The United Nations (UN) ad hoc committee recently concluded the first round of negotiations for the final parameters – or “terms of reference” (TOR) – for a new UN framework convention on tax, which some have argued “could deliver the biggest shake-up in history of the global tax system.”

The negotiations, held from April 26 to May 8 in New York, were the first of two substantive sessions before the final draft of the TOR for a UN Framework Convention on International Tax Cooperation is presented to be voted on by the General Assembly later this year.

ICTD co-Research Director Martin Hearson, who was present in a research-observer capacity, said, “it was a privilege to watch countries begin the process of designing a new international tax cooperation instrument together.”

“Our research has shown the appetite of many lower-income countries to more actively shape international tax standards. The challenge is to build on a century of work by the League of Nations, OECD, and United Nations, while also accommodating a wider range of needs and preferences, particularly those of lower-income countries,” he added.

In an earlier blog, Hearson, who leads ICTD’s International Tax programme, said, “for decades, the majority of UN members from the global South have called for it to establish an intergovernmental tax body supported by civil society activists. Only now have they taken that call over the line so tangibly.”

ICTD response to the ad hoc committee’s call for inputs

Prior to the first substantive session, the Chair of the Committee invited member states and other stakeholders, including civil society organisations and academic institutions, to provide inputs in writing on the substantive issues they believe the TOR should (or should not) address.

In its response, ICTD outlined, among others, three “high-level goals” for the framework convention, namely to:

1. Establish an inclusive political body that is complementary to existing technical spaces.

“The framework convention should above all seek to establish an inclusive political body that could ‘orchestrate’ the work of technical bodies, whether new or existing. This would attenuate concerns about duplicating existing work – a concern that due to a scarcity of time and resources available for multilateral negotiations is also shared by negotiators from lower-income countries.”

2. Enshrine the principle of Special and Differential Treatment (S&DT) in substance and process of global tax governance.

“S&DT provides for preferential rights in favour of developing countries, predicated on remedying the asymmetrical economic, technical, and political relationship between global north and south countries. While the principle gained prominence in the multilateral regimes on trade and environment, it is already reflected in some of the substantive outputs of global tax governance.”

3. Permit the development of various solutions rather than a one-size-fits-all approach.

“If cooperation is meaningfully inclusive, it will naturally entail a re-examination of the appropriateness of standards that have mainly been developed by high-income countries for different contexts found in other states. In some instances, the outcome of multilateralism in tax cooperation may be to minimise the friction created by the emergence of multiple standards by managing the interface between them, rather than reaching global consensus.”

Read ICTD’s full response here.

Related research

ICTD has likewise published a number of research papers that have served as basis for some of the points raised in the call for inputs. In particular, Working Paper 171 investigates the influence of the UN model on tax treaties signed by lower-income countries, as well as the potential for specific model provisions to be mainstreamed in a greater number of treaties.

Meanwhile, Working Paper 172 looks at how the UN could create a more inclusive and effective space for international cooperation. It identifies, among others, four specific issues of global tax governance that present challenges to many lower-income countries: negotiating capacity, language of negotiations, agenda-setting, and cooperation between political and technical stakeholders.


Martin Hearson

Martin Hearson is a Research Fellow at IDS, co-Research Director of the ICTD and the International Tax programme lead. His research focuses on the politics of international business taxation, and in particular the relationship between developed and developing countries. Before joining ICTD, Martin was a fellow in international political economy at the London School of Economics and Political Science, teaching courses on political economy and global financial governance.