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Joint civil society and trade unions response to the Co-Lead’s Draft Framework Convention Template, published on 24 October 2025

This document is a joint response on behalf of the Global Alliance for Tax Justice (GATJ)
and a broad coalition of organizations and trade unions to the Co-Lead’s Draft Framework
Convention Template, published 24 October 2025. GATJ facilitates the Civil Society
Financing for Development Mechanism’s Tax Justice Workstream with the support of one of
its members, the European Network on Debt and Development (Eurodad). GATJ is a
Southern-led global coalition in the tax justice movement.
The response includes the following sections:
1. Overall assessment
2. Summary table
3. Cross-cutting specific comments on the draft text
4. Specific comments on the Articles in the draft text
1. Overall assessment
1.1 The current draft lacks ambition, substance, and fails to deliver on the mandate as
outlined in the Terms of Reference (ToR), including the overall objective of establishing “an
inclusive, fair, transparent, efficient, equitable and effective international tax system for
sustainable development, with a view to enhancing the legitimacy, certainty, resilience and
fairness of international tax rules, while addressing challenges to strengthening domestic
resource mobilization”.
1.2 The draft generally lacks multilateral solutions, and a number of key overall
elements are missing, including specific approaches and mechanisms to ensure a fair
allocation of taxing rights (ToR para 10(a)), equitable taxation of multinational enterprises
(ToR para 10(a)), effective taxation of high-net worth individuals (ToR para 10(b)), and
international tax approaches that will contribute to sustainable development (ToR para 10(c)),
as well as transparency mechanisms and effective and equitable exchange of information
(including automatic information exchange) (ToR para 10(d)), and solutions that can address
illicit financial flows (including tax evasion and avoidance) (ToR para 10(e)) and prevent
international tax disputes (ToR para 10(f)).
1.3 In line with paragraph 18 of the ToR, it is now essential to ensure a process which is
Member State-led, and allows each Member State to submit specific proposals for text
that should go into the Convention, with the aim of delivering on the ToR. Rather than a
summary text, the next negotiating text should provide a compilation of such proposals by
Member States, with the aim of allowing them to consider, negotiate and find common
solutions on the basis of their own suggestions. In line with paragraph 21 of the ToR, it is
also essential to ensure that civil society and other relevant stakeholders are able to
effectively contribute to the work, including by ensuring full transparency and allowing for
observers to present their views and suggestions throughout the negotiations.

2. Summary table
Cross-cutting specific comments on the draft text
Issue Solution
Legal form Replace the wording “Parties agree” with “Parties shall”.
It is unclear why the draft text uses the term “State
Parties”, as opposed to “Parties”. Furthermore, it’s
inconsistent with the ToR
Change the term “State Parties” to “Parties” throughout the text.
References to taxation of
multinational enterprises
(MNEs) are scattered
throughout the text
Introduce an Article on Equitable Taxation of Multinational Enterprises (which
is the term used in the ToR para 10(a)), to allow the issue of taxation of MNEs
to be addressed in a clear and coherent manner. See suggested Article 4 bis.
References to “information
exchange” are scattered
throughout the text, and
yet there is no proposal for
multilateral solutions
Introduce specific Articles on key information exchange mechanisms,
including a Global Asset Register, Automatic Information Exchange and
Beneficial Ownership Transparency. See specific suggestions under Article 6.
The different needs,
priorities and capacities of
countries, including
developing countries, are
not reflected in the text
Integrate special and differential treatment of developing countries as a cross
cutting element in the Convention, in line with the ToR para 9(a).
Specific comments on the Articles in the draft text
Article 2 Principles
The Principles will need to
be further fleshed out
Ensure that the section on principles of the Convention is revisited after the
discussion about commitments, recognizing the need for significant
strengthening and further detail to be added to the text contained in the ToR.
Article 4 – Fair allocation of Taxing rights
The issue of fair allocation
of taxing rights should not
be limited to MNEs
Rather than trying to develop a “one size fits all” solution to fair allocation of
taxing rights, the issue should be integrated as a cross-cutting element,
including in Article 5 on High-net worth individuals, as well as a new separate
Article on Equitable taxation of MNEs (see suggested Article 4 bis).
Meanwhile, Article 4 can introduce a basic source country taxing right which
can include the concept of “Significant Economic Presence”, and apply
broadly, “except as otherwise expressly provided in this Convention and its
Protocols”.
Article 4 does not actually
entail allocation of taxing
rights
Add a specific Article on Equitable taxation of multinational enterprises, which
introduces a transition to unitary taxation with formulary apportionment. See
suggested Article 4 bis.
Article 4 introduces a
controversial part of the
The concept of “value creation” should be deleted.

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2013 G20 approach to
corporate taxation, namely
“value creation”
Article 4 introduces an
incomplete list of relevant
factors to determine fair
allocation of taxing rights
in relation to multinational
enterprises
Article 4 should be kept very general and focus on introducing a basic source
country taxing right that applies “except as otherwise expressly provided in this
Convention and its Protocols”. The specific factors for allocation of taxing
rights related to MNEs should be developed at a later stage, as a part of
formulary apportionment. It is also important to consider the option of
introducing different formulas for different types of economic activities. See
suggested Article 4 bis.
New Article 4 bis – Equitable Taxation of Multinational Enterprises
Unitary taxation with
formulary apportionment
and a minimum effective
corporate tax rate
With reference to the ToR para 10(a), introduce an Article on Equitable
Taxation of Multinational Enterprises, in which Parties to the Convention
decide to transition to unitary taxation with formulary apportionment,
supplemented by an ambitious minimum effective corporate tax rate. While the
Convention should contain the overall decision, mandate and timeline, the
specific rules to operationalize the decision can be developed by the future
Conference of the Parties (COP)
Article 5 –High-net worth individuals
Article 5.1 and 5.2 – tax
avoidance and evasion of
HNWIs – lack multilateral
solutions
Introduce Articles related to the establishment of a Global Asset Registry and
Automatic Exchange of Information (see below under Article 6). These
Articles should include the points related to covering “additional types of assets
and instruments”. The element of “structures and techniques by taxpayers,
advisors and intermediaries” should also be included, and a specific reference
to techniques applied through shell companies could be added.
Article 5.3 – effective
taxation of HNWIs – is not
operational
Article 5.3 must be further elaborated. This includes outlining a process to
identify HNWIs, both within countries (based on nationally specific
thresholds), and at the global level. The Global Asset Register (see below under
Article 6) will be essential in this context, including by identifying the true –
beneficial – owners of assets.
