The 30th session of the UN Tax Committee will take place next week from March 24 to March 27, 2025, at the UN Headquarters in New York. The Committee will discuss, among others, the digitalized and globalized economy, UN Model Tax Convention updates, environmental taxation, wealth and solidarity taxes, crypto taxation (where I am a proud member of the ad hoc committee), and the relation of tax to trade and investment. Celebrating 20 years of international tax cooperation at the UN, it is worth examining the proposed U.N. Framework Convention on International Tax Cooperation, which aims to create a system of international tax cooperation to close gaps in existing tax systems that prevent many countries from collecting much-needed tax revenues. Leopoldo Parada (King's College London; Google Scholar)'s recent article, U.N. International Tax Cooperation: The Terms of References Final Draft, 116 Tax Notes Int'l 771 (Nov. 4, 2024), provides a comprehensive analysis of the final draft of the Terms of Reference (TOR) for the U.N. Framework Convention on International Tax Cooperation.

A brief history is as follows: An ad hoc intergovernmental committee that drafted the TOR approved the final draft on August 16, 2024. The UN General Assembly subsequently adopted the TOR on December 24, 2024, and established an Intergovernmental Negotiating Committee (INC) to draft a framework convention and two early protocols. Negotiations officially began in February 2025, with the goal of finalizing the convention and its protocols by 2027. To understand the context of the current negotiations at the UN, it is essential to understand the TOR first.

Parada explains that the TOR aims to create an institutional structure for transparent, simple, and inclusive international tax cooperation. It is particularly focused on ensuring fair participation for developing countries and emerging economies. It follows previous U.N. efforts to enhance tax cooperation, including the Addis Ababa Action Agenda (2015) and General Assembly resolutions in 2022 and 2023. Parada comments that the TOR establishes fundamental governance principles for the UN Framework Convention, such as inclusivity, effectiveness, and tax sovereignty. The TOR also captures and materializes the political momentum, highlighting the dissatisfaction with the OECD-led global tax framework. Moreover, by introducing binding protocols in addition to the framework convention, the TOR enhances legal certainty while giving countries the flexibility to opt in or out.

Although Parada recognizes the TOR's positive contributions, he also identifies areas for improvement. First, the TOR needs clearer language and a more concise, unified objective. Rather than promoting multiple objectives that overlap with each other, the TOR could have adopted a "single objective." Rather than referencing "countries in special situations," the TOR could have adopted a more explicit text, such as "Small Island Developing States (SIDS)." The TOR final draft could have adopted a more focused approach, concentrating on three key principles: simplicity, flexibility, and transparency. Second, the TOR uses vague terminology. Notably, the document frequently references “fair allocation of taxing rights” without defining the controversial term of fairness in taxation. Third, Parada recommends reducing priority areas for early and future protocols. Finally, the decision-making process remains ambiguous, raising concerns about representation and power dynamics. In fact, the decision-making threshold between majority voting and consensus was one of the main focuses at the latest UN tax negotiations in February 2025. The African Group supported majority voting for faster and more decisive action, whereas developed countries, especially the EU, advocated for a consensus-based approach. The result was a hybrid approach: two-thirds majority voting for substantive issues and a simple majority voting for non-substantive procedural matters when consensus fails. Parada's article was written before the February 2025 negotiations, but it offers remarkable insights into the trade-offs of a majority vote and a consensual approach.

Despite those areas for improvement, I agree with Parada that the TOR final draft marks a significant step towards creating a U.N.-led global tax framework. It provides an opportunity for developing nations to take a more active role in shaping international tax policy, moving away from the current OECD-dominated approach.  Parada successfully connects the TOR final draft to ongoing geopolitical tensions in international tax governance, particularly the dissatisfaction with OECD’s dominance in tax policy, the need for a more inclusive and flexible approach for developing countries, and the risk of creating a parallel system that may fragment international tax cooperation rather than unify it. By emphasizing real-world implications, Parada’s analysis becomes more relevant to policymakers and stakeholders. As a scholar who has a diverse background and is eager to contribute more diverse voices to international tax discourse, I urge many policymakers to pay more attention to and be more actively involved in the UN's tax policymaking. Reading Parada's article would be the first step toward such efforts.