Negotiations to establish a framework convention on international tax cooperation are set to commence formally in February 2025, following the establishment of an open-ended intergovernmental negotiating committee (INC) and the terms of reference (TOR) to begin drafting a convention intended to create a more inclusive, effective, and collaborative system of global taxation.

The UN General Assembly’s Second Committee adopted a resolution establishing the INC and TOR following a final debate on 27 November 2024. The resolution, which was introduced by Nigeria, on behalf of the African Group, calls for the newly established INC to begin its work from 3-6 February 2025, at UN Headquarters in New York, US.

In an introduction of the draft resolution to the UN’s Second Committee, Nigeria described the process to develop the resolution as complex, reaffirmed the African Group’s commitment to consensus, and lauded “moments of constructive engagement” from delegations from around the world including “some partners in the Global North.” He emphasized the African Group’s belief that achieving an inclusive and equitable framework for taxation would benefit all member states and urged all delegates to support the resolution.

While many countries underscored the importance of creating inclusive, effective cooperation on international taxation, speakers also said the resolution did not reflect their input and positions. At the request of the European Union (EU), the Second Committee voted on two operational paragraphs before voting to adopt the full resolution.

On operational paragraph 2, in which the draft decision indicated the General Assembly decides to “adopt” the TOR for a UN Framework Convention on International Tax Cooperation, Hungary, speaking on behalf of the EU, said the text had not been agreed upon during the Ad Hoc Committee session in which it was drafted. Saying that future negotiators “should be guided by, but not have their hands bound by,” the TOR, he indicated other processes have “forwarded, noted, or taken into consideration” their respective TORs.

On operational paragraph 5, which decides the INC will convene an organizational session in New York from 3-6 February 2025 and will “decide on the subject of the second early protocol, which shall be drawn from the list of specific priority areas set out in the terms of reference,” Hungary, on behalf of the EU, objected to the lack of a reference to the principle that “broad-based consensus” is “imperative,” and said knowing how decisions would be taken is a basic prerequisite of every committee tasked with drafting a legally binding instrument. 

Nigeria, on behalf of the African Group, emphasized that the TOR balances the perspectives of all member states and cautioned against reopening discussion, saying this would risk delaying the process. He further noted that the African Group supports addressing decision making rules at the INC’s organizational session, saying this would ensure member states could collectively decide on procedures in an inclusive and transparent manner.

Delegates then voted on whether to retain each of the operational paragraphs in question. 119 voted in favor of retaining operational paragraph 2, 48 voted against, and 5 abstained. 121 voted in favor or retaining operational paragraph 5, 47 voted against, and 4 abstained.

Noting it had abstained from the vote on operational paragraph 5, the UK underscored that consensus-based decision-making is a core tenet of international tax cooperation, as it is the most effective means of ensuring future outputs will be widely implemented, and called for finding an outcome that will work for all states during the organizational session.

The US called for a vote on the entire resolution. He expressed concerns that a decision-making process not based on consensus would result in an outcome that would not stand the test of time and the TOR would lead to duplication of work in intergovernmental negotiations in other forums. He called on all member states to vote against the draft resolution.

Nigeria, on behalf of the African Group, re-emphasized that the resolution reflects a balanced approach to advancing fairness, equity, and inclusivity in global tax negotiations, and said voting against the resolution risks undermining the principles of multilateralism and disregarding the unique challenges faced by developing countries. Calling on all delegates to vote in favor of the resolution, he said this would be a decisive step toward ensuring all voices are heard in the process of shaping a more inclusive international tax system.

125 delegations voted in favor of the resolution, 9 voted against, and 46 abstained; thus, the resolution on promotion of inclusive and effective international tax cooperation at the United Nations (A/C.2/79/L.8/Rev.1) was adopted.

In ensuing statements, many countries underscored the importance of consensus-based decision-making, saying this is the only means of ensuring the development of a legally binding instrument that is likely to be widely ratified and effectively implemented. Several countries warned that lack of consensus could result in a fragmented tax architecture that would be detrimental to both developing and developed countries. Hungary, on behalf of the EU, warned that the imposition of simple majority decision-making would be unacceptable and would leave EU member states unable to participate.

Nigeria, on behalf of the African Group, said the decision represented a critical step toward addressing systemic imbalances and strengthening the foundations of a global tax system that will work for all UN member states, and especially those that have been historically underrepresented in decision making. Several countries echoed this view, lauding the decision as a historic and transformative step toward creation of a more equitable global tax system. [UNGA Second Committee discussion and adoption on 27 November 2024] [UNGA Draft Resolution on Promotion of inclusive and effective international tax cooperation at the United Nations]