising concerns again does not help us. If you have something specific you want to say that maybe include this or include that, I mean when you're doing your written submissions you can give us text, but it will be good to be precise on what we want to do. This morning we spent our time going around basically in circles on the same issues. So if we have additional things, let's add them. So with that, I will open Article 4 for any immediate comments on that. Thank you. Jamaica, please.


Jamaica [35:17]:

Thank you very much, um, co-lead, and Uh, congratulations to you and the team, and of course, this including the Secretariat, for, for the draft. In relation to Article 4, we just want to put, um, put you on notice that we will be making written input. But just to give you an idea of what our written input will include, uh, we— and as you are aware, we have always been concerned about the lack of emphasis that was placed on on the environment as a pillar of sustainable development. And so our proposal by way of written input will aim to take into account states' common but differentiated responsibilities and respective capabilities. The states party agreed to pursue international tax cooperation approaches that are aligned and informed by the principle of sustainable development in a manner that promotes the alignment of fiscal policies with the international commitments assumed under environmental treaties. In essence, Chair, the text brings together 2 principles of international environmental law: the principle of sustainable development and the principle of common but differentiated responsibilities and respective capabilities. The aim, Chair, is to highlight that environmental issues are linked to economic development, and we feel that the article is short on that. We also take into consideration developments that have taken place since this was discussed in the Terms of Reference, such as the ICJ Advisory on Climate Change, as well as several other international fora in which this matter has been discussed and to which many of our countries are parties. So that is our contribution in relation to this chair.


Co-Lead · Daniel [37:21]:

Thank you, Jamaica. Brazil, please.


Brazil [37:27]:

Thank you, Khalid, and thank you for submission of this draft. Brazil believes that this article is a good starting point, but we would propose further elaboration on the text. And we will provide written inputs for this. So this further elaboration would guarantee that the tax cooperation contributes to domestic resource mobilization and to sustainable development. Brazil would also like to see the affirmation that the efforts to advance sustainable development through international tax cooperation must respect, protect, and promote all human rights. And contribute to addressing historical and structural inequalities, including those related to gender and race. In Brazil's view, tax policies and international tax arrangements should be designed and implemented in a manner to promote fairness, social inclusion, and equitable development outcomes. Brazil would also like to see stronger recognition of the need for policy and practice coherence between tax and Sustainable Development Objectives, and the acknowledgement of the importance of environmental sustainability principles, including the principle of common but differentiated responsibilities. Brazil considers such principles essential to ensuring fairness and accountability in international tax cooperation. In addition, Brazil would also like to include language encouraging progressive tax as an important means to aligning tax obligations with individuals' abilities to pay, of strengthening domestic resource mobilization in an equitable manner. Finally, Brazil supports the inclusion of a mechanism for periodic review by the Conference of the Parties of the Convention's contribution to economic, social, environmental dimensions of sustainable development in consultation with relevant international forums. Brazil believes that such reviews would provide valuable guidance and help ensure that the Convention remains responsive to the evolving development challenges and priorities. Thank you.


Co-Lead [39:41]:

Thank you. Mexico, please.


Mexico [39:45]:

Thank you very much, Co-Lead, and thank you to colleagues. It is our view as well that this article is welcome, and as we mentioned before in our statements, you know, we appreciate that there's a principle an article on sustainable development. As mentioned before, this was the main driver for the resolution back in '22, and it was one of the key elements for the terms of reference in which how were we going to link the impact and work of this convention to drive sustainable development, particularly for developing countries, and tackle IFF. So we're happy that the text has been included. We coincide with other colleagues in the sense that this could be further elaborated upon. As my colleague from, from Jamaica mentioned, I think that the consideration of expanding on the climate considerations has been a long-standing plea from certain groups and countries in this process. So we would welcome also to see the language that's going to be drafted by them so that we can also contribute to expand on the environmental dimension related to tax policy that this convention will take forward. And of course, with our colleague from Brazil just mentioned, we think that this should also expand a little bit more on the specificities that the sustainable development and the 2030 Agenda actually look upon. So we would welcome more language, and we will work with our colleagues maybe as a regional submission in a sense to put forward elements that link to gender, to race, and to other issues that continually promote the implementation of sustainable development. sustainable development and see how we can integrate human rights in this article as well. As mentioned, this is one of the principles that does not have an article, and we have mentioned that we would be very willing to add something on the full respect of human rights. Perhaps the discussion on whether or not fiscal policy actually impacts the achievement of human rights is something that our colleagues from the tax administrations will— argue about, but I think that for us, the fight for fair and just economic and social rights to contribute to the achievement of specific human rights related to access to basic services or to rights on water, sanitation, and others do stem from fiscal policy. So we would see some work on that end from our colleagues, and we would welcome trying to send something to you by the deadline. Thank you.


Co-Lead [42:12]:

Thank you. United Kingdom, please.


United Kingdom of Great Britain and Northern Ireland [42:18]:

So we've always, I think, throughout this process supported the inclusion of a sustainable development article, and indeed we think international tax cooperation should support sustainable development, including by strengthening domestic resource mobilization, supporting inclusive growth, and ensuring coherence with wider financing for development commitments, including the severe commitment. And we wanted to note that the UK, amongst wider jurisdictions, some of whom have spoken on the floor already today, have tabled proposed text in written comments in previous sessions, drawing on themes including sustainable development, human rights, and environment principles. And we are disappointed that this has not yet been incorporated in the text. Promoting sustainable development and human rights is a core role of the UN, was central to the FFD4 agreement, And the UK is steadfast in our support for achieving sustainable development worldwide. Like others, we would like to urge relooking again at this commitment and seeing what more can be done here. Thank you.


Co-Lead [43:13]:

Thank you. Azerbaijan, please.


Azerbaijan [43:15]:

Thank you very much, Mr. Collett, for giving me the floor. Azerbaijan supports the overall direction of Article 4. However, we support the reference to the different capacities of state parties. We suggest strengthening this provision by expressly recognizing the role of tax policy and tax administration in achieving sustainable development. In particular, Article 4 could clarify that international tax cooperation should support domestic resource mobilization, broaden the tax base, improve tax compliance, and address tax avoidance and evasion while preserving investment employment, economic growth, and national competitiveness. We also suggest that reference to the environmental dimension of sustainable development should be directly linked to taxation. In this regard, tax cooperation may include exchange of experience on environmental tax, carbon-related tax measures, tax incentives for green investment, and the prevention of harmful tax practices affecting environmental objectives. At the same time, such measures should respect national circumstances, level of economic development, and energy transition priorities. They should be designed in proportionate and administrable manner and should not create excessive burdens for developing countries. Thank you very much.


Co-Lead [44:41]:

Thank you. Okay, India, please, then I'll make a comment.


India [44:48]:

Thank you, co-lead. Let me begin by saying that as such we do not have an issue with this language and we are happy with this language and it is our understanding that this language has remained this way for quite some time. But that said, we recognize that there are concerns in the room that this needs to be expanded a little bit. So while that is fine, but at the same time what we would like to see that at least in the matter of specific measures, the language that we eventually see is not very prescriptive. I think this debate has gone on for quite some time as to where that balance should be struck between specificity and being high level in the articles of the Framework Convention, and I think this is one article which has seen a lot of debate on this point. So while we understand that there are calls for reference to domestic resource mobilization, so that is fine, but at the same time we would be a little wary of having very, very specific measures being put into the language. So we are happy to see language that would refer to the strengthening of domestic resource mobilization as a key means to reduce inequalities and to promote inclusive growth. And while— but the language should also— we would hope that the language would include that the aim is to enhance national capacity. To generate fair revenues, but would at the same time safeguard every state's policy space to design its own tax systems, and that should be in accordance with its own development priorities and circumstances. So this is something that we would be more comfortable as and when this— if and when this— the language of this article is expanded. Thank you.


Co-Lead [47:03]:

Thank you. Before I move to the stakeholders, I think UK just made a statement, and in the first session there was some reference to it. UK's statement was that they've made several interventions on sustainable development and it doesn't reflect in the text. Um, we are negotiating as member states and we try to reflect what comes out as a majority view in that sense. So yes, something— we might make some interventions that might not reflect because it might not be quite— and it might be 1 or 2, 3, maybe 5, 6 people, entities that make it. But then there's some on the wider front. That is why what we've tried to capture. So I think It's not that what we say is not heard, what we write is not seen, but we try to capture what is the majority view in terms of what we are doing. Thank you. Saudi Arabia, please.


Saudi Arabia [48:09]:

Thank you, Mr. Kohlides. As you rightly noted in the beginning, we have all worked through this issue thoroughly, and Saudi Arabia appreciates the ongoing efforts and wishes to express its support for maintaining the sustainable development provision in its current form. We believe that keeping the text as it is without expansion preserves the careful balance we have achieved, and also taking consideration that such topic may extend beyond tax experts and need subject matter experts. Maybe just to help the text to be refined further, we suggest adjusting the term agree to pursue to something else, maybe something that says shall endeavor to promote or similar language to that. Which we believe that it captures a shared collaborative spirit and aligns well with an international practice and languages used before. Thank you.


Co-Lead · Daniel [49:23]:

All right, thank you. Nori, please.