Furthermore, in accordance with 10(b) of the ToR, the Convention must
operationalize the commitment to ensure “effective taxation” of the identified
HNWI, including both approaches to be coordinated between Member States as
well as international components, including a global minimum tax. This should
include a commitment to delivering progressively higher tax rates for HNWIs,
with revenues channeled toward sustainable development. It also includes
measures to ensure compliance and effectiveness, including exit taxes and
minimum post-departure tax liabilities.
The approach to taxing HNWIs should ultimately be anchored in the objective
of establishing an “international tax system for sustainable development” (ToR
para 7(c)), as outlined by the 2030 Agenda and the principle of common but
differentiated responsibilities and respective capabilities, which includes
tackling inequalities within and between countries, addressing ecological debt,
and mobilizing financing for pressing environmental and social needs, and
thereby ensuring that the implementation of a global minimum tax directly
contributes to sustainable development outcomes.
For the world’s wealthiest HNWIs, it should also be recognized that none of
their existing wealth stocks originated solely from their country of residence,
and the taxing rights to such wealth must include an international component,
anchored in the objective of reducing inequalities and promoting sustainable
development.

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Article 6 – Mutual Administrative Assistance
Article 6 – Overall – fails
to respond effectively to
the components related to
information exchange and
transparency
In line with para 10(d) from the ToR, change the title of the Article to “Mutual
Administrative Assistance, Including Transparency and Exchange of
Information”, and/or introduce additional Articles to capture the key
multilateral solutions outlined below, including a Global Asset Register (GAR),
Automatic Information Exchange (AIE), Public Beneficial Ownership
Registers (BO) and Public Country-by-Country Reporting (CBCR).
These key Articles could be designed in a manner that supports the
implementation of other tax measures raised in the Convention, including
unitary taxation of multinational enterprises and effective taxation of high-net
worth individuals.
Global asset register Introduce an Article in the Convention that establishes a UN Global Asset
Register that links all types of assets, companies, and other legal vehicles used
to own assets, to their beneficial owners. The GAR should build on domestic
implementation of beneficial ownership transparency reforms for legal vehicles
and assets, and guarantee automatic exchange of information among all Parties
to the Convention (see below).
Automatic information
exchange
Add an Article in the Convention that introduces automatic information
exchange on the basis of a commonly agreed standard as a part of the UN
Global Asset Register. The standard should ensure that all Parties can get
access to AIE on an equal footing, and include a transition phase with non
reciprocal information exchange for developing countries with low capacity.
Public beneficial
ownership registers of
legal vehicles at national
level, and connected to the
Global Asset Register
Introduce an Article on beneficial ownership transparency, requiring
implementation of national beneficial ownership registers of companies and
other legal vehicles, adhering to commonly agreed standards so that this
information can be incorporated into the UN Global Asset Register.
Article 6.3 explicitly rules
out public transparency for
all information related to
Articles 5 and 6, and
introduces a right for
supplying Parties to
introduce restrictions
related to the information
provided
Introduce specific Articles on key transparency mechanisms, including Public
Country-by-Country Reporting, a Global Asset Register, Automatic
Information Exchange and Beneficial Ownership Transparency based on
commonly agreed standards and multilateral solutions. For non-public
information, information exchange should be based on a joint standard to be
developed by the COP, and takes into account the needs and realities of all
countries.
Public Country-by
Country Reporting
Introduce an Article on “Public Country-by-Country reporting”, which includes
a central public database for CBC reports and is specific enough to be fully
operational shortly after the entry into force of the Convention.
Article 7 – Illicit Financial Flows, Tax Avoidance and Tax Evasion
Article 7a) lacks real
operational solutions
Introduce key multilateral solutions that can provide effective solutions to IFFs.
See also above under Article 4 bis (Equitable taxation of multinational
enterprises), Article 5 (High-net worth individuals) and Article 6
(transparency).
Article 7(b) on structures
and techniques used by
taxpayers to avoid and
evade taxes partially
overlaps with Article 5.2
Integrate exchange of information related to “structures and techniques
developed and used by taxpayers, advisors and intermediaries” into separate
Articles on a Global Asset Register and Automatic Information Exchange, and
ensure that this exchange includes both individuals and multinational
enterprises.

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and lacks a multilateral
solution
Article 8 – Harmful Tax Practices
Article 8.1 places special
emphasis on harmful tax
practices (HTPs) related to
multinational enterprises
Expand the scope of Article 8.1 to cover all types of actors that can engage in
international tax abuse.
Article 8.2 addresses tax
incentives, but leaves out
the issue of public
transparency
Expand the scope of Article 8.2 to cover all types of tax incentives and
introduce public transparency.
Article 8.3 (a) introduces
language that could
indicate Public Country
by-Country reporting, but
in a form that is very
vague
Introduce a specific Article on Public Country-by-Country reporting as
suggested under Article 6 above.
Article 8.3 (b) introduces
measures against harmful
tax practices, including the
option of minimum taxes
on multinational
enterprises, but in a very
vague and unclear way
The Convention should include a comprehensive definition of harmful tax
practices that emphasizes the extraterritorial responsibilities and duty of all
States to prevent harms that their own policies and practices can create on the
effectiveness and fairness of the tax systems of other States. Furthermore, the
Convention should include a commitment by Parties to remove harmful tax
practices (not limited to multinational corporations), as well as a clear process
for identifying such practices – to be implemented by the Conference of the
Parties (COP). The Convention should also include provisions for responding
to non-cooperative jurisdictions (including those that do not join, or fail to
comply with, the Convention) and related sanctions. Lastly, a minimum
effective corporate tax rate should be introduced together with unitary taxation
with formulary apportionment (above under Article 4 bis (Equitable Taxation
of Multinational Enterprises).
Article 9 – Sustainable Development
Rather than proposing
precise and operational
commitments, actions and
mechanisms for delivery,
Article 9 simply restates
the top-line text contained
in the ToR
Introduce Articles to ensure a strong link between taxation and sustainable
development, as suggested below.
