Developments on the UN Framework Convention on International Tax Cooperation

This follows the landmark UN General Assembly resolution adopted in late 2023, which launched the first steps toward a globally negotiated, binding agreement on international tax governance.

While this move signals a more inclusive and multilateral approach, especially in giving developing countries equal footing, it also introduces new uncertainties for businesses already adjusting to recent OECD tax reforms. The ICC emphasised that structured private sector engagement will be essential to ensure that the future convention remains coherent, predictable, and administrable. 

Key Developments 

• The Ad Hoc Intergovernmental Committee has been established and will begin formal negotiations in the coming months. 

• Business stakeholders are now able to register as observers of the sessions and are encouraged to submit technical input through ICC or national associations. 

• The convention’s scope is broad, aiming to set global norms and principles rather than detailed rules - but its legal status could be binding. 

• Many businesses expressed concern about potential regulatory fragmentation, especially if the new framework does not align with OECD's Pillar One and Pillar Two standards. 

• The need for capacity building in developing countries was widely recognized, as inclusive participation requires not just access but also resources. 

The ICC reiterated that this new track does not render existing OECD efforts obsolete but rather opens a parallel process, one that risks adding complexity unless clear coordination mechanisms are established. Business leaders were urged to engage early and constructively to safeguard key principles like simplicity, neutrality, and predictability in global tax standards. 

Recommendations for Business 

• Register to observe the UN tax negotiations and follow developments closely through the channels outlined by the UN. 

• Coordinate input through ICC channels to avoid fragmented responses. 

• Evaluate compliance exposure in anticipation of potentially overlapping global standards. 

• Support efforts to promote coherence between UN and OECD frameworks. 

The ICC will continue to provide analysis, updates, and advocacy to ensure that the private sector's voice is heard throughout this evolving process. A formal position paper will follow once the first draft of the convention is released.