Norway [49:31]:

Thank you, Mr. Kolid. And in response to your call for expression of interest to look at expanding the language here somewhat, in particular in relation to human rights, environmental issues. I just wanted to flag that we have noted what has been suggested by several delegations, and we are interested in looking into those proposals going forward. Thank you.


Co-Lead · Daniel [50:04]:

Thank you. Okay, I don't see any— ah, Mexico, you want to add? Then please be succinct.


Mexico [50:19]:

Thank you, co-leaders. Succinct as I can be. We heard the delegations speak on this article. I think that if If the line is to not entertain any changes, then we would also not be in a position to entertain weakening the language at the very first line on the agreeing to pursue. Thank you.


Co-Lead · Daniel [50:42]:

All right, thank you, Mexico. Right, um, ILO, please.


ILO [50:52]:

Thank you, Mr. Co-Lead. Our interventions are again supported by the International Social Security Association, and we have heard several member states emphasize the need to expand Article 4 while maintaining an appropriate balance between specificity and the general nature of a framework convention. We recognize that balance, and at the same time, as the language is further developed, we believe it is important that the connection between international tax cooperation, domestic resource mobilization, and universal social protection be clearly reflected. We welcome the recognition that the convention should contribute to the implementation of the 2030 Agenda, and in that spirit, we encourage member states to strengthen Article 4 by making explicit the link between international cooperation, domestic resource mobilization, and certainly sustainable development. In particular, Article 4 should recognize universal social protection as a central objective. Progressive taxation and social protection are among the most effective means of reducing poverty and inequality, while also supporting inclusive growth, decent work, and stronger domestic resources. We therefore invite Member States to consider language supporting the progressive extension of social protection coverage, including social protection floors, in line with the relevant International Labour Organization international labour standards. Of course, the ILO and the International Social Security Association will submit more detailed proposals in writing and we thank you, Mr. Kohlert.


Co-Lead · Daniel [52:27]:

Thank you, NTR. Oh, sorry, Colombia, please.


Colombia [52:34]:

Gracias, señor presidente. Thank you, Chair. Good afternoon to all colleagues once again. And once again, I'd like to thank the Secretariat Chair. We are not going to refer specifically to Article 4 but to the whole process, and we just wondered whether we are going to have openness, a window to consider an article. Well, if so, we should have the same openness to consider the concerns that have been raised now by a number of delegations. And so in this regard, I would like to indicate that the Terms of Reference, as their name indicates, are just a reference point. They are not a legally binding text. If we are going to adopt the theory according to which they are binding and they tie this assembly and these negotiations down, we would therefore be accepting that the Terms of residence have a greater legal value than the convention that we haven't yet finished writing. And so in this regard, I would like to point out that the terms of reference in paragraph 6 specifically refer to a preamble and should reflect inter alia is the expression used in English. Means is that the principles also include the possibility of other references inter alia other than the 4 principles that are mentioned there inter alia. Thank you.


Chair [54:17]:

Thank you. Zambia, please.


Zambia [54:22]:

Thank you, Chair, and good afternoon. Thank you for this opportunity to make comments on Article 4.


Speaker 52 [54:30]:

Thank you.


Africa Group [54:30]:

Speaking on behalf of the Africa Group member states, that are 54 states that I'm representing, from the Africa Group, Article 4 Sustainable Development Article as presented, we are fully in support of the Article and text as it is. The article starts by taking into account the different capacities of the member states, and we believe this is a key component in ensuring that the different capacities are taken into account as member states take that commitment to enhance sustainable development for purposes of domestic resource mobilization. We also take note that the article covers the 3 key dimensions that are needed for sustainable development, that is economic, social, and environmental aspects. And therefore, for us, we support that the text as it is should remain. We don't see any further changes to be made. We take note that there are other member states that have suggested that they would like to have this changed, and obviously we'll see what will be submitted in terms of the text, but the position of the Africa Group is that we are happy with the way the text has been provided, and it fully aligns with most of the issues that we want the Framework Convention to cover with respect to sustainable development. I submit. Thank you.


Chair [56:14]:

Thank you. China, please.


China [56:18]:

Thank you, Chair. First of all, I'd like to emphasize that China strongly supports sustainable development and other United Nations agendas. Regarding Article 4, we consider this provision to be of great importance, and now we endorse the current wording of the text. which is appropriately pitched at a high level and consistent with the terms of reference. In the interest of efficiency, we propose to retain the existing language without material amendment. Thank you.


Chair [56:59]:

Thank you. African Union, please.


AU [57:06]:

Thank you, Chair. The African Union would like to also align its perspective with the Africa Group and underscore the fact that the text before us is comprehensive and captures the essence of what we have in the terms of reference, and we would therefore want to insist on the fact that the text be kept as Thank you.


Chair [57:35]:

Now, NTRL, please.


NTRL [57:45]:

Thank you, Chair. We would like to welcome the inclusion of sustainable development both in objectives and principles of the Framework Convention, Articles Articles 1 and 2. While the duplication of the reference to sustainable development in these 2 provisions may be open to some critical comments, we understand that these provisions remain consistent with the wording and the structure approved in the Terms of Reference. However, we consider that Article 4 should provide clear guidance regarding the relationship between international tax cooperation and sustainable development. In particular, we should make explicit reference to Sustainable Development Goals 4, 5, 10, 16, and 17. Without a clear link to objective such as reducing inequalities, strengthening institutions, and increasing the mobilization of domestic resources, this provision risks providing insufficient policy guidance and weakening the Convention alignment with commitments already recognized, including the Addis Ababa action agenda. In our view, the UN Framework Convention has the potential to transform sustainable development from a general objective and principle to an international tax cooperation in— into a multidimensional framework for the design, the interpretation, the implementation, and the evaluation of international tax instrument. We therefore respectfully invite the colleagues to consider the Novatax Lobby proposed wording for Article 4 as our submission in— on February 2026, which aims to establish a more explicit and operational link between international tax cooperation, Sustainable Development Goals, and the broader framework for development financial. Thank you.


Chair · Khalid [1:00:20]:

Thank you. Stakeholder 1, that's Amazon Watch.


Amazon Watch [1:00:31]:

Thank you, Chair. As an indigenous person from the Kichwa people of the Ecuadorian Amazon, I'm here because the outcome of this Convention matters to the future of Indigenous Peoples. Indigenous Peoples account for 6% of the world's population, representing more than 5,000 distinct cultures and languages, and steward many of the world's most biodiverse ecosystems. Yet current tax systems continue to fail Indigenous Peoples. Indigenous Peoples continue to be among those most frequently left behind, experiencing disproportionately high levels of poverty and inequalities, including a lack of access to health, education, and other essential public services. Furthermore, current tax systems continue to incentivize harmful industries that pollute our rivers, destroy our forests and livelihoods, and harm our health and well-being. In recognition of the historic and ongoing injustices, the UN General Assembly adopted in 2007 the UN Declaration on the Rights of Indigenous Peoples, which has been endorsed by all UN member states. It recognizes that Indigenous Peoples have distinct collective rights, including the right to self-determination, self-government, and to participate in decision-making on matters that affect us. Further, the 2025 UN General Assembly Resolution 80/191 on the Rights of Indigenous Peoples emphasizes that sustainable development should prioritize those who have been left furthest behind. Particularly Indigenous Peoples, and that Indigenous Peoples should participate in, contribute to, and benefit from sustainable development. The Terms of Reference for this Convention already provide that it should promote sustainable development and be aligned with States' obligations under international human rights law. It's therefore striking that the current draft does not yet include the rights of Indigenous Peoples. Distinguished delegates, if the Convention is to promote sustainable development, and be aligned with international human rights law, then Article 4 should include an explicit reference to align with the UN Declaration on the Rights of Indigenous Peoples. Thank you.


Chair · Khalid [1:02:35]:

Thank you. JPI, please.


Greenpeace International · Abdullah Jalloh [1:02:41]:

Thank you, Khalid. Thank you, Khalid. My name is Abdullah Jalloh. I speak on behalf of Greenpeace International. Distinguished delegates, while we see further developments in other parts of the Framework Convention, the provision in Article 4 on sustainable development remains inadequate. The mere restatement of the mandate given by the Terms of Reference is insufficient to actually operationalize it. It does not spell out what does— it does not spell out what needs to happen to establish an international tax system for sustainable development? What does it take to achieve the 3 dimensions of sustainable development in a balanced and integrated manner? And what action and concrete practical measures are governments mandated to take to deliver this? Article 4 doesn't give any answers and it is currently far more vague than other articles which are significantly longer and more detailed. The current draft doesn't reflect the debate and demands made previously in this room. Numerous verbal and written interventions have called for this article to be strengthened. For example, 4 European countries are calling for the inclusion of the polluter's pay principle. At least 4 African countries are calling for the article to go beyond general principle and include practical measures. One more African country and a Caribbean country are highlighting the importance of further aligning this article with the broader objective of the United Nations, like the Sustainable Development Goals and climate goals. One Latin American country proposed bringing progressively— progressivity and common but differentiated responsibility and respect— and respective capabilities into the text. We urge these inputs are reflected into the text. At a time when communities worldwide are enduring devastating heat waves, catastrophic floods, and raging wildfires, as well as unprecedented biodiversity loss, this article cannot remain silent on who should pay for climate destruction, nor can it assume that taxing— that taxworking families or relying solely on carbon pricing is the solution. Since the last round of negotiations, international oil companies have contributed— have continued to extract billions of profit and the world witnesses its first trillionaire. The need for binding rules to deliver progressive environmental tax has never been clearer. Article IV must ensure that those who are profiting from the crisis pay the most and that the countries and communities least responsible receive the greatest share of revenue to invest in our shared future. Thank you.