The link between taxation
and sustainable
development is missing
The Convention should include a commitment to ensure that fiscal systems are
fully in line with the UN Member States’ obligations
to progressively realize human rights to the maximum of their available
resources, inequality reduction and sustainable development, including the
achievement of relevant UN goals, obligations and commitments. This should
include specific mentions of the goal of reducing inequality within and among
countries; environmental protection, including action to mitigate, adapt and
respond to loss and damage from climate change and action to protect and
restore ecosystems and biodiversity; gender equality; financing quality
universal public services for all, such as education, health care and social
security; and the promotion of progressive tax systems. Furthermore, the
Convention should uphold a rights-based approach to taxation that
operationalizes the concept of gender-responsive taxation, including by
promoting the collection and analysis of gender-disaggregated tax data.

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The Article on Sustainable Development should create an obligation on each
Party to report regularly on its performance in relation to commitments under
the Article, in accordance with the different needs, priorities and capacities of
Parties (ToR para 9(a)). The reports should include a specific section on
potential negative spillover effects of the Party’s tax system on the capabilities
of other Parties to deliver sustainable development, either through domestic
resource mobilization or harmful incentives. The future Conference of the
Parties should also perform an overall review of the implementation of this
Article as a standing agenda item during each meeting.
Progressive environmental
taxation is missing
The Convention should include a sub-commitment, requiring Parties to deliver – both nationally and internationally – progressive environmental taxation, in
line with the polluter pays principle and Common but Differentiated
Responsibilities and Respective Capabilities (CBDR-RC), with a special focus
on actors that have an excessively large ecological footprint, including
polluting industries like multinational fossil fuel corporations and HNWIs. This
sub-commitment should be located under the overall commitment on tax and
sustainable development.
Connected to this sub-commitment, an international polluter pays mechanism
for multinational enterprises should be established. This should introduce an
internationally applied polluter pays tax on the global profits of polluting and
environmentally damaging industries, including but not limited to international
oil and gas corporations, and the revenues should be allocated to promoting
sustainable development, including related to the costs of loss and damage,
adaptation and a just socio-ecological transition in developing countries.
Details concerning the operationalization and implementation of this
mechanism should be agreed through future decisions of the Conference of
Parties (COP), achieving operationalization of the mechanism no later than the
end of 2028.
A specific commitment on
taxation of extractive
industries is missing
Add an Article with a specific commitment on taxation of extractive industries
to reflect the special circumstances related to this sector, and ensure effective
taxation of extractive industries in source countries. This commitment should
also include a reference to enabling diversification and the reduction of raw
mineral exports in line with climate commitments.
Article 10 – Prevention and Resolution of Tax Disputes
Article 10 entails potential
overlaps with Article 20 as
well as Protocol 2, and it is
unclear which disputes the
Article relates to, and why
special attention is given to
“investment and cross
border trade”
Clarify the role of Article 10 in relation to Article 20 and the 2nd Protocol.
Avoid introducing dispute resolution obligations without clarifying the legal
basis and the scope, including the issue of “disputes between whom” and
“about what”. Generally, the focus and mandate of the UN Tax Convention
would be to resolve disputes arising under the Convention itself, which will be
addressed under Article 20. Thus, the added value of Article 10 is questionable.

3. Cross-cutting specific comments on the draft text
Legal form – “agree” vs. “shall”: The draft text of 24 October predominantly uses the expression
“Parties agree”. The standard formulation in legally binding documents is “Parties shall”.
Solution – Legal form
Replace the wording “Parties agree” with “Parties shall”.
It is unclear why the draft text uses the term “State Parties”, as opposed to “Parties”. Especially
since some UN Conventions allow for Parties that are not States, it can have unforeseen consequences
if the provisions of the Convention only apply to “State Parties”. Furthermore, in general, the added
value of the word ”State” is very unclear. The term “State Parties” also deviates from the language of
the ToR which uses the term “Parties” (see ToR para 13).
Solution – “Parties” vs. “State Parties”
Change the term “State Parties” to “Parties” throughout the text.
References to taxation of multinational enterprises (MNEs) are scattered throughout the text.
The issue of taxation of MNEs currently seems to be addressed in Articles 4, 6.1, 7(a), 8 and 10, and
in some cases, it is unclear whether the text refers to taxation of MNEs and/or other actors.
Solution – References to MNE taxation
Introduce an Article on Equitable Taxation of Multinational Enterprises (which is the term used in
the ToR para 10(a)), to allow the issue of taxation of MNEs to be addressed in a clear and coherent
manner.
References to “information exchange” are scattered throughout the text, and yet there is no
proposal for multilateral solutions. In the current draft, information exchange is mentioned in
Articles 5.1, 5.2, 6.1, 6.2, 7(b), 8.3(a) and 15, but none of these Articles contain any proposal for real
multilateral solutions to the current challenges, including the fact that many Member States lack
access to Automatic Information Exchange.
Solution – References to information exchange
Introduce specific Articles on key information exchange mechanisms, including a Global Asset
Register, Automatic Information Exchange and Beneficial Ownership Transparency. See specific
suggestions under Article 6 below.
The different needs, priorities and capacities of countries, including developing countries, are
not reflected in the text.
While paragraph 9(a) of the ToR stresses that the Convention “should fully consider the different
needs, priorities, and capacities of all countries, including developing countries, in particular
countries in special situations”, there is no reflection of this in the current draft. This principle must
be reflected across the Convention, including through special and differential treatment of developing
countries.
Solution – Different needs, priorities and capacities of countries
Integrate special and differential treatment of developing countries as a cross-cutting element in the
Convention, in line with the ToR para 9(a).
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4. Specific comments on the Articles in the draft text
Article 2 – Principles
The Principles will need to be further fleshed out. The current draft indicates that Article 2 on
Principles will be copied from the ToR. However, we believe that work is needed to flesh out the
principles outlined in the ToR to a form that is suitable for the Convention. For example, we believe it
is vital to add a principle on progressiveness and ensure that the principle on national sovereignty is
balanced with international cooperation (paragraph 9(b) of the ToR). The text relating to paragraph
9(b) should also be strengthened by recognizing the principle of prevention which establishes a
State’s responsibility to ensure that the activities within its jurisdiction or control do not cause damage
to, or reduce the rights of, other States. Additionally, while paragraph 9(f) of ToR references the
contribution to sustainable development, it should also integrate the polluter pays principle which is
broadly recognized in environmental law, in the Rio Declaration on Environment and Development
(principle 16), and national laws and regulations. In addition, the principle of Common But
Differentiated Responsibilities and Respective Capabilities (CBDR – RC) on the protection of the
environment should also be incorporated, acknowledging the different capabilities and differing
responsibilities of individual countries in addressing environmental challenges.
