Friday 7 February 2025: Despite the withdrawal of the United States, the process to negotiate a new UN Convention on International Tax Cooperation continues, with the conclusion of the Organisational Session.

The process now moves to negotiating the substance of the new Convention along with two early protocols, which should be finished by the end of 2027. Despite calls from the US delegation for other countries to follow their example and leave the process, all other UN Member States remain engaged in the negotiation.

Tove Maria Ryding, Tax Coordination at the European Network on Debt and Development (Eurodad) attended the Organisational Session in New York and said:

“The UN Tax Convention process is a major breakthrough towards more just and effective international tax rules. Both developed and developing countries have a strong interest in working together to stop tax havens and promote fair, effective and coherent international tax rules. Ironically, while the US clearly doesn’t intend to help solve the problems, they actually stand to benefit from the solutions that will be developed under the UN Tax Convention, as do the rest of the world’s countries. This is a truly historic moment for international tax governance, and we are delighted that the process is moving forward.”

Decision-making rules made up the bulk of discussions at in New York this week. On the last day, the UK, Malta, the Czech Republic, Italy and France introduced a proposal for an amendment that would have introduced consensus decision-making, but this was voted down by an overwhelming majority.  Instead, a compromise was found with the adopted rules stipulating that decisions regarding protocols require two-thirds majority, and the convention itself can be decided with simple majority.

Ryding said: "Given the strong rejection of international cooperation shown by the US at the moment, including the UN Tax Convention, it is clear that consensus decision-making is not an option. Such a decision would allow one country to prevent everybody else from moving forward. With that in mind, it was very odd to see a number of European countries continue to call for consensus decision-making. We are happy that this issue is now resolved, so that the process can move forward, and it is very important that the rules will not allow one single country to block process for everybody else."

Furthermore, while the topic for the first “early protocol” had already been identified as cross-border services in the digitalised economy, the Organisational Session was tasked with identifying the topic of the second early protocol. At the meeting, the countries reached consensus on making "prevention and resolution of tax disputes" the topic of this protocol.

Ryding said: “In terms of the topic for the second protocol, it was a bit absurd that the issue of “dispute resolution” was seen as an uncontroversial topic, because that is definitely not the case. That said, we’re glad that the countries were able to find consensus on this matter.” 

ENDS

Media contact: Mary Stokes, Senior Communications Officer : [email protected] | +32 491146656 | WhatsApp: +54 9 11 4401-2506

Notes to editors:

• Find our press release on the US withdrawal from the negotiations here: https://www.eurodad.org/us-walks-out-tax-convention
• The Terms of Reference for a new UN Framework Convention on International Tax Cooperation and two early protocols can be found here. Further information about how the ToR was developed can be found here.