Chair · Khalid [1:05:31]:

Thank you. APM Didi, please.


APMDD [1:05:37]:

I speak on behalf of the Asian People's Movement on Debt and Development and the Tax and Gender Working Group hosted by the Global Alliance for Tax Justice. Just 3 weeks ago, The High-Level Political Forum on Sustainable Development concluded with a disturbing assessment of the progress in achieving targets under Sustainable Development Goals. Only 36% are on track to moderate progress, and 15% have even moved backwards. Hence, the ministerial declaration commits countries to act with urgency to realize the vision of people, planet prosperity, peace, and partnership, leaving no one behind. In this regard, we urge you to develop a robust and substantive text for Article 4. It should clearly elaborate on international tax approaches that, especially for developing countries, strengthen domestic resource mobilization and that significantly contribute to realizing the following: Firstly, a whole set of international commitments on addressing inequalities and ending discrimination based on gender and race, such as the Convention on the Elimination of All Forms of Discrimination Against Women, the International Convention on the Elimination of Racial Discrimination, and many other conventions. The latest international commitment that's very significant significant is the 4th International Conference on Financing for Development outcome document, which reinforced international commitments to mobilizing adequate public resources to realize women's rights, non-discrimination, and substantive gender equality. The question before us, therefore, is not whether gender equality belongs in the UN Tax Convention, but whether the Convention will equip states with the fiscal tools needed to fulfill those commitments and obligations. The second set is the Agenda 2030 for Sustainable Development and the commitment to leave no one behind. For too long, the world has suffered the consequences of a flawed international tax architecture and regressive tax systems that have left behind economically marginalized groups and sectors discriminated against on the basis of gender, race, class, caste, occupation, ethnicity, and religion. These include women, workers, indigenous peoples, rural communities, the youth. What we must leave behind now are the tax policies and practices that serve as roadblocks to achieving sustainable development. Sustainable development is possible only if taxation does not facilitate the transfer of wealth from the Global South countries to the Global North. We cannot continue with tax rules that produce lower effective tax rates for billionaires and higher effective tax rates for the poor and the middle class. Instead, the convention must include an explicit commitment in language and substance to promoting progressive and gender-responsive taxation that serves a broader transformative and redistributive economic vision. Thank you. All right, thank you.


Co-Lead · Daniel [1:09:14]:

ICC, please.


ICC [1:09:19]:

Thank you, Mr. Chair. I will be brief. With regard to Article 4, ICC welcomes the recognition that international tax cooperation contributes to sustainable development in its economic, social, and environmental dimensions. ICC is firmly committed to the achievement of the Sustainable Development Goals. In the context of reviewing the language of the current article, as we heard there is interest from some member countries, and in order to provide a business perspective on the topic, we would just encourage member countries to consider an ICC paper from 2018 titled Tax and the UN Sustainable Goals, which was elaborated by the ICC Tax Commission, exchanging also with UN experts and stakeholders. The paper addresses how effective tax policy can facilitate sustainable economic growth and, in doing so, support the UN SDGs. Just a suggestion for further elaboration.


Co-Lead · Daniel [1:10:09]:

All right, thank you. Nigeria, please.


Nigeria [1:10:15]:

Thanks, co-chair, and good afternoon, colleagues. Apologies, my flag came up a bit late, just trying to listen to conversation around the— in the room. I think for us, we support the article and we find it actually in order because all the relevant dimensions have been covered. Economic, social, and environmental. And even though we have listened carefully to discussions in the room, we believe that suggestions that have been tabled by colleagues, Excellencies, can actually fit into any of these 3 dimensions. So as we have written before and as we have confirmed, as Nigeria, we support these words as they are. And we also support the positions that have been advanced by other colleagues, especially by the African Union team. Thank you so much.


Co-Lead · Daniel [1:11:16]:

Thank you. HRW, please.


HRW · Sarah Sadoun [1:11:20]:

Thank you, Khaled. My name is Sarah Sadoun, and speaking on behalf of Human Rights Watch, I want to support the statement of Mexico and others in support of including human rights in Article 4. Human rights are key to achieving sustainable development. International human rights law obligates states to use the maximum of their available resources to progressively realize economic, social, and cultural rights, including the rights to health, education, and social security. This obligation runs not only domestically but through international assistance and cooperation. It necessarily implicates tax policy both at home and in international fora with respect to their own populations and with respect to the impact on other governments' ability to fulfill their rights obligations. The catastrophic human rights impacts of the current system are why we're all here. Between 2019 and 2022, 37 governments cut per capita health spending in real terms. Education spending per child has stagnated or fallen globally. Roughly half the world's population has no social security coverage at all, a gap that has left an estimated 336 million more people food insecure than before the pandemic. This treaty is a historic opportunity to help reverse that trend by building a global tax system aligned with human rights. As the UN Committee on Economic, Social, and Cultural Rights recently affirmed, that means tax systems must be adequate, progressive, non-discriminatory, and effective at stopping illicit financial flows and tax abuse. It also means individual rights must be Everyone has the right to due process, privacy, nondiscrimination, as well as the right of defense and effective remedies in tax administration. Although it must be said, because this point is often misconstrued, that human rights belong to people, not corporations. Aligning international tax cooperation with human rights obligations is not a peripheral concern. It is essential to this treaty achieving its core objective, an effective, fair international tax system.


Co-Lead · Daniel [1:13:16]:

Thank you. Thank you, HRW. With that, I want to say thank you to everyone for the comments on this particular article. We'll take a 10-minute break and then we'll come back and continue with Article 5. I think we can congratulate ourselves. We are Keeping to time now, and so 10 minutes to allow us to just stretch and then come back. We'll continue at 5. Thank you.


Speaker 73 [1:13:50]:

Thank you.


Chair [1:28:01]:

Welcome back. Now we'll continue the discussion for the Convention, moving to Article 5, the most interesting article in the Convention. Now I hand over to Daniel to start the discussion for Article 5, fair allocation of taxing rights.


Co-Lead · Daniel [1:28:22]:

Thank you, Chair, and welcome back everybody. As the Chair said, Article 5 is one of the key discussions that I believe we've gone over and over again, and we have once again tried to capture what we believe member states wanted, but we still want to give the opportunity to member states to comment. Again, we will be grateful for specific comments on specific items which we should address Um, I believe that everybody has concerns, and so let's translate our concerns into specific suggestions. Thank you, and it's now open for discussion. Article 5.


Speaker 76 [1:29:28]:

Chair, please.


Czechia · Cecilia [1:29:33]:

Thank you, thank you, Mr. Corbett, for giving me the floor. Czechia would like to state that we consider the current wording of the first paragraph to be unclear and therefore increasing legal uncertainty. The main issue is that the text mentions several possible nexus to be used as a basis for allocation of taxing rights, but the provision does not establish any hierarchy and tiebreaker rules between these nexus. In addition, in line with Article 2, Letter E, the approaches in the Framework Convention should, amongst other things, Be flexible, resilient, and agile as societies, technology, and business models evolve. Hence, this text would be unnecessarily limiting any solutions for future issues that might arise in relation to taxing rates. In addition, we would like to point out that the provision does not specify in relation to what taxes or income or consumption taxing rates are. For these reasons, we would like to suggest editing the text after the words contribution of each relevant jurisdiction and dealing with the question of what particular nexus to use in protocols. Then we would suggest adding language specifying to what nexus this provision is related to in the first paragraph. Thank you very much.


Co-Lead · Daniel [1:30:39]:

Thank you, Cecilia. As you've indicated what we should take out, we'll be grateful if somewhere along the line, maybe your written comments, you can suggest what we should add. Thank you.

India, please.


India [1:30:54]:

Thank you, Koleed. India does have certain issues with regard to the text that exists, that is now there. At some point, this text used to read— the first paragraph of this article used to read, the state parties agree that all jurisdictions in which value is created, markets are located, revenues are generated, or economic activities take place, and went on to say. Now it appears that the phrase economic activity occurs has been dropped off somewhere down the line. Now I think any article that we would draft, it should do 2 things. One is that it should make very clear what the objective is. And then propose, at least at high level, as to how do we intend to get there. Now, with the loss of the phrase economic activity occurs, which was there earlier, probably that anchor that we had for taxing rights being allocated to a source jurisdiction, that seems to have been lost. So we would we would request that this reference to economic activity occurring be restored to this article. The second point is that this is something on the lines of what the distinguished delegate of Czechia had mentioned, that it reads that where value is created, markets are located, revenues are generated, and users are located. Now, it appears that with the use of the word and. All this is creating a cumulative condition. So I think this is also something that needs to be looked at, whether we need— I think we need to replace and with or, because or was the word used earlier. And so this is what some of our problems with paragraph 1. Paragraph 2 now just reads that the state party shall Will India explore and pursue cooperative approaches to support the fair allocation of taxing rights with a view to reduce risks of double taxation and non-taxation? Now, the point here again is that how do we propose to do it? We should indicate as to whether we propose to do this through domestic measures, protocols, or whatever appropriate nexus and allocation rules. So I think the reference in broad terms to these methods by which we propose to do this, this needs to be there because right now it all appears somewhat unclear. So these are our immediate concerns. Thank you.