Further needs for revisions are likely to emerge during the negotiation of commitments.
Solution (Article 2) – Principles
Ensure that the section on principles of the Convention is revisited after the discussion about
commitments, recognizing the need for significant strengthening and further detail to be added to
the text contained in the ToR.
Article 4 – Fair Allocation of Taxing Rights
The issue of fair allocation of taxing rights should not be limited to MNEs. Paragraph 10 of the
ToR is written in a way whereby the aim to ensure a fair allocation of taxing rights includes, but is not
limited to, multinational enterprises (MNE). Article 4 seems focused on MNEs, and therefore misses
out on other elements such as allocation of taxing rights in relation to, for example, high-net worth
individuals and digital nomads.
Solution (Article 4) – Scope and fair allocation of taxing rights
Rather than trying to develop a “one size fits all” solution to fair allocation of taxing rights, the
issue should be integrated as a cross-cutting element, including in Article 5 on High-net worth
individuals, as well as a new separate Article on Equitable taxation of MNEs. Meanwhile, Article 4
can introduce a basic source country taxing right which can include the concept of “Significant
Economic Presence”, and apply broadly, “except as otherwise expressly provided in this
Convention and its Protocols”.
Article 4 does not actually entail allocation of taxing rights. Article 4 introduces a right for source
countries to tax income from business activities in their countries. While this is important, it is not the
same as actually allocating taxing rights, and it also does not amount to “equitable taxation of
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multinational enterprises” as foreseen in paragraph 10(a) of the ToR. It is also worth noting that
Article 4 does not protect against double-non-taxation. The only system that would be able to deliver
on the elements in para 10(a) is formulary apportionment. For more detail, see above below under
Article 4 bis (Equitable Taxation of Multinational Enterprises).
Solution (Article 4) – Ensuring real allocation of taxing rights
Add a specific Article on Equitable taxation of multinational enterprises, which introduces a
transition to unitary taxation with formulary apportionment. See suggested Article 4 bis.
Article 4 introduces a controversial part of the 2013 G20 approach to corporate taxation,
namely “value creation”, and provides an incomplete list of relevant factors to determine fair
allocation of taxing rights in relation to multinational enterprises.
Value creation
As noted in the June Issue Note for Workstream II: “some participants argued that “value creation”
has no independent economic meaning, but was a concept developed during the OECD/G20 BEPS
project to reflect both nexus and income allocation; as such, they argued that it may not be helpful in
establishing new nexus rules”. We agree, and we believe it is unhelpful to endorse this term in the
Convention.
Solution (Article 4) – The term “value creation”
The concept of “value creation” should be deleted.
Incomplete and unclear list of factors
The term “business activities” is unclear – the usual term is “economic activities”. While factors such
as “markets” and “revenues” seem highly relevant, it is unclear whether these would be the only
important factors in relation to ensuring a fair allocation of taxing rights for MNEs. For example, in
relation to extractive industries, we believe that other factors (such as assets) could be relevant. In
general, while Article 4 in the draft can serve to allow source-country gross taxation, it will not work
as the basis for a genuine allocation of taxing rights through formulary apportionment.
Solution (Article 4) – Factors for allocation of taxing rights
Article 4 should be kept very general and focus on introducing a basic source country taxing right
that applies “except as otherwise expressly provided in this Convention and its Protocols”. The
specific factors for allocation of taxing rights related to MNEs should be developed at a later stage,
as a part of formulary apportionment. It is also important to consider the option of introducing
different formulas for different types of economic activities. See suggested Article 4 bis.
New Article (4bis) Equitable Taxation of Multinational Enterprises
This proposed new Article relates to equitable taxation of multinational enterprises and fair allocation
of taxing rights (ToR para 10(a)), but is also relevant for transparency (ToR para 10(d)), addressing
tax-related illicit financial flows, including tax avoidance, as well as harmful tax practices (ToR para
10(e)), and effective prevention and resolution of tax disputes (ToR para 10(f)).
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Unitary taxation with formulary apportionment and a minimum effective corporate tax rate:
The only effective way to ensure a fair allocation of taxing rights related to multinational enterprises
(MNEs), as well as to combat tax-related illicit financial flows (including tax avoidance) and harmful
tax practices, is to replace the failed transfer pricing system. Instead of the current system, the
Convention should mandate the development and implementation of a new international corporate tax
system that taxes an MNE and its subsidiaries and related entities as a single entity, on the basis of
their global profit (also known as unitary taxation with formulary apportionment), supplemented by
the introduction of an ambitious minimum effective corporate tax rate. The new system should
include a balanced formula that fairly allocates taxing rights to countries on the basis of the level and
significance of economic activity that the corporation has in each country. This system should include
all corporate profits – including those that are not generated by service provision (i.e. the focus of
Workstream II). Thus, it should be addressed in Workstream I (the Convention).
New Article 4 bis – Equitable taxation of multinational enterprises
With reference to the ToR para 10(a), introduce an Article on Equitable Taxation of Multinational
Enterprises, in which Parties to the Convention decide to transition to unitary taxation with
formulary apportionment, supplemented by an ambitious minimum effective corporate tax rate.
While the Convention should contain the overall decision, mandate and timeline, the specific rules
to operationalize the decision can be developed by the future Conference of the Parties (COP)1.
This includes the specific formula for allocating taxing rights, which should be informed by Public
Country-by-Country reporting (see below under Article 6) and agreed with a clause subjecting it to
regular reviews.
Article 5 – High-net worth individuals
Article 5 – Overall: This component is vital for reducing inequalities within and between countries,
strengthening the social contract and the fairness of tax systems, addressing the excessively large
ecological footprints of HNWIs, and mobilizing revenue for sustainable development. However, the
draft text lacks specific multilateral solutions to combat international tax abuse by HNWIs, including
a Global Asset Registry and Automatic Exchange of Information (see also below under Article 6).
Moreover, the draft text does not develop the second objective – ensuring effective taxation of
HNWIs. While it foresees the adoption of “coordinated approaches”, it does not provide any specific
solutions, neither national nor global, and does not contain any provisions related to the fair allocation
of taxing rights between countries. The text also does not include any international mechanisms, such
as a minimum tax on HNWI.
