When member-states convene in New York this August for the fifth substantive session on the UN Framework Convention on International Tax Cooperation (UN Tax Convention), negotiators will navigate increasingly technical and politically contested questions. Among them is how the new Convention will relate to the vast web of bilateral tax treaties already in force around the world.
The fifth session, scheduled for 3-13 August in New York, is the latest in a series of three sessions held each year between 2025 and 2027. Under the roadmap adopted by member-states, the Intergovernmental Negotiating Committee (INC) is working towards a final Convention text and two early protocols, to be submitted to the UN General Assembly around autumn of next year (in its 82nd session).
With draft Convention language now taking shape across three workstreams, member-states are increasingly delving deeper into the substance. One of the key questions they are grappling with is how should the Framework Convention interact with the thousands of bilateral tax treaties already in force – and should it encourage countries to revisit them?
The question has significant implications for lower-income countries. Many of them are bound by aging bilateral treaties – some signed before 2000 – that may no longer reflect their fiscal priorities, and that have historically been difficult or politically costly to renegotiate.
“How the Framework Convention and its protocols will relate to the existing network of bilateral tax treaties has been controversial at both the Third and Fourth negotiation sessions and will likely not be settled anytime soon,” Frederik Heitmüller, associate postdoctoral fellow at the International Centre for Tax and Development (ICTD), said. Heitmüller participated in both sessions in an observer capacity.
“This is not surprising given the differing views on fairness of their content,” he added. (Read Heitmüller’s blog, co-authored with ICTD Associate Research Officer Florian Dierich, following the third session of negotiations)
Response to the Intergovernmental Negotiating Committee
Responding to a call for written inputs following the fourth substantive session, held in New York in February, ICTD’s International Tax team submitted a research note to Workstream I of the INC weighing in on this question.
The submission – authored by Research Director and International Tax lead Martin Hearson, Heitmüller, and Dierich – draws on a broad body of evidence across law, economics, and political science.
They argue that existing bilateral treaties are not necessarily a reliable expression of what countries today consider a fair allocation of taxing right, and may, instead, reflect the circumstances in which they were concluded.
The implication for the Convention is direct: if existing treaties cannot be assumed to reflect settled fair positions and contrast with principles that might be agreed under the Convention, then the latter may have a legitimate role to play in structuring renegotiation dialogues, whether through a multilateral protocol or facilitated bilateral processes.
Read ICTD’s full submission to the INC here.
ICTD and the UN Framework Convention
ICTD has been closely tracking developments around the Framework Convention since its inception, providing analysis and insights grounded in over a decade of research in and with lower-income countries. Visit our dedicated UN Tax Convention page for the latest news, events, and publications from our team.
For further resources on the Framework Convention and the two protocols, explore our curated reading lists:
- Part 1: The UN process and institutional context
- Part 2: Protocol 1 – Taxation of cross-border services
- Part 3: Protocol 2 – Dispute Resolution and Prevention
Previous work on tax treaties
Tax treaties are agreements between states that divide up the right to tax cross-border economic activity. ICTD has done extensive work around the topic, including the creation of a publicly accessible Tax Treaties Explorer Dataset, which provides a rich source of data to reexamine existing tax treaty policy, inform negotiation positions, and assess treaty networks. Read more about it here.