Co-Lead · Daniel [1:33:46]:

Thank you. Azerbaijan, please.


Azerbaijan [1:33:51]:

Thank you very much. With regard to Article 5, Azerbaijan supports a fair allocation of taxing rights that reflects genuine economic activity and economic contribution of each jurisdiction. At the same time, we suggest that the concept of value creation, market location, users, and data should be applied on the basis of clear, objective, and administrable criteria. Their application should not result in overlapping taxing rights, excessive complexity, and increased tax disputes. Azerbaijan also considers that allocation of taxing rights should take into account the interest of source and market jurisdiction, particularly developing countries, while preserving tax certainty and avoiding post-double taxation and non-taxation. We further suggest adding explicit reference to effective dispute prevention and resolution mechanisms. Cooperative approach under paragraph 2 should include clear rules on coordination between jurisdictions and timely resolution of disputes. Finally, we support the recognition that physical presence should not be sole basis for allocating taxing rights in modern business models. However, any nexus or allocation rule should be based on clearly defined thresholds, economic substance, and measurable indicators, and should be capable of consistent implementation by tax administration with a different level of capacity. Thank you very much.


Co-Lead · Daniel [1:35:27]:

Thank you. Luxembourg, please.


Luxembourg [1:35:32]:

Thank you, co-lead. So on that point, we would like to echo Czechia and other member states. Indeed, we are afraid that if we have several nexuses next to one another, it will create some uncertainty. Also, we believe that such an article should be written within a clear technical framework in order to favor legal certainty and investment. And also, the new addition, taking into account such other factors that may become relevant as business models evolve, we feel like it's open-ended and it creates significant legal uncertainty to the scope of the article. So these are the elements we have preliminarily.


Co-Lead · Daniel [1:36:18]:

Thank you so much.

Thank you. Peru, please.


Peru [1:36:27]:

Muchas gracias. Thank you very much, co-lead. This being my first intervention, allow me to thank you, the chair, the bureau, Thank you for preparing and presenting this draft. As regards Article 5, Peru understands that this is one of the key provisions of the Framework Convention. It will provide the conceptual basis for the development of the Protocol on Cross-Border Services. Our The delegation notes that the current wording seems to be less categorical than the versions that we've read in previous versions of the article. However, there are a number of things that we want to consider here. First, the reference to jurisdictions where the value is created. This includes markets where revenues are generated, users or data are located, and we believe that it is useful to refer to other factors that may be relevant in accordance with how the trade models evolve. We also see as useful the reference to taxing rights being mentioned even when there is no physical presence in the jurisdiction. This is a crucial element in an increasingly digitalized economy. Where there may be economic participation that is really significant without any physical presence in a given jurisdiction. Also, as regards what India mentioned, we would welcome clarification as regards the use of the term and in terms of the different connections. The different factors should operate as an alternative. Alternative rather than being cumulative, and this would limit the possibility of having differentiated connections depending on the type of revenue. It would limit revenue to those which taxing rights can be granted in the jurisdiction when they are recognized as the source country. We'd also like to propose some wording that would cover the more categorical aspects of previous wording where the agreement was given to attribute taxing rights to jurisdictions where one of the connecting factors is present and preserving the incorporated connecting factors that are not cumulative, the reference to changes in business models and the express mention of taxing rights for remote services when one of the connecting— agreed connecting factors is present. And so, my conclusion, we support the proposal made by India to replace or with and in the 3rd line of paragraph 5.1, and also the inclusion in inverted commas of the state parties agree that at the beginning of that paragraph, and also we propose also the retention of and taking into account of other factors. Thank you.


Co-Lead · Daniel [1:39:58]:

Thank you. Russian Federation, please.


Russian Federation [1:40:05]:

Thank you, Chair.

We've moved on to one of the key articles of our convention. We see that the wording of the provisions of this article keeps evolving, keeps developing. We're seeing new provisions emerge. New ideas from the point of view of what we believe and how we think we should reflect the concept of a fair allocation of taxing rights. So we support this work and we'll keep actively participating in it going forward. In terms of the wording of this article, We'd like to draw attention to paragraph 2 and the text contained therein, because here at this meeting of the 5th session, it's— we're seeing this text for the first time. So what would we like to draw attention towards? When this work is finished and the text of the Convention is translated into the 6 official languages, including my native language, Russian. The way that I read the English text in translation into Russian, it sounds as though supporting fair allocation of taxing rights with a goal to reducing risks of double taxation and non-taxation It seems to us that a just, a fair allocation of taxing rights does not seek to avoid double taxation or non-taxation. The purpose of the fair allocation of taxing rights between countries lies somewhat elsewhere, so we would propose thinking about this text further because for us it is not clear or evident that the fair allocation of taxing rights has a goal of taxation or non-taxation in general. Thank you.


Co-Lead · Daniel [1:42:36]:

Thank you. Germany, please.


Germany [1:42:42]:

Thank you, Mr. Co-Lead. Germany appreciates the effort of the Secretariat and the co-leads to address with the draft Prima Convention as a whole some concerns that were raised by member states. While the latest modifications show some improvements, these changes do not sufficiently address our principal concerns. And the same applies to the draft of Article 5. We acknowledge that the revised drafting no longer directly provides that jurisdictions in which revenues are generated automatically have taxing rights and no longer expressly requires renegotiation of existing tax treaties with the article itself— excuse me, within the article itself. These changes represent an improvement compared to earlier drafts. However, significant concerns remain on our side. Paragraph 1 continues to formulate, formulate a legal principle for allocating taxing rights that lacks sufficient precision and introduces concepts whose legal meaning remains unclear, including references to markets, revenues, users, and data, while also referring to factors that may become relevant in the future. Such wording creates considerable legal uncertainty and bears the risk of supporting interpretation that departs substantially from internationally accepted principles. Germany supports the principle that taxing rights should reflect genuine economic activity measured by value creation and is open to work on solutions that take into account today's economic realities. However, any formulation should clearly recognize internationally established establish allocation principles and avoid creating new substantive allocation rules within the Framework Convention itself. Paragraph 2 should remain clearly limited to cooperation and dialogue. I thank you.


Co-Lead · Daniel [1:44:50]:

Thank you. United Kingdom.


United Kingdom of Great Britain and Northern Ireland [1:44:56]:

My colleague from Germany has just said much of what I wanted to say, and we certainly echo a lot of the points that he made, but I will nonetheless say them again for posterity and just to be clear on the UK position. So I think we've previously noted our concerns around the principle enshrined in this article that all jurisdictions in which a business generates revenue or has customers should have a right to tax a portion of that business's profit. We do not think that the legal basis for allocating taxing rights can be stated in a single sentence, particularly where it departs substantially from for the current basis of allocating taxing rights. While we think there is a case for considering greater market allocation of taxing rights over the profits of the largest and most profitable MNEs, particularly those providing digital services, we remain very concerned about the convention recognizing a market-based taxing right in such high-level, generalized, and unqualified terms. The current drafting lacks specificity but appears to award taxing rights to market jurisdictions without sufficient qualification or explanation of what that recognition would mean in practice, including how priority would be adjudicated between the different nexuses or how taxing rights would be allocated where more than one jurisdiction claims a right to tax the same income. And I think it is disappointing to us that our interventions and interventions of wider states, not just in this session but in previous sessions, have not been taken on in regard to this fundamental principle, and the direction of travel on this article remains concerning to us. Finally, we would like to request an explanation of how Article 5 should be understood alongside Article 21 and existing bilateral and multilateral tax instruments. If the convention is to impose legal obligations on parties, it is essential both that states have a clear understanding of what those obligations mean in practice and that there is clarity about the intended relationship between those obligations and existing legal instruments, both treaties and domestic law. Thank you very much.


Co-Lead · Daniel [1:46:49]:

Thank you. Belgium, please.


Belgium [1:46:52]:

Thank you. We would like to echo what previous speakers from the UK and Germany said. We are particular— we are— we do appreciate that the tax treaty negotiation or obligation is not in Article 5 anymore, but we are still concerned by the cumulative use of the concept of value creation, market jurisdictions, user location, data location, the absence of physical presence. But the concepts are not defined or ranked. And it's— therefore there is not sufficient legal standard for us for the implementation afterwards. And also the specific reference to such other factors that may become relevant as business models evolve. This is an open-ended obligation. And the future content is not sufficiently clear to us, and this wording is incompatible for Belgium with the objective of legal certainty, which is— or the certainty which is already in the objectives in Article 1 of the Framework Convention. So the fact is that we, on the basis of this Article 5, we would be unable to determine at the time of ratification the future scope of the commitments resulting specifically from this Article 5. And such an approach departs from fundamental principles of treaty law, which require treaty obligations to be sufficiently foreseeable and clearly identifiable. So we are specifically also concerned on this other factors that may become relevant, because who is going to assess this? I would presume this would be assessed then by the Conference of the Parties. I would appreciate if this could be clarified also. Thank you.


Co-Lead · Daniel [1:48:46]:

Thank you. Etele, please.


