Protocol 1 of the Framework Convention on International Tax Cooperation – currently being negotiated in the UN – tackles one of the most contentious questions in international taxation: when services flow across borders, who gets to tax the income they generate?
For decades, the answer given by the OECD’s (and a bit less so by the UN’s) Model Tax Conventions and by the Bilateral Tax Treaties countries have negotiated among each other has largely favoured residence countries where firms are headquartered. But as globalisation and digitalisation have eroded the link between physical presence and value creation, this allocation increasingly feels misaligned with economic reality, and the Bilateral Tax Treaty networks of many countries limit their ability to mobilise domestic resources from services delivered to local customers abroad.
The negotiations for Protocol 1, and the Framework Convention more broadly, present a genuine opportunity to revisit how cross-border services are taxed. But, as we explored in our recent policy brief, this is not without difficult trade-offs involving legal form, tax base, thresholds, nexus rules, and treaty interaction, among others.
In Part 2 of our UN Tax Convention reading list (read Part 1 on the UN process and institutional context here!), we bring together key research and analyses to help you make sense of what’s being negotiated and why it matters.
On Protocol 1
- [ICTD] Towards a New Solution for Taxing Cross-border Services? Trade-offs in Designing UN Tax Convention Protocol 1, by Florian Dierich (2025): Outlines how Protocol 1 negotiators must balance legal form, nexus rules, tax base definitions, thresholds, and treaty interactions, showing that institutional trade-offs – and political capacity – determine the path towards feasible cross-border services taxation.
- [ACADEMIC] Global Tax Wars in the Digital Era, by Assaf Harper (2025): Analyses how digitalisation intensifies competition for tax authority, deepening institutional rivalries, and reframing global tax governance around power struggles as well as technical standards.
- [ACADEMIC] Trading away tax sovereignty? How trade rules shape taxation of the digital economy in Africa, by Karishma Banga, Alexander Beyleveld, and Martin Luther Munu (2025): Develops a framework showing how trade rules on services, e-transmissions, and digital products constrain African countries’ ability to levy corporate income tax, VAT, customs duties, and digital services, as demonstrated through case studies of Kenya, Rwanda, and South Africa.
- [ACADEMIC] Eliminating Double Taxation of Income from Cross-Border Services in the Digital Era from the UN Model Perspective, by Ziemowit Kukulski (2025): Critiques the UN Model’s outdated pre-digital rules and asks whether its recent additions on technical and automated digital services truly update treaty practice – or leave source states under-protected.
- [ACADEMIC] Briefing Paper: Towards a Protocol on Taxing Cross-Border Services, by Lyla Latif (2025): Argues that the growing complexity of digital and professional cross-border services requires a dedicated UN protocol defining new nexus, base, threshold, and enforcement rules to modernise taxation frameworks.
- [ACADEMIC] Recent Developments in the Taxation of Cross-Border Services: LATAM Position(s) on the UN Terms of Reference (ToR), by Alina Miyake (2025): Analyses Latin America’s evolving legal strategies on source-based taxation of technical and digital services within the UN Framework Convention’s Terms of Reference, emphasising how regional experiences are shaping multilateral tax norms.
- [INTERGOVERNMENTAL ORGANISATION] Towards a UN Protocol for Taxing Cross-Border Services in a Digitalised Economy, by Abdul Muheet Chowdhary, Anne Wanyagathi Maina, and Kolawole Omole, South Centre (2024): Proposes a UN protocol to harmonise digital services taxes, include automated digital services, address double taxation, and channel revenue towards SDGs – with the G20 serving as a strategic forum shaping its architecture.
- [ACADEMIC] Taxing data when the United States disagrees, by Tarcísio Diniz Magalhães and Allison Christians (2024): Argues that with digital services taxes provoking US retaliation, source jurisdictions should revisit income tax mechanisms – using withholding via treaty interpretation – to tax data-driven services more defensively.
- [ACADEMIC] Rethinking taxing rights, by Luís Eduardo Schoueri and Pedro Guilherme Lindenberg Schoueri (2024): Examines how Pillar 1’s limited scope, complexity, and political fragility reopened century-old allocation debates and argues a UN framework convention could set pragmatic guardrails and enable a longer-term multilateral rethinking of taxing rights.
- [ACADEMIC] A new framework for digital taxation, by Reuven Avi-Yonah, Young Ran Kim, and Karen Sam (2022): Delivers a comprehensive critique of the OECD/G20 Pillars, highlights fragility in Pillar 1, warns of Digital Services Tax persistence and treaty overrides, and proposes a normative shift towards a UN-style Data Excise Tax.
Primary Data
On the main negotiation process
- Issue Notes of Co-Leads from Workstreams I, II and III, UN DESA (August 2025)
- Inputs to first and second sessions of the International Negotiation Committee on the UN Framework Convention on International Tax Cooperation (July 2025)
On the Ad Hoc Committee (2024)
- Terms of reference for a United Nations Framework Convention on International Tax Cooperation, UN DESA (January 2025)
On the pre-agenda making phase (2022-2023)
- Promotion of inclusive and effective international tax cooperation at the United Nations, UN Secretary General (July 2023)
- Resolution 77/244 adopted by the General Assembly on 30 December 2022, UN General Assembly (January 2023)
