1 Apr 2025
UN-led tax reforms, digital economy protocols, and OECD challenges headline a pivotal Commission meeting. The ICC Taxation Commission’s March 2025 meeting convened at a critical moment for global tax policy. Against the backdrop of growing geopolitical instability and fragmentation in international trade, ICC members gathered to address urgent developments in global taxation frameworks, digital economy protocols, and regional policy shifts.
Trade Turbulence and Strategic Advocacy
Opening the session, Andrew Wilson (ICC Vice-Secretary General) and Valerie Picard (ICC Head
of Trade) addressed a key concern: the erosion of multilateralism driven by unilateral trade
measures, particularly from the U.S. While the core trade stance hasn’t dramatically changed,
the implementation is now more aggressive and less internally contested. This “louder, more
coordinated” approach risks hardening global divides and undermining established multilateral
institutions. In response, the ICC is stepping up its advocacy efforts, producing foundational
papers—such as on VAT—that provide clarity and are being actively used by member states in
their policy dialogues.
UN Tax Convention: Inclusive, But Complex
Michael Braun (Germany UN Mission) shared an update on the UN process to establish a
framework convention for international tax cooperation. Spurred by growing calls from developing
nations, the convention aims to rebalance rule-making power and build a more inclusive and
equitable tax framework. The process now moves into a drafting phase following the adoption of
the Terms of Reference in 2024, which laid out three pillars: a framework convention, a protocol on
digital services taxation, and another on dispute prevention.
The structure includes three workstreams, co-led by representatives from the Global South. While
the Terms of Reference do not formally embed stakeholder engagement, ICC is pushing for
structured business input, emphasizing that private sector expertise is crucial to ensuring practical,
implementable rules.
The OECD Debate: Pillar Two and Compliance Burdens
In parallel, the OECD’s Pillar Two implementation sparked intense debate. Business representatives
flagged compliance costs, especially for low-risk jurisdictions, and questioned the added value
of full model rules in such cases. ICC presented a proposal for permanent safe harbors based on
country-level data and simplified reporting, aimed at lowering compliance costs while maintaining
tax integrity. Although the idea gained some support, concerns about erosion of tax bases persist
among certain jurisdictions. ICC called for urgent high-level government engagement to maintain
momentum and promote a practical, stable system.
Regional Insights and Diverging Trajectories
Regional sessions showcased both alignment and divergence. In the Asia-Pacific, the Belt and
Road Initiative tax platform highlighted progress in digitalization and capacity building. Meanwhile,
the EU is focusing on simplification and competitiveness, with the European Commission reviewing
directives for redundancy in light of Pillar Two’s global uptake. Africa, represented by Thulani
Shongwe (ATAF), spotlighted VAT collection challenges and a growing push for regional cohesion
on core tax policy positions, backed by the African Union.
The U.S. position remains a wildcard. With the administration opposing some OECD rules and
broader concerns about extraterritoriality, participants expressed concern over the stability of the
current multilateral tax order.
Beyond Structure: Substance in Focus
As the UN tax convention process advances, the spotlight is shifting from structure to substance.
Key issues include the scope of Article 12 on digital services, the potential for simplified allocation
systems, and whether the dispute protocol will embrace binding arbitration or remain limited to
prevention mechanisms. The ICC emphasized the need for clarity to avoid conflicting obligations
and ensure smooth integration with existing treaties.
Ongoing Projects and What’s Next
The Commission’s working groups reported on ongoing initiatives including:
Foreign subsidy regulations
VAT treatment for cross-border telework
Sustainability-linked tax policies
The interaction between investment treaties and tax rules
All underscored the same themes: simplicity, coherence, and coordination. Fragmented rules risk
undermining both taxpayer certainty and government revenue collection.
Looking ahead, ICC will play a key role in the UN’s Financing for Development Forum
(FfD4) in Seville, where business engagement will address the impact of tax on development,
investment, and sustainability. A new economic impact study on digital service taxation is also in
the works, and ICC continues to push for inclusive dialogue as UN protocols are developed.
“The global tax landscape is being redefined,” one participant noted, “and ICC must be both a
stabilizer and a shaper of that future.
Conference Room Papers (CRPs) - 30th Session | Financing for Sustainable Development Office