Italy [1:48:49]:

Thank you, Chair. Not surprisingly— sorry, we are on the same page as the previous speakers. Are. We also recognize the progress in the drafting of this new text. We like the reference to the economic contribution of the business. We like the fact that there is no more reference to the renegotiation of treaties. We also like the cooperative approach that has been mentioned in paragraph 2. Although some of the doubt remains on how to realize that issue, but we still have the concern that the other expressed, and we had the possibility to comment many times and also to put in our written comments. For us, the notion that are included in paragraph 1 should be interpreted in a common understanding, and we, on the contrary, see that there is a big indeterminacy. A framework convention should establish principle rather than create open and legal basis for new substantive obligations which are put in a messy way. In our view, there are still questions on how problematic link between Article 5 and Protocol 1 despite the optionality of the Protocol. We think that Article 5 should be limited to assume the policy objective, while more detailed nexus rules should be included in Protocol 1 or in another instrument and properly defined. We therefore can't concur in the text of Article 1 because we still think Thank you. We think that, like the others said, create uncertainty, which is not what business wanted, and we would like to once again reiterate the necessity for having a shared interpretation of the term used, not only definition but an interpretative guidance of terms like value creation ease and the other terms that are used in this paragraph. So again, on our side, the concerns remain and most work must be done on that. Thank you.


Co-Lead [1:51:15]:

Thank you. Switzerland, please.


Switzerland [1:51:20]:

Many thanks, Mr. Cowlett, for putting forward a further proposal for this crucial provision of the Framework Convention. We appreciate its high-level language and the fact that it includes an open-end list of potential criteria to be considered, with also the possibility of a dynamic adaptation to involved business models. We observe that the key element for the allocation is new language, and we are uncertain regarding its meaning. We ask in relation to what total the economic contribution of a jurisdiction should be taken into account? Is it economic performance indicators of countries such as GDP or GDP per capita? Being a tax person, I know that obviously this is not the intention, but it still is a possible interpretation. We therefore ask to clarify in relation to what total the economic contribution should be relevant. And furthermore, we do not see any added value in the word real before economic contribution, and we propose to delete this. In general, it would, according to our view, be better to use established language where a common understanding exists and has been tested over time. Examples for such language can be found in the Sevilla outcome document or also the UN General Assembly Resolution 78/230. In comparison to the present proposal, those documents also mention economic activity as an important feature. We believe that economic activity should be retained as one of the decisive elements. Finally, in respect of paragraph 2, we note that the language of reducing the risk of double taxation seems too soft in our view. The goal should be the elimination of double taxation and we would like to recall that the need to allocate taxing rights comes from the goal to avoid double taxation and is interconnected with the latter. If the goal is not the elimination of double taxation, no allocation of taxing rights is needed. This should in our view be reflected Thank you.


Co-Lead [1:53:50]:

Thank you. Zambia, please.


Zambia · Africa Group [1:53:57]:

Thank you, Chair, and thank you for the text for Article 5 as presented. Speaking on behalf of the Africa Group, when we look at the text, compared to the previous discussions we've had, we find this text as weakening and missing out some of the key elements that we had proposed to be included in Article 5. In our view, Article 5 should be robust and should also provide a clear statement of the principles that cover the key triggers for jurisdictions to be able to tax, and those key triggers will be a basis for the allocation of taxing rights. So we note that in paragraph 1, economic activities is now missing. I think the issue, like India pointed out, I think the issue of the wording for the use of the word and, I think To provide certainty, I think there's an issue that the triggers should be looked at independently and therefore replace the word and with or. We also look at paragraph 2 as being too soft and not really providing a commitment where we are saying that member states should explore and pursue cooperative approaches. I think this is not really providing a commitment for member states in ensuring that fair allocation of taxing rights is achieved and also that double taxation or multiple taxation or non-taxation are dealt with. So therefore, from the Africa Group, we shall be resubmitting the text that we had submitted as written comments on this article in March, which had 3 paragraphs. We note that most of the triggers are there in terms of paragraph 1, but one of the key triggers, economic activities, is missing out. And as India indicated, I think in the text that we had proposed that we shall be resubmitting, our paragraph 3 was quite categorical in providing a commitment on measures that member states will be required to adopt to ensure fair allocation of taxing rights, and some of the measures in that paragraph had been elaborated, such as taking steps in terms of changing domestic measures to ensure that there's fair allocation of taxing rights, appropriate protocols as the case may be. We also had coordination of rules and efforts to minimize chances of overtaxation and nontaxation. As you know, this issue that we are talking about should be agile and should respond to future needs and taxation of countries, and therefore it would be very important for coordination of rules and efforts to minimize chances of overtaxation and nontaxation. There was also an issue of how do we deal with interpretation and application where necessary, even an issue of renegotiation of existing tax treaties. And therefore, colleagues and member states, whilst we appreciate the work done in the current article, it does not fully meet what we envisaged to have in this article, noting that Article 5 is a very crucial article in terms of fair allocation of taxing rights, and it's at the core of what we are doing in terms of these negotiations. And therefore, from our perspective, we reiterate that it should be robust, but it should also be clear in terms of the statement of principles, the various factors or nexus rules that we need to take into account for member states to have that right to tax as per jurisdictions, but also in terms of the guidance that are needed in terms of elaborating those factors in allocating taxing right, we may not have to leave it to member states to decide how to have achieved fair allocation of taxing right, and therefore that paragraph 3 becomes clear in terms of the commitment by member states that they need to take to ensure that we achieve fair allocation of taxing right, I submit. Thank you.


Co-Lead [1:58:37]:

Portugal, please.


Portugal [1:58:42]:

Thank you. As it's the first time that in this session I address to you, I'd like to thank the Chair, the Secretariat, and the co-lead for all the effort put on this convention, on this draft. And, um, I would also— would like to echo what some of the esteemed delegates said here. For example, uh, Shekia, regarding the, the nexus, the, the way it is established with— and the concerns that we have. Or, uh, for example, Luxembourg, Belgium, that also Italy, that said that the, the way that it is now written, this article, because it has— we recognize it has improved. We recognize that, but we still have some concerns, and that creates risks creating an open-ended legal basis for future substantive obligations. But my concern when I read this and I don't know if it is just me, because I went to read Article 5, and now we have a whole convention combining it with Article 21, number 3 and number 4, and I'm not going to discuss that article now, but my concern is the way that is written now, Article 5 combined with this other article, disabilitates a state to ask for a renegotiation of a treaty? That I would like some clarification, because tax certainty is very important and to reduce disputes. And in a constructive spirit, I suggest maybe you could look, as the esteemed delegates from Switzerland said for the commitment of Sevilla, like 28E, that could be a good starting point to achieve that tax certainty. Thank you.


Co-Lead · Daniel [2:01:04]:

Right, thank you. France, please. Thank you.


France [2:01:13]:

Mr. Kohlied, we have come to a central article in the convention, one that contains certain difficulties, because while most states— all states, in fact, agree that we need to have a fair allocation of taxing rights, it is also certain that each and every state has a different concept of what this fair allocation involves. And this disagreement is translated into a text which is highly problematic for us because it creates legal uncertainty. It multiplies the nexuses and concepts that are poorly defined or undefined, which from a legal standpoint is worrying. It also contains certain uncertainties related to its legal scope and value, which are not clear even when reading this article together with what we see in the provisions later on that is meant to clarify this. And all of these uncertainties together make it necessary, as the UK delegate has stressed before us, to work to further clarify the scope of this article so that we can perhaps uncover some consensus on this, given that this is a key article on which consensus is essential. And I'll conclude with a briefer point on the second part of the article. As Switzerland has said, the allocation of taxing rights— Take it easy. Born from the desire to eliminate double taxation, and so we think the language in that sense should be strengthened. Thank you.


Co-Lead · Daniel [2:03:08]:

Noe, please.


Norway [2:03:09]:

Thank you, Mr. Collier, and thank you for the draft proposal for this very important article. I think at the outset we just note that this article now focuses focuses solely on business taxation and seems a little bit odd if we are taking a holistic approach, but it seems to be the direction that there is some agreement on. We, like Switzerland and now France, explained the need to allocate taxing rights stems from a wish to eliminate double taxation, and there is a link between allocation of taxing rights and elimination of double taxation, and for that matter, preventing non-taxation. And I think this should guide our discussions on this article. So we maintain that the article must be more balanced and include principles both relating to the source and the resident states. The current text overly focuses on source state taxation, and to that end, we maintain the proposal that Norway and Sweden have put forward previously. However, working on the current text, we have some editing suggestions. In the beginning of paragraph Paragraph 1, we suggest that in order to take into account the broad range of circumstances that this provision is intended to apply to, instead of reading shall reflect, the start of the paragraph could read shall take into account as appropriate. This wording gives more flexibility to take into account the characteristics in different business models without prescribing specific specific factors as relevant in all circumstances, and it could also address some of the concerns that have been made here today on the potential for multiple taxation that exists in the current wording that lists factors. We note that jurisdictions as such do not make economic contributions, and the wording on this, if taken forward, should probably read economic contributions in each jurisdiction. We would also support reinstating the term economic activity, which we find is very relevant here in this article. The formulation end users or data are located can be covered by the phrase value is created, markets are located, and revenues are generated. Generated and is therefore superfluous and too specific here in this kind of more high-level commitment. However, we do note that the term revenues are generated carries risk of manipulation and therefore profit shifting that are well known in the existing tax cooperation, and we think that we should reflect reflect more on how this part is expressed going forward. We would prefer to delete the formulation whether or not such activities involve physical presence in a jurisdiction, as physical presence continues to be a relevant factor in taxation. Our suggestion to include as appropriate at the start of the paragraph will covered the situation where physical presence may no longer for some reason be relevant. We look positively towards paragraph 2, but we underline that the main purpose of allocating taxing rights between states is to avoid double taxation. And as drafted, it would seem, as I have highlighted before, that paragraph 1 increases risk of double and multiple taxation, and we I think that going forward we should really make sure that these risks are eliminated. Thank you.