Article 5.1 and 5.2 – tax avoidance and evasion of HNWIs – lack multilateral solutions: Both of
these paragraphs relate to collection and exchange of information with the aim of combating tax abuse
by HNWIs. However, as noted below (under Article 6), the draft text fails to introduce truly
1With a clear mandate from the Convention, it is fully possible for the COP to make important decisions, such
as regarding the formula for apportionment. However, if there is a broadly held view among Member States that
the formula should be adopted through a ratifiable agreement, there is also the option of either a protocol or an
amendment to the Convention (for example in the form of an Annex to the Convention). Compared to COP
decisions, ratifiable agreements require a significantly longer and more demanding process, and such decisions
would therefore also be less flexible and more difficult to update regularly.
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multilateral solutions to the current challenges related to exchange of information – including the fact
that many Member States do not have access to automatic information exchange.
It is positive that the draft notes the importance of including information on “additional types of assets
and instruments”, but it is unclear what is meant by “as such exchange becomes feasible”.
It is also positive that the draft covers “structures and techniques by taxpayers, advisors and
intermediaries”. However, this wording overlaps somewhat with the wording suggested in 7b) (on
Illicit financial flows). Furthermore, it is not related to any multilateral mechanism that would ensure
that such information exchange becomes effective and automatic.
Solution (Article 5) – Tax evasion and avoidance by HNWIs
Introduce Articles related to the establishment of a Global Asset Registry and Automatic Exchange
of Information (see below under Article 6). These Articles should include the points related to
covering “additional types of assets and instruments”. The element of “structures and techniques by
taxpayers, advisors and intermediaries” should also be included, and a specific reference to
techniques applied through shell companies could be added.
The current overlaps between Article 5 and 7 should be resolved in a way that ensures that the
Convention addresses “structures and techniques” used by both HNWIs and multinational
enterprises.

Article 5.3 – effective taxation of HNWIs – is not operational: It is positive that this article
foresees the adoption of “coordinated approaches to ensuring effective taxation” of HNWIs. However,
for this article to become operational, much more substance would be needed. Furthermore, the issue
of fair allocation of taxing rights between countries must be addressed, and in addition to coordinated
national approaches, a multilateral mechanism related to taxation of HNWIs must also be included.
This is vital for reducing inequalities within and between countries, strengthening the social contract
and the fairness of tax systems, addressing the excessively large ecological footprints of HNWIs, their
ecological debt, and mobilizing revenue for sustainable development.
Lastly, the draft fails to mention key tools such as exit taxes and minimum post-departure tax
liabilities.
Solution (Article 5) – Effective taxation of HNWIs
Article 5.3 must be further elaborated. This includes outlining a process to identify HNWIs, both
within countries (based on nationally specific thresholds), and at the global level. The Global Asset
Register (see below under Article 6) will be essential in this context, including by identifying the
true – beneficial – owners of assets.
Furthermore, in accordance with 10(b) of the ToR, the Convention must operationalize the
commitment to ensure “effective taxation” of the identified HNWI, including both approaches to be
coordinated between Member States as well as international components, including a global
minimum tax. This should include a commitment to delivering progressively higher tax rates for
HNWIs, with revenues channeled toward sustainable development. It also includes measures to
ensure compliance and effectiveness, including exit taxes and minimum post-departure tax
liabilities.
The approach to taxing HNWIs should ultimately be anchored in the objective of establishing an
“international tax system for sustainable development” (ToR para 7(c)), as outlined by the 2030
Agenda and the principle of common but differentiated responsibilities and respective capabilities,
which includes tackling inequalities within and between countries, addressing ecological debt, and
mobilizing financing for pressing environmental and social needs, and thereby ensuring that the
implementation of a global minimum tax directly contributes to sustainable development outcomes.
For the world’s wealthiest HNWIs, it should also be recognized that none of their existing wealth
stocks originated solely from their country of residence, and the taxing rights to such wealth must
include an international component, anchored in the objective of reducing inequalities and
promoting sustainable development.
Article 6 – Mutual Administrative Assistance
Article 6 – Overall – fails to respond effectively to the components related to information
exchange and transparency:
➢ This Article relates to para 10(d) of the ToR, but fails to respond effectively to the
components related to information exchange and transparency, which are both explicitly
mentioned in the para.
➢ The element of “transparency” is very important the for success of the UN Tax Convention
and in addition to the commitment in para 10(d), the terms is also clearly included in the ToR
Objective (para 7(c)). However, the draft text is now limited to a brief and vague mention of
the Parties agreeing to “identify and eliminate administrative barriers”, and Article 6.3
explicitly rules out public transparency for a broad range of information. Furthermore, the
Article introduces a right for supplying Parties to introduce restrictions related to the
information provided, which is highly problematic.
➢ Furthermore, both in relation to information exchange and transparency, there are no
proposals for multilateral solutions.
Solution (Article 6) – Overall
In line with para 10(d) from the ToR, change the title of the Article to “Mutual Administrative
Assistance, Including Transparency and Exchange of Information”, and/or introduce additional
Articles to capture the key multilateral solutions outlined below, including a Global Asset Register
(GAR), Automatic Information Exchange (AIE), Public Beneficial Ownership Registers (BO) and
Public Country-by-Country Reporting (CBCR).
These key Articles could be designed in a manner that supports the implementation of other tax
measures raised in the Convention, including unitary taxation of multinational enterprises and
effective taxation of high-net worth individuals.
Global asset register: A global asset register (GAR), which includes beneficial ownership
information, is vital for effective taxation of international actors, including high-net worth individuals.
It is also an essential tool in the fight against illicit financial flows, including tax evasion and
avoidance. A comprehensive GAR should be established under the Convention and include both
publicly-accessible sections, as well as non-public sections with confidential information that is only
accessible to relevant authorities such as tax authorities.
The GAR should be defined therein as a comprehensive global register that links all types of assets
(physical and financial), companies, and other legal vehicles used to own assets, to their beneficial
owners. The GAR should also introduce a mechanism for consolidating and verifying asset-ownership
information, and provide the basis for identifying high-net worth individuals – both on a country
specific basis and at the international level. Furthermore, the GAR should ensure Automatic
Information Exchange between the Parties to the Convention.
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To ensure the GAR is both feasible and of high utility, Parties should commit to effective
implementation of beneficial ownership reforms domestically (see below). Minimum standards of
implementation should be established to ensure domestic registers serve as a reliable source of
information for GAR.
