A Kaleidoscope for an Equitable and just Future: Examining the Merits of the Draft Text of the United Nations Framework Convention on International Tax Cooperation

 Addressing entrenched inequalities permeating society, has been the concern of political justice.1 So though the term justice has assumed importance in the realm of political science, it is quite relevant to the study of various legal frameworks.2 The term ‘justice’ has also been used as a tool to assess the competency of a legal framework.3 Drawing on this premise, it would be opportune to appreciate the work of the international tax practitioners and scholars in assessing the competency of the international tax framework through the justice metric. For instance, Cess Peters, an international Tax scholar, identifies the need for the analysis of the existing international tax framework and principles to study the compatibility of these principles with the concepts derived from moral and political philosophy to the theory and practice of international income taxation.4 In the course of the understanding of the international tax framework, scholars opine that the policy makers should be rid of a purely functionalist approach and seek to move towards addressing a range of sociological, political and moral factors through the resultant mechanism. This is especially true since the recent developments in International Tax have sought to accommodate the economic, political , social and technical developments. One of the motivations of the international community is to further the development of the states. This issue is highlighted by identifying, one of the reasons for remedying the issues of the tax evasion has been the statistics, that identify that the states with lower income bear a higher loss from the global tax abuse.

For instance, States with a higher GDP experience tax losses amounting to 433 billion US Dollars that amounts to 9% of the average public health budgets, as opposed to the countries with a lower GDP that face losses of 47 billion US Dollars that constitute almost 49% of their average public health budgets.5 Considering the constraints and the costs of external funding, domestic resource mobilisation by the way of taxes is one of the most important means for the development of state capacity, maintaining macroeconomic stability and enabling the governments to make the required investments independent of external sources, for the developing countries.6 With the advent of the digital economy there have been new ways of sourcing income that has challenged the traditional concepts of taxation and international cooperation.7 The states have sought to maximise their national interests and attract investments through their tax and spending policies. This traditional norm has sought to exacerbate the area of international tax, since the states are grappling with the effective taxation of the taxpayers in the extremely globalised and digital landscape.

Though the present international tax system is not fundamentally flawed, for a long time that focus of the international tax system was on the allocation of taxing rights to the states and the mitigation of international double taxation. The area that has captured the attention of international tax scholars and policy makers in the present globalised world are the practicalities of income taxation in a globalised world.8 There has been particular focus on the eroding income tax bases of the states with a lot of resources being employed to consolidate the possible solutions to remedy this situation.

The Introduction of the UN Framework Convention

In an unanticipated turn of events, the UN sought to take a stand on the inclusiveness of the international tax regime.9 On the 30^th of December 2022, the United Nations General Assembly adopted a resolution in order to promote inclusive and effective tax cooperation.10 This resolution signalled the motivations of the UN to take the lead on the matters related to international tax.11  This resolution sought to solidify the commitments of the Addis Ababa Action Agenda of the Third International Conference on Financing for Development, that would allow the member states to scale up the international tax cooperation, in line with their national capacities.12 The December resolution launched an intergovernmental discussion at the UN on the manner in which the inclusiveness and the effectiveness of international cooperation could be strengthened.13

In August 2023, the UN Secretary-General released a report identifying the relevant legal instruments and multilateral arrangements in the area of International Tax, following consultations with States and stakeholders.14  With a number of states voting in favour of the framework convention it was adopted by a resolution of the General Assembly.15 The resolution sought to set up an ad hoc intergovernmental committee with the objective of drafting the Terms of Reference for the framework convention on International Tax Cooperation at the United Nations. The Terms of Reference were adopted by a General Assembly Resolution in 2024.16 This resolution also specifies that the work of the intergovernmental negotiating committee is to be finalised in the year 2027 which would be in time for the consideration at the 1^st quarter of the 82^nd session of the UN General Assembly. The Intergovernmental committee is set to meet in 2025, 2026 and 2027 for at least three substantive sessions per year.17 Leading up to the intergovernmental negotiating committee’s session in Nairobi, held from the 10^th to the 12^th of November 2025, the Co-Leads had consolidated a draft convention, that included draft articles that were tabled for discussion by the members.