Co-Lead · Daniel [2:07:24]:

Thank you. Israel, please.


Israel [2:07:29]:

Thank you, Chair. We would like to align ourselves to echo Czechia and Germany, UK, and other delegates that talked before us. We think that other factors may become relevant. It makes— it may make a problem in how we allocate the taxation rights if it's not written clearly. Clear enough. We're talking on— there is no hierarchy here, and since the article addresses a fair allocation, so we think that— of taxing rights, we think that residency should also be reflected. We think that— we agree that the text as currently drafted may give rise to some ambiguity on how to implement, how to make this work. Thank you.


Co-Lead · Daniel [2:08:49]:

All right, thank you. Brazil, please.


Brazil [2:08:59]:

Thank you, Khalid. I particularly have a different view on this article. It has some elements of principles in it, and it has some elements of goals or commitments of a broad nature. Different work streams or different focal groups how to balance and how to weight those factors. This list was not designed to be exclusive. It was not to be a limit— limitative list. It should be open-ended. The goal that we wanted to do here was to send a message that we strive therefore, we will look for a more balanced allocation of taxing rights in specific cases. And then we might come with different arguments, the problem with the digital economy, for instance, or taxation of services, whether it would be necessary to have a PE, and so on. That was the underlying idea behind it. Then should we have, in this context, a more specific word, or should we start to discussing here how to define those words, how to define value creation. I don't think that's the moment or the scope of what we intend to do here. The goal, again, once again, is to send a message that we strive for, we will look for a fairer or more balanced allocation of taxing rights, and we will define or we will identify what has been an unbalanced allocation of taxing rights specific cases. There are commitments in other parts of the Convention to look for how to implement, how to review treaties if necessary. There are commitments connected to this one on transparency and monitoring and review. On the issue of using or or and, it's a bit complicated because there are 2 types of or as well. So there are an inclusive or and exclusive or in Boolean logic. I mean, someone is recognizing that. So in legal drafting, you can use 2 types of or. One is when one of the conditions is valid, the or is valid, or— Or. Only one of the conditions has to be valid for the whole sentence to be valid. So I'm not sure that changing to or would help us there. And a final comment is we have over and over said that there is no immediate effect from the convention in itself. So this provision will not have a direct effect on treaties or other texts. It is just a guiding direction for our future work. I don't see the room for the uncertainty that some delegates have argued. because of that, because the treaties have to be read in its entirety, and in other parts of the Convention it's mentioned that the other obligations will be maintained or will not be affected directly or immediately by this Framework Convention.


Co-Lead · Daniel [2:13:08]:

Thank you.

All right, thank you. Estonia, please.


Estonia [2:13:18]:

Thank you. I support the interventions of the EU member states that have spoken before me, and also UK, Switzerland, Norway, and Israel. To be a bit more specific, I think it would be a good idea to put a full stop after the word of each relevant jurisdiction, because what follows is a non-exhaustive list. And it does seem to be making things more complicated and create legal uncertainty. Everything we wish to specify, we can do so within a protocol. Also, Switzerland's proposal to delete the word real in front of the word economic makes a lot of sense because otherwise we inevitably have questions, what is an unreal economic either contribution or activity, that indeed would be a preferred word in this context. Also, I think what Switzerland and Norway explained regarding the connection between the allocation of taxing rights and the avoidance of double taxation makes a lot of sense. So there should be a stronger obligation to avoid double taxation. Regarding the taxes covered, the framework— the draft of the Framework Convention has been drafted in a manner that it often doesn't expressly say which taxes should be covered, except for article on exchange of information, where we say expressly that it applies to taxes of every kind of The rest of the articles are rather vague, which seems to suggest that the whole convention should apply to all kinds of taxes that are applied in a state party or member state. However, Article 5 seems to be, at least for now, referring to the corporate income tax. Or taxes on business. I suggest we make this clear. There are different options on how to do it. We could specify somewhere in the Framework Convention that it is indeed supposed to apply to taxes of every kind and description, and then make it clear in certain articles where we don't intend to cover all the taxes. Thank you.


Co-Lead · Daniel [2:15:53]:

Thank you. Spain, please.


Spain [2:16:01]:

Good afternoon, everyone. I take the floor for the first time, and I would also like to express our thanks for the efforts by the Chair and the Secretariat to draft this text of the Future Framework Convention. Many of the things that I will say have already been said by my colleagues. Preliminarily, I would like to indicate that we see this Framework Convention as, as a high-level instrument whose purposes and principles should be high-level accordingly. And this one seems prescriptive to us. In terms of the specifics, we can see that it attempts to define what is meant by a fair allocation, and there is a series of nexuses that are listed for that purpose without any definition, as my colleagues have indicated. Multiple nexuses are being established for one single taxable event, and the result is a text that requires clarification, and many things will depend on the facts and the circumstances of each individual case. Therefore, we believe that this is problematic in its current form. We also think that some— there are certain key aspects that need to be taken into account. This attribution of rights will affect trade, the promotion of investments. Also, Like Norway said, we see that there's a lack of balance between the nexuses and the source states and the resident states. As the UK has said as well, we are also concerned because this could function as an autonomous norm or standard of attribution within— with— in relation to other instruments, and that relationship seems unclear to us and would be good to clarify. And to conclude, I think this article should be reworded into a more general, non-prescriptive principle, and it— the corresponding protocol could then establish the nexuses and additional details.


Co-Lead · Daniel [2:19:08]:

Thank you. United Arab Emirates, please.


United Arab Emirates [2:19:15]:

Thank you, Khalid. The UAE notes that the use of multiple allocation factors may create risk of overlapping taxing rights, potentially resulting in double or even multiple taxation. To avoid such outcomes, clearer articulation of the intended effects and definition of key terms is needed. Thank you.


Co-Lead · Daniel [2:19:40]:

Thank you. Saudi Arabia, please.


Saudi Arabia [2:19:46]:

Thank you, Mr. Cowled. Building on what previous delegates have pointed out regarding Article 5, Saudi Arabia shares similar considerations regarding the text. First, concerning the list of nexus criteria in paragraph 1, we support the use of or rather than and. In addition, regarding the second paragraph, in the mention of reducing the risks of double taxation and non-taxation, we find this language unclear and need further consideration, or instead this matter could be addressed at the protocol level. To give it further details rather than generalized in the framework convention. Thank you.


Co-Lead · Daniel [2:20:29]:

Thank you. Japan, please.


Japan [2:20:33]:

Thank you, colleague. Since I missed the opportunity to express our views on Article 2 principles, I would first like to refer to 2 principles that Japan considers fundamental and that are also relevant to this article. Can I— okay. One, promoting trade and investment and thereby contributing to the growth of each state, and 2, eliminating double taxation and non-taxation. Turning to Article 5, a physical presence has been a key factor in determining the nexus, and we believe this continues to be a principle. If multiple factors, as in the draft, are treated equally, it becomes unclear which factor should serve as the nexus for allocating the taxing right, creating uncertainty and a risk of broad double or multiple taxation. As there are various different opinions regarding nexus, we suggest to ensure broader participation, This provision should not be specified in detail but should maintain a high-level language aligning with the CBO commitment. Thank you.


Co-Lead · Daniel [2:21:49]:

Thank you. Austria, please.


Austria [2:21:55]:

Thank you. We would like to state that Austria is of the opinion that the commitments contained within the Framework Convention should be drafted to provide guidance and structure and the frame— and they frame and scope the direction of our collective efforts. Austria is of the opinion that the drafting of Article 5 has improved insofar as we now understand it to better reflect the desire to provide for a high-level provision guiding States Parties in implementing fair allocation of rules, taking into account the different types of nexus through tax treaties or rather in instruments. However, the current drafting proposal is exclusively pointing towards source or market taxation without mentioning residence taxation as a concept. We therefore suggest adding a reference to residence taxation for a balanced reflection of all possible or sufficiently possible nexus factors. We'd also like to echo Czechia in highlighting the risk of including the open open-ended reference as now reflected in the wording, which could potentially decrease legal certainty of the Framework Convention as a whole. While we agree that the Framework Convention has to provide flexibility, we think that more substantive details should be left to be addressed in protocols. We would also like to echo the interventions by the delegates of Germany, the UK, Belgium, and Norway. Thank you.


Co-Lead · Daniel [2:23:21]:

Thank you. Audier, please.