Solution (Article 6) – Global asset register
Introduce an Article in the Convention that establishes a UN Global Asset Register that links all
types of assets, companies, and other legal vehicles used to own assets, to their beneficial owners.
The GAR should build on domestic implementation of beneficial ownership transparency reforms
for legal vehicles and assets, and guarantee automatic exchange of information among all Parties to
the Convention (see below).
Automatic information exchange: While it is broadly recognized that automatic information
exchange (AIE) is essential for an effective domestic tax system, many countries do not currently
have access to AIE, and this issue is currently completely absent from the draft text. The Convention
must introduce an AIE system that ensures that all signatories to the Convention provide automatic
information exchange to all other Parties on an equal footing – as long as the receiving Party complies
with data protection requirements to be agreed under the Convention. The AIE system should ensure
real time access to information that is exchanged, as opposed to the current AIE system under which
information is only exchanged periodically.
Furthermore, recognizing that some developing countries currently lack the capacity to collect and
provide information to other countries, the Convention must include a transition period during which
those countries can receive information on a non-reciprocal basis. Lastly, the Convention should
include a commitment to transfer of technology from developed to developing countries, including
relevant data protection systems.
The beneficial ownership information which not covered by the publicly accessible sections of the
GAR (see above and below) should be exchanged automatically between Parties through the GAR
and, where possible, rely on the interconnection of existing information that can be drawn from
national and subnational registers of legal vehicles and assets.
Solution (Article 6) – Automatic information exchange
Add an Article in the Convention that introduces automatic information exchange on the basis of a
commonly agreed standard as a part of the UN Global Asset Register. The standard should ensure
that all Parties can get access to AIE on an equal footing, and include a transition phase with non
reciprocal information exchange for developing countries with low capacity.
Public beneficial ownership registers of legal vehicles at national level, and connected to the
Global Asset Register: Anonymous companies, trusts and similar structures constitute a key
challenge in the fight against illicit financial flows, including tax evasion and avoidance, as well as in
relation to effective taxation of international actors, including high-net worth individuals. The solution
to this is to provide transparency around the real – beneficial – owners of such structures.
In the outcome document from the 4th Financing for Development Conference – the Compromiso de
Sevilla – the UN Member States stated that: “(…) We will implement effective domestic beneficial
ownership registries with high quality and standardized information, consistent with international
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standards (…) and consider the feasibility and utility of a global beneficial ownership registry.”
(paragraph 28(g))
Understanding the ownership of companies and other legal vehicles such as trusts is essential to
enable effective taxation, and domestic beneficial ownership registers of companies and other legal
vehicles are a key solution. The Convention should include a commitment to introduce such registers
based on commonly agreed standards, as well as for the information to be shared and interconnected
transnationally as part of the larger Global Asset Register. In line with the recognition of the different
needs, priorities and capacities of countries, including developing countries (ToR para 9(a)), the
standard should include different requirements and implementation timelines for developing
countries.
The public should have access to key data allowing for the identification of the beneficial owners of
companies, trusts and similar structures, while sensitive data (such as tax identification numbers)
should be kept confidential, but accessible to all relevant competent authorities.
Solution (Article 6) – Public beneficial ownership registers
Introduce an Article on beneficial ownership transparency, requiring implementation of national
beneficial ownership registers of companies and other legal vehicles, adhering to commonly agreed
standards so that this information can be incorporated into the UN Global Asset Register.
Article 6.3 explicitly rules out public transparency for all information related to Articles 5 and 6,
and introduces a right for supplying Parties to introduce restrictions related to the information
provided. This is highly problematic, and results in an information exchange regime that is
substantially less ambitious than existing systems introduced over a decade ago, which entail
“automatic” information exchange based on a commonly agreed standard (as opposed to restrictions
determined by the supplying jurisdiction). As explained above and below, it is also important that
transparency includes information that is available to the public – including in relation to CBC reports
and information about the true – beneficial – owners of companies and similar structures.
Solution (Article 6) – Public transparency and supplier country restrictions
Introduce specific Articles on key transparency mechanisms, including Public Country-by-Country
Reporting, a Global Asset Register, Automatic Information Exchange and Beneficial Ownership
Transparency based on commonly agreed standards and multilateral solutions. For non-public
information, information exchange should be based on a joint standard to be developed by the
COP, and takes into account the needs and realities of all countries.
Public Country-by-Country Reporting:
Public Country-by-Country reporting (CBCR), including publication of individual CBC reports, is
essential for ensuring fairness in allocation of taxing rights, combating illicit financial flows and
promoting transparency. Providing full public transparency around where multinational corporations
do business and how much they pay in taxes in each country is also vital for enhancing the legitimacy,
certainty and fairness of international tax rules – in line with the objective outlined in the ToR (para
7(c)).
In the outcome document from the 4th Financing for Development Conference – the Compromiso de
Sevilla – the UN Member States stated that: “We will work to strengthen country-by-country
reporting of multinational enterprises, when applicable, including further evaluating the creation of a
central public database for country-by-country reports.” (paragraph 28(f)). The UN Tax Convention
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is the key place to deliver on that promise and establish a central public database for CBC reports.
Furthermore, since the information from CBC reports will be central for informing the decision
making on corporate tax matters under the Convention (including the formula for formulary
apportionment), public CBCR must be included in the Convention in a way that allows the provisions
to be operational immediately after the Convention enters into force.
Solution (Article 6) – Public Country-by-Country reporting
Introduce an Article on “Public Country-by-Country reporting”, which includes a central public
database for CBC reports and is specific enough to be fully operational shortly after the entry into
force of the Convention.
Article 7 – Illicit Financial Flows, Tax Avoidance and Tax Evasion
Article 7a) lacks real operational solutions. The paragraph mentions tools and international
cooperation to address illicit financial flows (IFFs), including “transparent reporting standards”, but
does not provide enough information to be operational, and does not provide any real multilateral
solutions.
Solution (Article 7) – Illicit financial flows
Introduce key multilateral solutions that can provide effective solutions to IFFs. See also above
under Article 4 bis (Equitable taxation of multinational enterprises), Article 5 (High-net worth
individuals) and Article 6 (transparency).
