Highlights and images for 4 February 2025

On the second day of the organizational session, delegates to the Intergovernmental Negotiating Committee (INC) to draft a UN framework convention on international tax cooperation discussed the pros and cons of possible topics for a protocol for the convention.

INC Chair Ramy Youssef (Egypt) noted that the organizational session’s priority is to decide on a topic for the second early protocol. Using a list of options set out in the Terms of Reference for the INC as a starting point, delegates discussed the merits and drawbacks of the following four options:

• taxation of the digitalized economy;  
• measures against tax-related illicit financial flows;  
• prevention and resolution of tax disputes; and  
• addressing tax evasion and avoidance by high-net worth individuals and ensuring their effective taxation in relevant Member States. 

Speakers requested additional information on the four options, especially with regard to the implications for how each would be implemented. Speakers noted challenges with introducing taxes for wealthy individuals. Some highlighted that a protocol on taxation of the digitalized economy would overlap with the first early protocol (taxation of income derived from the provision of cross-border services in an increasingly digitalized and globalized economy). Many noted that some options might take longer to negotiate than others. Some noted that a dispute resolution mechanism would be necessary for an effective tax convention.

The INC also reopened Monday’s discussions on modalities for their work, following requests from several delegations for clarity on the path forward. During a lengthy discussion, many delegations expressed uncertainty about how the INC’s work would progress. Among other points, delegates requested clarity on dates for future meetings of the INC, how intersessional work will be conducted, who will lead future workstreams, and how those leaders will be chosen.

Rules for decision-making were foremost among many delegates’ concerns, with countries reiterating support for options ranging from consensus to simple majority voting. A proposal featuring a blended approach to decision-making was also discussed. Most delegates encouraged flexibility.

At the end of the day’s deliberations, the Chair informed delegates that the Bureau would discuss the path forward for the final two days of the organizational session.