The Need for a Framework Convention

The choice of the UN towards working towards a Framework Convention has received a lot of praise from the international community. This choice favours a framework convention over a comprehensive multilateral tax convention, the rationale behind this is that the latter is presumed to be untenable and unnecessary in the present political and economic landscape.18 Thus the Framework convention for International Tax Cooperation( hereinafter referred to as the UNFCITC) would be a binding multilateral agreement but would differ from a multilateral tax convention. The structure of this instrument would provide regulatory structures that would not directly regulate taxation.19 The manner in which the Framework Convention is sought to be designed is that, it is positioned to be a document that will be binding on the state parties that will define the aims and the principles that will guide the manner of the cooperation of the states in the area of international tax. It seeks to establish a platform for the states to discuss and develop in the further agreements. This structure is effective insofar as it provides for flexibility for the countries to opt in and out of various protocols with due regard to their administrative capabilities.20

The proposed convention would establish a new international tax architecture that would provide the countries of the global south with higher revenues and would curb the issues of aggressive profit shifting out of the countries.21 The preference for a framework convention is rooted in two key issues that are discussed in the SG report mentioned earlier, inclusivity and effectiveness in designing the institutional architecture.22 At this juncture, it is pertinent to note that the issue of effectiveness also has an implicit requirement for the new resultant framework convention to rationalise and if possible to reduce rather than increase the number of international organizations that are regulating international tax.23 This was a prevailing opinion from a number of submissions that were made to the INC in the context of the preparation of a Framework Convention. For instance, a number of state parties have advised that the work of the UN has to be informed by the expansive work undertaken by the OECD in the area of international tax.

The Framework Convention has sought to be drafted alongside two protocols. At the opening session of the 1^st Meeting of the Second Substantive Session of the INC on the Framework Convention on International Tax Cooperation, held on the 11^th of August 2025. The Chair opined that the two protocols, the first to be designed to regulate the taxation of the income derived from the provision of cross border services in an increasingly digitalised and globalised economy and the second protocol to combat the issues of the prevention and the resolution of tax disputes. Opening the floor for the discussion on these protocols, the Chair opined likened the working of these protocols to the ‘wheels that would drive the framework convention’. However, the states have raised concerns with the mechanism of the working of the protocols. The issues of the optionality of the protocols, with the issue of tax certainty.

Prising Through the Draft Text             

The draft text of the Framework Convention on International Tax released by the UN on the 24^th of October 2023, sought to codify some of the articles in detail ahead of the third round of negotiations in Nairobi from the 10^th to the 19^th of November 2025.24 The Draft convention seeks to codify the preliminary concern of the states for the fair allocation of taxing rights. In this context, Article 4 of the convention includes the metric for the fair allocation of taxing rights. An important objective of the UN multi-stakeholder discussion was the inclusion of the term ‘fair’, the underlying reason was in order to promote an inclusive framework consolidating the needs of the Global South⁴. The draft should try to incorporate the standards of fairness and equity⁵. However, the approach enshrined in the article is a marked departure from the extant norms under international tax law, because it gives taxing rights for every jurisdiction where business is conducted, in the explicit supposition: “where (…) markets are located and revenues are generated”. In other words, jurisdictions shall be allowed to tax, even if the value is not created there. This thus provides for larger taxing rights to the market jurisdictions thus quantifying the principle of fairness in a rule governing the international tax framework. This further strengthens that the UN Convention increases taxing rights, meaning it seeks to dismantle current protections against double taxation. The state parties have identified that the construction of Article 4 is problematic and vague since it does not capture the obligations of the states adequately. In this context, it is noted that though the committee to an extent sought to codify the term ‘fair’ in the form of a principle to regulate the working of the member states, the states have identified some areas for the committee to further solidify the rule and ensure tax certainty.

Article 5 of the Draft Framework Convention identifies the issue of the effective taxation of the HNWIs especially towards effective contribution to the DRM in the states. This concern was voiced by the states in the INC meetings that has been effectively captured by the Draft Article. However, the Article predicates the need for States to share information regarding structures or techniques used by HWNIs, necessitating the imperative for duplicitous mechanism, akin to the OECD’s Common Reporting Standard (CRS). With the US seemingly plugging out of the UN push on international tax cooperation, questions around the feasibility of taxing HNWIs, especially considering the Delaware dilemma have to be considered.

Draft Article 6 seeks to identify the concept of the ‘Mutual Administrative Assistance’, recognising the need for the effective implementation of Mutual Administrative Assistance to achieve the broader goal of Domestic Resource Mobilisation.  