Article 7(b) on structures and techniques used by taxpayers to avoid and evade taxes partially
overlaps with Article 5.2 and lacks a multilateral solution. For HNWIs (but not for multinational
enterprises), this paragraph would overlap with Article 5.2, which includes a more specific wording –
namely “structures and techniques by taxpayers, advisors and intermediaries”. Rather than having two
duplicative paragraphs, it would make more sense to create one commitment to ensuring information
exchange about structures and techniques developed and used by taxpayers, advisors and
intermediaries. As noted in the comment to Article 5.2, it is also important to ensure that such
information exchange is linked to a multilateral solution – not least to ensure that the information
exchange becomes effective and automatic.
Solution (Article 7) – Structures and techniques used for tax abuse
Integrate exchange of information related to “structures and techniques developed and used by
taxpayers, advisors and intermediaries” into separate Articles on a Global Asset Register and
Automatic Information Exchange, and ensure that this exchange includes both individuals and
multinational enterprises.
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Article 8 – Harmful Tax Practices
Article 8.1 places special emphasis on harmful tax practices (HTPs) related to multinational
enterprises. However, HTPs are highly relevant in relation to other types of taxpayers too, including
HNWIs.
Solution (Article 8) – Scope of Article 8 on harmful tax practices
Expand the scope of Article 8.1 to cover all types of actors that can engage in international tax
abuse.
Article 8.2 addresses tax incentives, but leaves out the issue of public transparency. The scope of
the Article should also be expanded to include all types of tax incentives, and should include a
commitment by Parties to publish information on tax incentives and the related costs to society in
terms of foregone revenue.
Solution (Article 8) – Tax incentives
Expand the scope of Article 8.2 to cover all types of tax incentives and introduce public
transparency.
Article 8.3 (a) introduces language that could indicate Public Country-by-Country reporting,
but in a form that is very vague, unclear, not public and not linked to a multilateral standard or
mechanism.
Solution (Article 8) – References to country-by-country reporting
Introduce a specific Article on Public Country-by-Country reporting as suggested under Article 6
above.
Article 8.3 (b) introduces measures against harmful tax practices, including the option of
minimum taxes on multinational enterprises, but in a very vague and unclear way. The language
on measures against HTPs, including minimum taxes on multinational enterprises, is very vague,
unclear, and only limited to “jurisdictions with harmful tax practices”. It is also very unclear what the
criteria for “harmful tax practices” would be, and how it would be determined whether a jurisdiction
has such practices.
Solution (Article 8) – Measures against harmful tax practices
The Convention should include a comprehensive definition of harmful tax practices that
emphasizes the extraterritorial responsibilities and duty of all States to prevent harms that their own
policies and practices can create on the effectiveness and fairness of the tax systems of other States.
Furthermore, the Convention should include a commitment by Parties to remove harmful tax
practices (not limited to multinational corporations), as well as a clear process for identifying such
practices – to be implemented by the Conference of the Parties (COP). The Convention should also
include provisions for responding to non-cooperative jurisdictions (including those that do not join,
or fail to comply with, the Convention) and related sanctions. Lastly, a minimum effective
corporate tax rate should be introduced together with unitary taxation with formulary
apportionment (above under Article 4 bis (Equitable Taxation of Multinational Enterprises).
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Article 9 – Sustainable Development
Rather than proposing precise and operational commitments, actions and mechanisms for
delivery, Article 9 simply restates the top-line text contained in the ToR. Despite the fact that the
ToR specifies the objective of establishing “an international tax system for sustainable development”,
the current Article on Sustainable Development in the draft text includes nothing but the top-line
commitment outlined in the ToR. However, this issue is vital for a successful outcome of the UN Tax
Convention negotiations. The Convention has a vital potential to unlock public revenues for social
and environmental action, reduce inequalities, and hold corporate and wealthy polluters to account for
their environmental damages, but the language in this Article needs to be much stronger and more
specific to seize this opportunity.
Solution (Article 9)– Sustainable development
Introduce Articles to ensure a strong link between taxation and sustainable development, as
suggested below.
The link between taxation and sustainable development is missing. The importance of linking
taxation and sustainable development was underlined in the Outcome Document of the 4th Financing
for Development Conference – the Compromiso de Sevilla – in which the Member States among
other things stressed that:
➢ “We will promote progressivity and efficiency across fiscal systems to address inequality and
increase revenue. We will promote progressive tax systems in countries, where applicable, and
enhance efforts to address tax evasion and avoidance by high-net worth individuals and ensure
their effective taxation, supported by international cooperation, while respecting national
sovereignty. We will also promote effective and equitable government spending.” (para 27(e));
➢ “We encourage effective taxation of natural resources…”. (para 27(f));
➢ “We will (…) advance discussions on gender responsive taxation.” (para 27(g));
➢ “We will promote the consideration of the environment, biodiversity, climate (…) in fiscal
programming in line with national circumstances, sustainable development priorities, and poverty
eradication strategies. While respecting national sovereignty, options may include (…) taxes on
environmental contamination and pollution.” (para 27(h));
➢ “We encourage countries to integrate financing of social protection systems and policies,
including floors…” (para 27(i)).
Solution (Article 9) – Links between taxation and sustainable development
The Convention should include a commitment to ensure that fiscal systems are fully in line with the
UN Member States’ obligations to progressively realize human rights to the maximum of their
available resources, inequality reduction and sustainable development, including the achievement
of relevant UN goals, obligations and commitments. This should include specific mentions of the
goal of reducing inequality within and among countries; environmental protection, including action
to mitigate, adapt and respond to loss and damage from climate change and action to protect and
restore ecosystems and biodiversity; gender equality; financing quality universal public services for
all, such as education, health care and social security; and the promotion of progressive tax
systems. Furthermore, the Convention should uphold a rights-based approach to taxation that
operationalizes the concept of gender-responsive taxation, including by promoting the collection
and analysis of gender-disaggregated tax data.
The Article on Sustainable Development should create an obligation on each Party to report
regularly on its performance in relation to commitments under the Article, in accordance with the
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different needs, priorities and capacities of Parties (ToR para 9(a)). The reports should include a
specific section on potential negative spillover effects of the Party’s tax system on the capabilities
of other Parties to deliver sustainable development, either through domestic resource mobilization
or harmful incentives. The future Conference of the Parties should also perform an overall review
of the implementation of this Article as a standing agenda item during each meeting.