Speaker 123 [2:23:28]:

Merci, Monsieur le Président. Thank you, Chair. We would like to begin by supporting the statement made by Zambia on behalf of the African Group, and in our national capacity, we would like to add a few elements as well regarding this article, which It's a major article of this convention. It is one that will allow to act on— as this process evolved. And in this new wording, it seems to us that there's a weakening of the language because certain binding rights have been eliminated. We went from Wording where we say that jurisdictions where value is created or economic activities take place have the right to tax. We've changed to the wording that we have now reflecting economic contribution. This seems weaker language to us. The deletion of the notion or the renegotiation of conventions in this new version deprives developing countries of a valuable tool to rebalance their taxation systems, and the lack of such a mechanism would sustain bilateral conventions that are often Unbalanced, the recognition of this principle remains largely declarative, and it accentuates current asymmetries. In paragraph two, we have language that says explore instead of take the necessary measures. Which is what the previous version said. So it has reduced the binding scope of this article. This article, combined with Article 21, retains certain asymmetries in the international taxation system. Regarding the nexus factors, we echo what was said by colleagues such as India in particular. They are now linked together as and instead of or, so it could be reinterpreted in such a way that all these factors need to be present to establish a nexus. And finally, a response to the issue of fair allocation, which is closely tied to the issue of States having the necessary resources for sustainable development, and the elimination of double taxation will allow to reduce the tax burden, uh, on taxpayers when it comes to cross-border transactions. So mechanisms that eliminate double taxation must be provided for in a way that is in line with the new rules that are being proposed. in Article 5. Thank you, Mr. Chairman.


Co-Lead · Daniel [2:26:59]:

Thank you. Singapore, please.


Singapore [2:27:05]:

Thank you, co-lead, for the opportunity to speak, and thank you for the revised draft. I would like to echo some comments made by members that have gone ahead before us— Switzerland, France, Norway, Estonia, Japan. We remain concerned that Article 5 continues to list multiple nexus factors in a way that suggests that they are mutually exclusive, and the lack of hierarchy also creates significant uncertainty for businesses and tax administrators on how this can be operationalised. We recognise that business models will evolve over time, but whether the additional nexus factors cited in this article contribute to value creation is scenario-specific, and probably should not be generalized. A good example is a sale of goods where the physical presence of a buyer in a jurisdiction does not automatically imply value creation there, so we do have to keep that in mind. So accordingly, our view is that value creation for the Framework Convention provides a sufficient and sound economic basis for how profits should be taxed, and this is similar to agreed language such as that in the Sevilla Agreement. like Switzerland and Estonia. So we would like to propose some edits. So the term real before economic contribution could possibly be dropped to minimize uncertainty. And taking into consideration what I mentioned earlier, we could also potentially drop the terms market allocated revenues all the way to data allocated. And if the issue is evolving business models, we can keep taking into account such other factors that may become relevant as business models evolve, and then protocols can be developed to address specific scenarios that we want to deal with. On Article 5, we suggest building on preamble language in the OECD and the UN Model Tax Convention, which forms part of the tax conventions that deal with allocation of taxing rights and we're all very familiar with. So to mentioned that the state parties shall explore and pursue cooperative approaches to support the fair allocation of taxing rights, with a view of reducing the risk of double taxation and without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance. Thank you.


Co-Lead · Daniel [2:29:22]:

Thank you. Colombia, please.


Colombia [2:29:29]:

Thank you, co-lead. We have some questions. A number of delegations have referred to concerns or questions that may arise from the current wording, and they've expressed this in terms of a lack of legal certainty. And so we'd like to know First, what is the nature of this list of factors? Is this a taxative list? Is it a list of examples? Is it an open list? Is it a closed list? That is the first question we have. The second question comes on top of the previous one and is linked to the preposition that is going to be used. Are we going to use and or or the conjunction? We don't. It's not the same as relating to cumulative factors and disjunctive factors. That would be just clearly different in terms of legal certainty, and so we want to know whether there has been a. provision precisely because of the questions that have been raised in this regard and taking into account that in the current wording of Article 3 definitions there is some placeholder text there. And we would like to know whether these items listed there— value, market revenue, etc.— are these the definitions that would be included in Article 3. And so lastly, a question: instead of as business models evolve in the first article, as economic activities evolve would be better than as business models. We believe that that would be a more comprehensive sort of wording to use. Thank you.


Co-Lead · Daniel [2:31:34]:

Thank you. And I believe the questions that were raised go to all of us, not just the co-leads, since we all in one way or the other contributed to what has come out. Senegal, please.


Senegal [2:31:57]:

Thank you, Chair. I will begin by supporting the proposals made by the African Group, specifically by Zambia on behalf of the African Group. I think that Article 5 is a fundamental article in the convention. One of the issues raised by international taxation is, of course, complexity, hence the need to have clear language that can guarantee Tax certainty or legal certainty that has been mentioned or referenced by a number of colleagues. One of the terms in this article, real economic contribution, is problematic in this regard because this is necessarily going to force us to characterize this, and so, and this goes against a legal certainty. In taxation. The other issue we need to understand is that the real economy is an economic notion, and this necessarily does not service taxation. When we talk about the real economy, we're not talking about the speculative financial spheres such as derivatives, and yet in taxation such things are taken into account. And so this term I find problematic, hence the need to refer rather to economic activity, which is more comprehensive, broader, and could be better taken into account in this convention, whether— where value is created or where wealth follows or whether it's created by the market. That is the first issue I wanted to raise. The second question I have would— relates to these factors that are listed. These factors should not be considered cumulative factors, and therefore it is necessary to have an exclusion mechanism to better facilitate understanding in this regard. Also on Article 5, this article must rest on foundations. It doesn't go into the modalities of taxation. We are still in the foundations. And so when we're talking about the foundations, it is all of the factors that contribute to economic activity and that contribute to value creation are relevant here, and they should be taken into account here, whether it is digital or physical. The important thing is that value is created there. The important thing is that there is economic activity in that jurisdiction, and the jurisdiction in question must have taxing rights. That is the purpose. The other point that was raised, as we said, modalities evolve over time, and we may need alternative or other instruments, including domestic ones, but we're not there yet. There's also the point of the privilege granted to the source country compared to the country of residency. It doesn't seem to me that there is any privilege being granted here. All depend— everything depends on your position. If you are— if it's a question of standard residency where you benefit from services, so then you become a source country, and that provision is therefore open in that regard and applies to everyone. And I think it is that openness which means— Thank you. That Article— that's the second part of Article 5 becomes relevant. It needs to be consolidated, and this relates to all revenue in potentially numerous jurisdictions. And so there we are talking here about an additional right that is granted to the source country, and to avoid this double taxation, there needs to be a provision for that, and that is what the second part seeks to do. Thank you.


Co-Lead · Daniel [2:36:05]:

Thank you. China, please.


China [2:36:09]:

Thank you. We appreciate the work of the colleague and the Secretariat in providing the updated draft of Article 5. We'd like to echo some viewpoints from India, Singapore. For the first paragraph, compared with the version we discussed in the February session. The nexus factor of economic activities has been removed, and while that users and data has been included, we'd like to highlight that economic activities occurrence is the most traditional and fundamental factor for determining the sourcing rule and should therefore be added back. In our view, the 2 nexus factors, economic activities occurrence and value creation, are appropriately high-level and future-proof and sufficiently broad in scope to encompass the distinct productive characteristics of both traditional and emerging business models. We welcome its inclusion. We support cooperation aimed at enhancing a fair allocation of taxing rights. At the same time, we have consistently expressed our concern that if multiple different nexus factors and corresponding sourcing rules are applied to capture the same income for the same taxpayer, there is a significant significant risk of unintended and unrelieved double or multiple taxation. Accordingly, overly aggressive new taxation rules should be avoided in order to prevent double or multiple taxation arising from the application of various rules. That aside, we do support to include measures of reducing risks of double taxation in the second paragraph. Thank you.


Co-Lead · Daniel [2:38:17]:

Thank you. Republic of Korea, please. Microphone to Republic of Korea.


Republic of Korea [2:38:42]:

Thank you, Colette, for giving me the floor. With respect to Article 5 on the fair allocation of taxing rights, Korea supports the objective of achieving a balanced allocation of taxing rights. Having said that, Korea aligns with the several concerns regarding the current draft. First, we recognize that the current draft continues to place particular emphasis, emphasis on source-based taxing rights. We believe that it is equally important to ensure an appropriate balance with the taxing rights of the residence jurisdiction. In this regard, we align with the statement made by Austria and Norway. Second, we align with Czechia, Germany, Belgium, and UK that greater clarity would be helpful regarding the scope and application of the connecting factors in paragraph 1. As currently drafted, the provision may result in the accumulation of multiple nexus without sufficient guidance on how taxing rights should be allocated in such circumstances. We are concerned that this may create legal uncertainty, reduce predictability in the allocation of taxing rights. Thank you very much.


Co-Lead · Daniel [2:40:16]:

All right, thank you. Denmark, please.


Denmark [2:40:21]:

Thank you, Mr. Co-Lead, for giving me the floor. As it is the first time that I speak today, I want to express my appreciation to the work done by the Secretariat and the Co-Leads in this work stream and in all the work streams. We also view Article 5 as the heart of the Convention, and we do appreciate Brazil's explanation of how this article could be understood and the fact that it's not creating any immediate changes. However, we do align ourselves with the majority of states, explicitly European states and the UK and Norway, Singapore, and also China, who has expressed a concern that this can be viewed as creating an unintentional scenario of double taxation when you have multiple nexuses which can be triggered at the same income. So we do believe, as this is the heart of the convention, that we should be very careful when we draft And hence, we also believe that there is a need to find another wording, and we do appreciate that we collectively endeavour that exercise. And with that, I will thank you for giving me the floor.


