A Roadmap for Negotiating the Protocols to the United Nations Framework Convention on Tax

The report outlines a strategic framework for negotiating protocols under the UN Framework Convention on International Tax Cooperation (UN FCITC). It identifies two 'early protocols'—taxation of cross-border services and the resolution of tax disputes—and several 'potential protocols' covering the digital economy, illicit financial flows, high-net-worth individuals, environmental taxation, information exchange, mutual assistance, and harmful tax practices. The document argues that the UN FCITC can provide a more inclusive and effective alternative to OECD-led initiatives, which often disadvantage developing nations. Key recommendations include establishing a global digital services tax, creating a global asset register for beneficial ownership, implementing a global minimum tax on the super-rich, and developing a coordinated multilateral environmental tax architecture to support net-zero goals.

• The UN FCITC should prioritize an early protocol on cross-border services that encompasses both digital and non-digital services, using Article 12AA of the UN Model Tax Convention (UN MTC) as a starting point to expand source countries' taxing rights.
• A global digital services tax (DST) should be negotiated under the cross-border services protocol to avoid relying solely on the OECD's Pillar One Amount A, which is limited to a small number of highly profitable multinational enterprises.
• To resolve tax disputes, the UN FCITC should favor state-to-state mechanisms and domestic courts over investor-state dispute settlement (ISDS), as the latter is criticized for being costly and unpredictable.
• Developing countries lose approximately USD 1 trillion annually to illicit financial flows (IFFs), and the UN FCITC could address this by establishing an international definition of IFFs and a Global Asset Register for beneficial ownership.
• There is significant revenue potential in taxing high-net-worth individuals (HNWIs); the report suggests adopting a global minimum tax on the super-rich, potentially drawing on the Brazilian G20 proposal.
• The UN FCITC could support the UNFCCC by creating a binding multilateral environmental tax architecture, including targets for phasing out fossil fuel subsidies and implementing carbon pricing for aviation and shipping.
• To improve tax transparency, the UN FCITC should develop an inclusive peer review mechanism for the exchange of information (EOI) and enable public country-by-country reporting (CbCR) similar to EU Directive 2013/34/EU.
• The report recommends a global standard for mutual assistance in the collection of taxes that provides for unconditional assistance and clear guidelines for cost recovery.
• To combat the 'race to the bottom' caused by harmful tax practices, the UN FCITC could reinforce OECD Pillar Two model rules as a minimum standard to increase effective corporate tax rates.

APA

Oguttu, A., Rita, E., Readhead, A., Lago, J. D. R., Nikiema, S., Mataba, K., & Kuteken, J. M. (2025). A Roadmap for Negotiating the Protocols to the United Nations Framework Convention on Tax. International Institute for Sustainable Development. https://www.iisd.org/system/files/2025-07/negotiating-protocols-un-framework-convention-tax.pdf

Chicago

Oguttu, Annet, Elisangela Rita, Alexandra Readhead, Josefina Del Rosario Lago, Suzy Nikiema, Kudzie Mataba, and Juliana Midori Kuteken. A Roadmap for Negotiating the Protocols to the United Nations Framework Convention on Tax. International Institute for Sustainable Development, 2025. https://www.iisd.org/system/files/2025-07/negotiating-protocols-un-framework-convention-tax.pdf.

Wikipedia

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BibTeX

@techreport{oguttu2025roadmap, author = {Oguttu, Annet and Rita, Elisangela and Readhead, Alexandra and Lago, Josefina Del Rosario and Nikiema, Suzy and Mataba, Kudzie and Kuteken, Juliana Midori}, title = {{A Roadmap for Negotiating the Protocols to the United Nations Framework Convention on Tax}}, institution = {International Institute for Sustainable Development}, year = {2025}, month = jul, url = {https://www.iisd.org/system/files/2025-07/negotiating-protocols-un-framework-convention-tax.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }