Today, a vote in the 2^nd Committee of the UN General Assembly ended with an overwhelming majority in favor of approving the Terms of Reference for a UN Framework Convention on International Tax Cooperation. The negotiation process for the new convention is now set to begin in February 2025 and end in 2027.

In today’s vote, 125 UN Member States voted in favor and 9 voted against. Meanwhile, 46 Member States, including all of the European Union (EU) abstained.

Tove Maria Ryding, Tax Coordinator at the European Network on Debt and Development (Eurodad) followed the vote closely and said:

“We are watching tax history in the making. Now that the mandate for the new UN Tax Convention has been approved, the world’s countries can initiate an ambitious and much needed reform of the global tax rules. For the first time, we have all countries, including developing countries, able to participate on an equal footing and that is a real game changer. Unlike in the past, where global tax rules were negotiated behind closed doors at the OECD, we now also have a transparent negotiating process, which means that the public is able to hold governments to account.

“The mandate outlines a UN Tax Convention that can bring major improvements to the global tax system. It calls for equitable taxation of multinational corporations and effective taxation of the world’s richest, as well as tax cooperation to address environmental problems. And the overall aim is to create an international tax system for sustainable development. This is very different from what we have today, where tax havens allow the world’s richest to get away with tax dodging.”

During the discussion at the 2^nd Committee, the EU raised concerns about the fact that the mandate for the UN Tax Convention could be adopted by voting, as opposed to consensus. The bloc also flagged that the EU Member States might consider leaving the negotiations unless this is changed. The EU countries did, however, not vote against today’s decision, but instead opted for abstention.

Ryding said: “We see the EU abstention as a sign that there might be disagreements among the Member States. That would also make sense considering the fact that the EU on the one hand includes a number of high-tax countries, which lose large sums of money due to international tax abuse, and on the other hand includes countries that have harmful tax practices which can facilitate such abuse. But it does not make sense when the EU on the one hand insists that it cannot accept global tax rules unless they are adopted by consensus, and on the other hand keeps championing the OECD’s tax rules, which were never adopted by consensus. Going forward, we need a strong coalition of progressive countries that are highly committed to international tax cooperation, and willing to take a stand and stop tax havens. We sincerely hope that this group will include EU Member States.”

ENDS

Media contact: Julia Ravenscroft, Communications Manager at Eurodad, on [email protected]/ +44 7958184695.

Notes to editors

Today’s vote took place in the 2^nd Committee of the UN General Assembly. The vote was on a resolution that included the adoption of Terms of Reference for a new Framework Convention on International Tax Cooperation and two early protocols. The resolution that was adopted can be found here.

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.

In its Annual Report on Taxation 2024, the European Commission highlighted that: “Revenue losses due to corporate profit shifting as one strategy of aggressive tax planning are estimated to be worth up to 20% of all [corporate income tax] revenues collected in 2022 in the EU which would amount to about EUR 100 billion in nominal terms. Beyond those substantial revenue implications, avoidance and evasion of taxes tilt the level playing field among actors in the economy and threaten to undermine tax morale.”