Under the umbrella of the Global Alliance for Tax Justice (GATJ), over 200 civil society organisations and trade unions have sent a joint submission to the UN, responding to the Zero Draft Terms of Reference for a new UN Framework Convention on International Tax Cooperation, which was published on 7 June.

The full submission can be found here.

The submission has now been published on the UN website along with all the inputs received from governments and other actors. In response to these inputs, the Bureau of the UN tax negotiations is expected to produce an updated draft which will be published later in July. This text will form the basis for the second face to face negotiating round, which will begin at the UN Headquarters in New York on 29 July 2024.

The aim of the current negotiating round is to deliver a final draft Terms of Reference for the new Tax Convention by the end of August 2024. This document will then be sent for approval by the UN General Assembly in October and November 2024, and subsequently form the basis for the negotiation of the actual Convention, which is set to begin in early 2025.

Summary of the joint submission by over 200 civil society organisations and trade unions

The submission welcomes the draft as a good basis for the future negotiations, and highlights the following key points:

Essential elements to maintain in the Terms of Reference for the UN Tax Convention:

• Holistic objectives with clear links to the overall goal of sustainable development and fairness of international tax rules;
• Clear principles, including a principle that links the tax sovereignty of States to the obligation to respect the same right of other States;
• Substantive elements covering, at the minimum, all issues mentioned as potential future protocols;
• Key tax-related issues, including:
  • Fair allocation of taxing rights and equitable taxation of multinational enterprises;
  • Effective taxation of high-net worth individuals;
  • Illicit financial flows;
  • Ensuring that tax measures contribute to addressing environmental challenges.

Elements that should be added:

• The principle of special and differential treatment of developing countries;
• The goal of reducing inequalities within and among countries (SDG10);
• A principle and commitment to promote progressive tax systems, in line with paragraph 22 of the Addis Ababa Action Agenda;
• Tax and gender equality to redress the disproportionate tax burden placed on women through regressive/ consumption taxes;
• Taxation and extractive industries;
• Specific commitments on transparency, including effective and inclusive Automatic Information Exchange, public Beneficial Ownership and asset registers, comprehensive public Country by Country Reporting and public transparency around tax incentives;
• Participation of civil society;
• Exploring the option of international tax initiatives as innovative sources of financing for development and environmental protection;
• Clear links to other key global commitments of States, including those contained in the United Nations Framework Convention on Climate Change (UNFCCC), Convention on Biological Diversity (CBD), Convention on the Elimination of All Forms of Discrimination against Women (CEDAW), the Sustainable Development Goals (SDGs) and the UN Human Rights Framework, and related commitments to international resource mobilisation;
• The text relating to human rights should be amended to include all relevant aspects of the issue and included in both the section on principles and commitments. Furthermore, the section on human rights should be detached from the section on “tax payers”, not least since this term includes corporations, which are duty bearers – not rights holders.