Progressive environmental taxation is missing: Furthermore, the Convention has a very important
role to play on environmental taxation and tax cooperation, both as a contribution towards tackling
global environmental crises and to ensure that international initiatives are considered in an inclusive
forum where all countries can participate on an equal footing. Including these issues as a commitment
under the Convention can also ensure that the principles outlined in the ToR are applied to
environmental taxation, including when it comes to taking “a holistic, sustainable development
perspective that covers in a balanced and integrated manner economic, social and environmental
policy aspects”. The Convention should also incorporate key existing principles related to
international environmental law, including common but differentiated responsibilities and respective
capabilities, the polluter pays principle and the precautionary approach. The principle of progressivity
should also be imbedded, whereby corporations and individuals who are wealthier should have a
greater tax burden than those who are less wealthy.
Solution (Article 9) – Progressive environmental taxation
The Convention should include a sub-commitment, requiring Parties to deliver – both nationally
and internationally – progressive environmental taxation, in line with the polluter pays
principle and Common but Differentiated Responsibilities and Respective Capabilities (CBDR
RC), with a special focus on actors that have an excessively large ecological footprint, including
polluting industries like multinational fossil fuel corporations and HNWIs. This sub-commitment
should be located under the overall commitment on tax and sustainable development.
Connected to this sub-commitment, an international polluter pays mechanism for multinational
enterprises should be established. This should introduce an internationally applied polluter pays tax
on the global profits of polluting and environmentally damaging industries, including but not
limited to international oil and gas corporations, and the revenues should be allocated to promoting
sustainable development, including related to the costs of loss and damage, adaptation and a just
socio-ecological transition in developing countries. Details concerning the operationalization and
implementation of this mechanism should be agreed through future decisions of the Conference of
Parties (COP), achieving operationalization of the mechanism no later than the end of 2028.
A specific commitment on taxation of extractive industries is missing: The Africa Group has put
forward to proposal to add a specific commitment on taxation of extractives, but this is not currently
reflected in the draft. The taxation of extractive industries is a particularly important point for many
developing countries due to their economic importance, their high risk of illicit financial flows, the
difficulties related to valuation, and their unique impacts. Unlike most other economic activities,
extractive industries lead to a permanent loss of countries’ non-renewable resources, unavoidable
environmental degradation, and tend to crowd out other economic sectors (a phenomenon known as
the “Dutch Disease” or “Resource Curse”). The pursuit of decarbonization in response to the climate
emergency is expected to lead to significant increases in the demand, extraction and processing of
various transition minerals as well as natural gas. It is important that the Convention recognizes this in
alignment with both the Sevilla outcome document (para 27(f) and para 27 (h)) and the UNFCCC, and
ensures mechanisms for the effective taxation of extractive industries in source countries, where these
impacts are experienced.
Solution (Article 9) – Specific commitment on extractive industries
18
Add an Article with a specific commitment on taxation of extractive industries to reflect the special
circumstances related to this sector, and ensure effective taxation of extractive industries in source
countries. This commitment should also include a reference to enabling diversification and the
reduction of raw mineral exports in line with climate commitments.
Article 10 – Prevention and Resolution of Tax Disputes
Article 10 entails potential overlaps with Article 20 as well as Protocol 2, and it is unclear which
disputes the Article relates to, and why special attention is given to “investment and cross
border trade”. A key aim of the Convention overall should be to prevent international tax disputes
between Member States from arising in the first place by promoting international tax cooperation.
Furthermore, it is clear that the UN Tax Convention should include provisions to resolve disputes
arising under the Convention, but this is the focus of Article 20, and thus, it is unclear what the
purpose of Article 10 is.
While Article 10 brings in the term “effective measures”, it fails to clarify whom the “disputes” would
be between, and about what, including what the legal basis should be for resolving such disputes. It is
also very unclear why special attention should be given to “cross-border investment and cross-border
trade”.
Solution (Article 10) – Tax disputes and Article 10
Clarify the role of Article 10 in relation to Article 20 and the 2nd Protocol. Avoid introducing
dispute resolution obligations without clarifying the legal basis and the scope, including the issue of
“disputes between whom” and “about what”. Generally, the focus and mandate of the UN Tax
Convention would be to resolve disputes arising under the Convention itself, which will be
addressed under Article 20. Thus, the added value of Article 10 is questionable.
11.11.11
ActionAid International
Akina Mama wa Afrika (AMwA)
Alliance Sud
Alternative Information & Development Centre
Amnesty International
Asian Peoples’ Movement on Debt and Development
Attac Austria
Basic Education Teachers’ Union of Zambia (BETUZ)
BOTSWANA WATCH ORGANIZATION
Belgium
International
Uganda
Switzerland
South Africa
International
Philippines
Austria
Zambia
Botswana
19
Sierra Leone
Budget Advocacy Network (BAN)
CCFD – Terre Solidaire
Center for Economic and Social Rights (CESR)
CENTRE FOR TRADE POLICY AND DEVELOPMENT
Christian Aid
Civil Society For Poverty Reduction
CRASH – Coalition for Research and Action for Social Justice
and Human Dignity
European Network on Debt and Development (Eurodad)
Financial Justice Ireland
Financial Transparency Coalition
Finnish Development NGOs Fingo
Finnwatch ry
Global Alliance for Tax Justice (GATJ)
Global Call to Action Against Poverty (GCAP)
Global Campaign for Education (GCE)
Global Witness
Greenpeace International
Grupo Nacional de Presupuesto Público
INESC – Instituto de Estudos Socioeconômicos
Integrated Social Development Centre (ISODEC)
ISER – Initiative for Social and Economic Rights
Jesuit Centre for Theological Reflection
Latindadd
McGill Youth Advisory Delegatiin, MYAD
Norwegian Church Aid
Observatoire Tunisien de l’Economie
Open Ownership
Oxfam
Partners In Health
Polifa
France
International
Zambia
International
Zambia
Finland
Europe
Ireland
International
Finland
Finland
International
International
International
United Kingdom
International
Perú
Brazil
Ghana
Uganda
Zambia
America Latina
Canada
Norway
Tunisia
International
International
International
Finland
20
America Latina
Red de Género y Comercio
Red de Justicia fiscal de América Latina y el Caribe
Society for International Development (SID)
SOMO
Success Capital Africa
TAFJA Nepal
Tanzania young Feminist Movement
Tax Justice Network
Tax Justice Norway
TaxEd Alliance Nepal
Transparency International Zambia
War on Want
Women’s Environment and Development Organization
(WEDO)
Youth for Tax Justice Network
America Latina
International
The Netherlands
Botswana
Asia
Tanzania
International
Norway
Nepal / South Aisa
Zambia
United Kingdom
International
Uganda
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