UN Tax Talks Advance Push for Fairer Global Taxation

UNITED NATIONS, New York —UN member states have concluded 10 days of negotiations on a proposed global tax convention, advancing a Zero Draft framework and two early protocols focused on taxing cross-border services and preventing and resolving international tax disputes, writes Winston Mwale.

The 10-day session, which concluded Aug. 13, 2026, focused on a Zero Draft of the proposed framework convention and two early protocols dealing with taxation of cross-border services and the prevention and resolution of tax disputes.

The negotiations, which began in 2025 and are scheduled to continue through mid-2027, are seeking to reshape the international tax system and establish a framework that developing countries argue would give them a stronger voice in global tax rule-making.

The process was initiated by the Africa Group with support from countries of the Global South, which have argued that existing international tax arrangements contain structural weaknesses that facilitate tax avoidance, evasion and illicit financial flows while limiting developing countries’ influence over international tax rules.

Advocates, including the Global Alliance for Tax Justice, say a stronger international tax framework could help countries mobilise additional domestic resources for climate action, public services and sustainable development.

The first part of the negotiations centred on the Zero Draft, which is intended to establish an inclusive and effective system of international tax cooperation.

The draft proposes that international tax cooperation should be inclusive, fair, transparent, efficient, equitable and effective.

It also recognises the sovereign right of countries to determine their own tax policies while calling for alignment with international human rights law and a broader sustainable development approach.

One of the major proposals concerns the allocation of taxing rights.

Under Article 5, taxing rights would take account of where real economic activity takes place, including where value is created, markets are located, revenues are generated and users or data are located.

Importantly, the proposed approach would apply even where economic activities do not involve a physical presence in a country.

The proposal seeks to address limitations in traditional tax rules, under which countries have often needed to establish a multinational company’s physical presence before claiming taxing rights over its income.

The draft also proposes stronger international cooperation to address tax avoidance and evasion involving high-net-worth individuals.

Article 6 would require countries to cooperate in detecting, deterring and preventing tax avoidance and evasion by wealthy individuals, including through the sharing of information about structures and techniques used to conceal assets.

Article 7 addresses tax-related illicit financial flows, particularly cross-border transactions whose principal purpose is avoiding or evading legitimate government revenue claims.

The framework also proposes the exchange of information that is foreseeably relevant to the administration and enforcement of domestic tax laws.

The first early protocol focuses on income from cross-border services, reflecting the growing ability of businesses to provide services remotely across national borders.

The proposed rules include specific provisions for automated digital services, which cover services delivered over the internet or electronic networks with minimal human involvement.

The services identified include online advertising, the supply of user data, online search engines, social media platforms, cloud computing and online gaming.

Under the proposed framework, income from such services could be considered to arise in a country where the consumer is resident.

Where the consumer criterion does not apply, taxing rights could arise where the service depends on user data generated in that country.

The protocol also proposes allowing source countries to tax gross payments for automated digital services, subject to a percentage cap that remains to be finalised.

Taxpayers could alternatively elect to be taxed based on a reasonable allocation of profits attributable to revenues generated in the country.

The second protocol seeks to establish mechanisms for preventing and resolving tax disputes between governments and taxpayers.

Among the proposed tools are bilateral and multilateral advance pricing arrangements, which would allow taxpayers and governments to agree in advance on the tax treatment of certain transactions.

The protocol also provides for advance rulings, cooperative compliance arrangements and joint audits.

Joint audits would allow tax authorities to examine a taxpayer’s affairs through coordinated processes, including circumstances where officials from one country participate in activities conducted in another jurisdiction.

Where disputes cannot be prevented, the protocol proposes a Mutual Agreement Procedure through which taxpayers could present cases to competent tax authorities.

Countries would be encouraged to resolve disputes within 24 to 30 months.

One of the most debated provisions concerns arbitration.

Under the proposal, unresolved issues could be referred to an independent three-member arbitration panel if competent authorities fail to reach agreement within three years.

Although an arbitration decision would generally be binding, countries could agree on a different solution within six months of the decision.

The protocol also proposes mediation and conciliation as alternative mechanisms, allowing independent third parties to help countries resolve disagreements without relying on binding arbitration.

The Zero Draft proposes a new institutional structure to oversee implementation of the convention.

A Conference of the States Parties would serve as the supreme body responsible for promoting and reviewing implementation and could adopt supplementary protocols and rules of procedure.

A subsidiary body made up of government technical experts would monitor implementation and report to the Conference.

The framework would also establish a permanent UN secretariat to provide administrative and technical support.

Capacity building is another proposed component, with the draft calling for technical assistance and technology transfer to help developing countries strengthen their tax administrations and implement the convention.

The draft also addresses the relationship between the proposed UN framework and thousands of bilateral tax treaties already in force.

It calls on countries to take progressive and meaningful steps towards aligning existing international tax agreements with the principles of the new convention.

Despite progress, the negotiations continue to expose differences between countries in the Global South and Global North over the ambition and scope of the proposed framework.

Global Alliance for Tax Justice Executive Coordinator Dr. Dereje Alemayehu said Global South countries had pushed for measures aimed at addressing issues that prevent governments from tackling inequality, while some Global North countries had demonstrated less ambition.

“The process is moving forward quickly and we need countries to bring bold proposals which match the scale of the issue,” Alemayehu said.

The Africa Group remains central to the negotiations, particularly in its push for a universal international tax framework that would move beyond the existing OECD-led arrangements.

The negotiations will continue with member states expected to submit written comments on the Zero Draft and the two protocols between August and November 2026.

The next negotiating session is scheduled for Nov. 30 to Dec. 11, 2026, in Nairobi, Kenya.

Final political decisions and negotiations are expected to take place in 2027, with the final convention and two early protocols scheduled to be submitted to the UN General Assembly for consideration in the first quarter of 2028.

The conclusion of the New York session marks a shift from broad conceptual discussions towards detailed negotiations over the rules that could eventually govern international tax cooperation.

The central challenge will be reaching agreement on a framework that balances countries’ sovereign taxation rights with calls for a more equitable distribution of taxing rights and greater resources for development.