Co-Lead · Daniel [2:41:27]:

All right, thank you. Sweden, please.


Sweden [2:41:32]:

Thank you for the opportunity to speak. We appreciate the efforts of the co-lead to update the article. And as mentioned by Denmark, we more or less echo some of the previous speakers. For example, Denmark, China, Singapore, Estonia, Norway, UK, and Italy. We do find that the updated article is a little bit too far-reaching when it comes to the factors, including the other uncertain allocation factors that may be relevant in the future. We believe that the well-recognized concepts such as economic activity and value creation that has also been mentioned by previous speakers should have a more central role. We do also believe that the fundamental concept of physical presence should get more recognition. As mentioned already by us during previous sessions and as raised by Norway, we of course maintain the proposal we proposed jointly during last session, which builds on paragraph 28 of the Sevilla Commitment, which several others have also mentioned today. Thank you.


Co-Lead · Daniel [2:42:55]:

Thank you. We now have Ireland.


Ireland [2:43:01]:

Thank you, Mr.

Co-Lead, and to the Secretariat for the updated article.

We appreciate the efforts that went into the redraft, and we appreciate that the text requiring the tax treaty renegotiation has been removed from the article. Ireland would like to echo the views of the EU member states who previously spoke on this article, as well as Norway, Switzerland, Israel, and the UK. We agree that the current article creates significant legal uncertainty and risks overlapping taxing rights. Any new allocation factors should be considered, if appropriate, through future protocols adopted by consensus rather than through an open-ended interpretation of the Framework Convention itself. This preserves flexibility while ensuring predictability for states and taxpayers and maintains consistency with the existing international tax framework. Finally, I would like to echo the point raised by Switzerland and others on strengthening paragraph 2. Thank you.


Co-Lead · Daniel [2:43:51]:

Thank you. Thank you. Finland, please.


Finland [2:43:59]:

Thank you, Mr. Colette, for giving me the floor. We support the interventions by Czechia, Germany, UK, Norway, Estonia, Denmark, and recently by Ireland. Article needs to be more balanced to provide for both source and residence jurisdiction. Also, more emphasis should be given on avoidance of double taxation. In addition, we see issues with the open-ended factor included in the draft. Thank you.


Co-Lead · Daniel [2:44:35]:

Thank you. Kenya, please.


Kenya [2:44:41]:

Thank you, Chair. We align with the submission made by Zambia on behalf of the Africa Group. We also support the submission made by India, especially in terms of inclusion of reference to economic activities and use of the word or instead of and. We agree with Zambia that this is a key commitment that speaks to the concerns that led to these negotiations. The commitment should therefore be drafted in a way that will actually address these concerns, especially those faced by developing countries. Paragraph 1 says what fair allocation shall reflect, but it does not use commitment language that will actually speak towards how this will be achieved. Paragraph 2 then uses vague words like explore and pursue which will almost certainly not promote effective implementation of this commitment. We align with the Africa Group's draft text that was submitted in March, which reflected the nexus factors that were laid out in Resolution 78230, and these factors included where economic activity occurs, where value is created, and where revenues generated, and all these factors should be included in the Framework Convention. We also believe that these are broad factors that can be found in both the resident states and in source states, so we don't see them as focusing primarily on source states because they do provide a balance between the 2 states. The text also does not mention source states and should therefore not reflect resident and states, and as we've said, the factors which have been included are broad enough to be found in both. The proposal also to focus only on economic activity or value creation, we find that to be very restrictive, and this is precisely what has led to the existing unfair allocation of taxing rights that we are here to resolve. It's also our view that this commitment provides an anchor for protocol Protocol 1, which is on taxation of cross-border services in an increasingly digitalized and globalized economy. As such, we support the inclusion of factors, the factors which have been included on users and data, although when it comes to data, we know that data can be located in one jurisdiction but it was actually generated from another jurisdiction, so we propose changing the text there to be where users are located and where data is generated from. As stated by Zambia, the Africa Group's proposed text, which was submitted in March and which we will be resubmitting, has also addressed the concern that keeps coming up on overtaxation or double non-taxation, and that proposed text obliges countries to coordinate rules and efforts to minimize both overtaxation and non-taxation. The Africa Group's proposed text also addresses a major concern of developing countries, which is existing tax treaties, many of which reflect unfair allocation of taxing rates, and we believe that this article should address that concern. We therefore align with the Africa Group's proposed text that will be resubmitted and to ensure that the implementation of the commitment as well as the objectives of this framework convention are met. Thank you, Chair.


Co-Lead · Daniel [2:48:18]:

Thank you. We have just a few minutes left before we lose translation, so we'll take the member states We have 3 member states, so we'll stop after the 3 member states, then start with the stakeholders first thing when we begin tomorrow morning. So we want to give the floor to Nigeria and then Jamaica and then to the Kingdom of the Netherlands. So Nigeria, please.


Nigeria [2:48:56]:

Thanks, colleagues, and I also appreciate you for the good work that you are doing, especially for this revised draft that we have. I think it is important to stress that Article 5 is of great importance to this meeting, and it is— it cannot really be overemphasized. I recognize the importance of this because it is one of the core, if not the most important aspect of this work. And you will see that as people normally say that taxation is very dynamic, but we agree that businesses evolve faster than tax systems, and that is why tax is doing a kind of a catch-up. But looking at these wordings, we could see that there is provision for factors that may become relevant because businesses continue to evolve, and that is giving credence to the provisions of Objective 7B in the Terms of Reference, which has identify the need to address existing, future, and related tax challenges. So we see that as a good thing and we support it. The second issue I want to address is looking at paragraph 2. Paragraph 2 states that started with the word that the parties shall, the state parties shall, and that wording is very critical because it creates an obligation. And if you look at Article 5, you will see that that is indeed missing. So there is no obligation created for whoever. The state parties have no obligation. I can't see any obligation there. So as Nigeria, we are proposing that Article 5 should also start with an obligatory statement to ensure that each state parties who are signatory to the convention have a commitment to fulfill the fair allocation of taxation rights that that paragraph 1 is putting forward. I recognize what Kenya said regarding the word explore and pursue there, and actually we support that position. We align with it in total. We also support the position that are put forward by Zambia on behalf of the African group. One other thing I want to stress is the conjunctive or disjunctive words and/or which made a majority of the delegates have spoken to. And for us, we believe that the elements that have been listed there are meant to be disjunctive, not conjunctive. I also listened to Brazil. I think The distinguished delegate from Brazil was trying to explain some drafting terminologies or style. Well, my take is that if we are interpreting this differently, then we need to take a look at it. But in my opinion, this is meant to be disjunctive, or what we call mutually exclusive. So I believe the right word there should be or, not and. Other factors like economic activity have been addressed by other colleagues, that is Kenya, Zambia, and others who spoke ahead of me from the African group, and the group will be submitting a unified position, and also in our own national capacity as Nigeria, we shall also be submitting our own position. Thank you so much, Chair.


Co-Lead · Daniel [2:53:27]:

Thank you. Jamaica, please.


Jamaica [2:53:31]:

Thank you, Chair.


Speaker 148 [2:53:33]:

Just to say that we are in agreement with the submissions made by the African Union with India in respect of economic activity being reinserted and the word or with Nigeria and with Kenya's submissions. In particular, Chair, we want to zero in on the word real economic contribution. Like Senegal, we believe that the word real should be removed because then, you know, the issue that we have now is the unfairness of the allocation of taxing rights. And so capital-exporting countries could say, well, we are the real contributors of economic contributions to capital-importing countries, and we— and that debate never ends. And so I believe, Chair, that we could look at some rewording which could probably just say fair allocation of taxing rights among jurisdictions that shall reflect economic contribution of each relevant jurisdiction, taking into account account factors such as— and we go on to see what the, the list of nexi that we hear as, um, as reformulated. Thank you, Chair.


Chair [2:54:49]:

Thank you. The Kingdom of the Netherlands, please.


Netherlands (Kingdom of the) [2:54:55]:

Thank you, colleagues. Um, since this is also my first intervention of this session, I would like to voice my appreciation to the co-leads, the secretariat, and the chair for the effort that has gone into providing for this draft. We can now see a more holistic view we have of the text, which gives us a good foundation for discussions. Um, and we would also like to thank the colleagues for the effort that has gone into taking this article specifically to a higher level. However, we believe we are not quite there yet. Sometimes more is less. More text providing for less in clarity. But in this case, however, we would argue more or less that less is more. Not arbitrarily referring to certain nexuses of which member states do not agree, from a demand perspective. This would possibly secure more support from the membership. It would also create more opportunities for member states to discuss in the future fair allocation of taxing rights related to other taxes than solely business taxation. We can address all of these issues by simply referring to reflection as appropriate activities such as economic activity and value creation, for example, just providing for some examples. Thank you.


Speaker 151 [2:56:36]:

Thank you, and we are just on time. Great. All right, I want to say thank you. So, for stakeholders, if you And now just we've run out of time, but we have a new order there. So tomorrow morning we'll start with the stakeholders on Article 5, then we'll move to the next articles. So I want to say thank you to everybody, and I'll hand over to the chair.


Chair [2:57:11]:

Okay, thank you all. Wish you a good evening, and we're gonna convene tomorrow in the same room at 10:00 morning. Thank you. Thank you.