Draft Article 7 seeks to regulate the concerns surrounding, ‘illicit financial flows, tax avoidance and tax evasion’. A significant hurdle to effective tax collection and revenue mobilisation has been identified to be the issue of illicit financial flows. In order to effectively codify the provision for the regulation of illicit financial flows, the draft article identifies the need for effective ‘state cooperation’ as the foundation for combating the issue of illicit financial flows.

The issue of ‘Harmful Tax Practices’ has been identified to be the source of the cause for undermining the ability of the states to collect taxes effectively. To codify a regulation in the Draft Convention, the Co-Leads sought to include this in Draft Article 8 of the Convention.

Article 9 marks the first effort of the UN towards legislating the issue of Sustainable Development that has stayed at the helm of international organisations over the last decade, especially following the efforts undertaken by the United Nations Framework Convention on Climate Change (UNFCCC).25 Article 10 of the draft Convention purposes the clandestine issue of ‘Prevention and Resolution of Tax Disputes.’ It identifies the speedy resolution of disputes as a precondition to the promotion of investment and trade.

Outlook for the Future

With an eye on the next decade of tax transformations, the United Nations Intergovernmental Committee’s Co-Leads must set out separate agenda items come the meetings in New York next February. A thorough examination of Articles 4 and 5, along with an appreciation of best practices for Article 6 is the need of the hour. The fulcrum of sustainable development notwithstanding, the Co-Leads and participating stakeholders must deliver a Convention that is both comprehensive and forward-looking, urgent yet respectful of public international law tenets. The ascertainment of protocols to streamline the work of the Committee should be a primary consideration. Similarly, the Co-Leads would do well to organize a series of pre-session consultations with stakeholders to identify concerns ahead of the session, and effectively set out a series of formal and informal consultations to uphold the troika of rationale, efficiency, and transparency in their tryst for a robust Convention.

* Mukesh Butani is the Managing Partner, Pranoy Goswami is a Senior Associate and Spandana Koona is  a Research Associate at BMR Legal Advocates, respectively.

• 1https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2762110
• 2Towards Global Tax Justice, Allevato and Anna E. di Filippo.
• 3Ibid.
• 4Ibid.
• 5https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2762110
• 6https://unctad.org/system/files/official-document/tdr2024ch5_en.pdf
• 7Ibid.
• 8Ibid.
• 9A UN Dawn for the International Tax Regime, Intertax Volume 52 Issue 2.
• 10UNGA Res 77/244 (77th sess., 30 December 2022) UN Doc A/RES/77/244.
• 11A UN Dawn for the International Tax Regime, Intertax Volume 52 Issue 2.
• 12UNGA Res 69/313 (69th sess., 27 July 2015) UN Doc A/RES/69/313.
• 13Council of the European Union, ‘Recommendation for a Council Decision authorising the negotiations at the United Nations for an agreement on the second Early Protocol to the United Nations Framework Convention on International Tax Cooperation and on any provision of the Framework Convention related to or affecting that Protocol, Report of Secretary-General of the European Commission’ (29 September 2025) COM (2025) 584.
• 14UNGA Res 78/235 (78th sess., 26 July 2023) UN Doc A/RES/78/235.
• 15UNGA Res 78/230 (78th sess., 28 December 2023) UN Doc A/RES/78/230.
• 16UNGA Res 79/235 (79th sess., 31 December 2024) UN Doc A/RES/79/235.
• 17Council of the European Union, ‘Recommendation for a Council Decision authorising the negotiations at the United Nations for an agreement on the second Early Protocol to the United Nations Framework Convention on International Tax Cooperation and on any provision of the Framework Convention related to or affecting that Protocol, Report of Secretary-General of the European Commission’ (29 September 2025) COM (2025) 584.
• 18A UN Dawn for the International Tax Regime, Intertax Volume 52 Issue 2.
• 19file:///D:/OneDrive%20-%20BMR%20Legal/Downloads/ssrn-4785381.pdf
• 20The UN Framework Convention: A once in a lifetime Opportunity, Volume 53 Issue 6 and 7.
• 21https://unctad.org/system/files/official-document/tdr2024ch5_en.pdf
• 22The design of a UN framework Convention on International Tax Cooperation – Sol Picciotto.
• 23Ibid.
• 24https://www.lexology.com/library/detail.aspx?g=6031eb6e-0c2a-4421-98be-68daeb0a3278
• 25https://www.lexology.com/library/detail.aspx?g=6031eb6e-0c2a-4421-98be-68daeb0a3278