(5th meeting) - Fifth Session of the Intergovernmental Negotiating Committee on the UN Framework Convention on International Tax Cooperation (INC Tax) - 3 to 13 August 2026

Good morning, distinguished delegates.
I can see from faces that we are all ready to get into business.
I won't waste too much of our time.
We started with Looking at harmful task practices yesterday, some delegates were able to make their comments.
We had a few who are outstanding who still needed to make comments.
So we will continue to give opportunity to both member states and stakeholders to take the floor and make their comments.
There's a thought that I believe I want to share, especially when it comes to harmful tax practices, and this is in my E Capac Cote.
As we discuss it, one of the things which we need to be looking at is, why do we even have something like that? Why is it that people prefer preferential states and other things? We know the reasons, but then Is it that there's no alternative revenue source or just maximization of revenue? For those might not have alternative sources, how can we as a collective, help them to get revenue sources that they can use for their development and at the same time deal with these practices? This one is just food for thought.
It's not something just something which I think we need to be looking at as we go along as we work together as a collective in terms of international tax cooperation.
So I would Um, as I said, the list from yesterday has gone off.
Member states who wanted to make interventions yesterday and haven't done so should please raise your flags, then we can continue this.
Thank you.
United Kingdom, please.
Thank you, Mr.
Colleague.
I'll be brief.
The UK, of course, supports cooperation to address harmful tax practices.
I just wanted to come in to say in line with what Belgium, Austria and many other delegations said yesterday, we agree the text should recognize existing international work.
Thank you.
Thank you.
Peru, please.
Which I? Thank you very much, Mr.
Colet.
If I may, I would like to provide comments on Article 7 and then move on to Article 8, just to take the floor once on Article 7, first of all, We know that the title of the article refers to tax related illicit financial flows, tax avoidance and tax evasion as differentiated concepts.
However, the definition of tax related illicit financial flows contained in Article 3 that we've addressed seems to also include the latter two, that is to say tax avoidance and tax evasion.
Therefore, we believe it is important to clarify whether these are independent terms or whether tax avoidance and tax evasion constitute components of the overall concept of tax related illicit financial flows.
That's one point for clarification.
Moreover, we would like to know what are the concrete hypotheticals that are covered under the concept of tax related illicit financial flows.
We think that having examples of what that covers would provide greater clarity to the scope of the obligation covered in this article.
Lastly, we note that the current wording establishes a general duty of cooperation and in that regard, we would like to have greater clarification about how that obligation would be fleshed out and what is specifically expected of states parties in complying with that provision.
On Article 8 on harmful tax practices, Peru recognizes the importance of strengthening international cooperation to counter harmful tax practices.
At the same time, however, our delegation notes that at the international level, there is already significant work on that subject being done by the Forum on harmful tax practices of the OECD.
In that regard, we would be grateful for clarification of what the specific gap is that Article 8 is trying to address and what would be the added value of the obligations proposed in the framework of the Convention.
Lastly, we believe it would also be useful to know how The work and evaluations already carried out by the Forum on harmful Tax Practices will be taken into account when looking at the content of this article by the countries that are participating in its implementation.
Thank you very much.
Thank you, Mauritius, please.
Thank you, colleague.
Very good morning everybody.
Let me also join other delegations in commending you to work across this draft.
You and the team that have work on this zero draft.
Now, coming to the article itself, which deals with harmful tax practices, which is an important issue that needs to be dealt with.
Now in terms of consistency, I'm just wondering whether the phrase at the international and regional level are really important.
So we might consider not having this version to be consistent with the formulation of other articles.
Now, the objectives that we've set ourselves through this article is to identify harmful tax practices.
Then to implement measures to deter such practices.
But then deterrence, I don't think it's enough, we need to think about the elimination of harmful tax practices.
Elimination or at most neutralization of the effect which we all know in terms of tax avoidance, through profit shifting, through base erosion.
These are known to everybody.
Now, which means that if the effect is about tax avoidance, it's about base erosion, So we are wondering whether we need the last part of the first paragraph starting with enabling all countries to tax income in accordance with their domestic laws and policies, which still when we consider the phrasing of this article is about corporation and then how cooperation will enable, you know, enable such a thing to happen.
So it might be a real challenge.
Now, the objective we speak about identification of harmful tax practices.
So how do we identify harmful tax practices? It leads us to another question is, what are harmful tax practices? So as we proceed in our work of it, it would be very important for us to clarify what are harmful tax practices? What are the features? What are the criteria that should be used in determination of harmful tax practices? I'm not speaking about a definition, but then I'm speaking about, you know, wordings that would help state parties to really be in a position to identify harmful tax practices.
Now, coming to the paragraph two, we speak about exploring.
I think this provision needs to be reinforced.
Instead of exploring, we may use the word adopt appropriate measures and tools to address harmful tax practices.
Coming to the part A, we speak about enhanced transparency.
And here, transparency is not about, you know, transparency about transparency.
It's not about structures, but it's about tax regimes, probably, uh, this is a qualification that we may need to think about so that everybody understands it properly, enhancing transparency about tax regimes which are, uh, you know, used by state parties by countries.
Now in terms of the monitoring, and who does monitoring, obviously, it's important because tax regimes, when they are established, it evolves over time, and therefore continuous monitoring of evolving tax regimes is important.
But then the question that we will have is who does sue and probably the conference of the parties or the Secretariat, or the subsidiary that's going to be established.
But then I sense that it's more something that needs to be dealt with by the conference of the parties.
So this is a bit the points that we have at this point in time, colleague.
And let me add that we are in support.
We are in alignment with the points made by the Africa group by previous speakers that have spoken on behalf of the Africa group.
Thank you.
Thank you.
Republic of Korea, please.
Thank you, Mr.
Colt, for giving me the floor.
Good morning to everybody.
Regarding Article 8, harmful tax practices, Korea recognizes the importance of international cooperation in identifying and addressing harmful tax practices.
That said, we share the concern expressed by Austria, UAE, Belgium, Singapore, Germany, Israel, and others yesterday regarding the relationship between this article and the extensive work already undertaken in other international fora.
Many jurisdictions have already committed significant resources to implementing established international standards in this area.
In this regard, we believe that it is important that the work under this convention build upon and complement existing frameworks rather than create overlapping or parallel standards and assessment mechanisms.
Such duplication could lead to inconsistent outcomes, additional administrative burdens, and reduced legal certainty.
Against this backdrop, we believe the work under this article should take into account the work of relevant international fora.
Make effective use of existing standards and mechanisms and focus more on addressing any remaining gaps.
We believe this approach would help promote coherence and avoid unnecessary duplication.
Thank you very much.
Thank you, Nori, please.
Thank you, Mr.
Cold, and good morning to all.
We appreciate the efforts that you and the Secretariat has put into drafting this article.
It's important that all countries are able to tax income according to their domestic and international law and policies, including taking measures to counter harmful tax practices.
We also appreciate that some of our proposals from the last session have been taken into account.
I think we can to a large extent echo the intervention of Peru just now.
And we note that defining the term harmful tax practices is a difficult exercise and will often depend on the facts and circumstances of any practice under scrutiny.
It also touches upon issues of tax sovereignty, and differences in tax systems that could rely on valid policy choices.
We need to draft this article carefully to allow for thorough discussion and ensure legal certainty.
Further, in line with our previous comments on the need to take into account the work of other fora and also in line, I think with a number of member states that have already touched upon this point.
Important to ensure that the efforts already made in this area are preserved and that we do not create competing standards and principles as this can create uncertainty and gaps that can be exploited and this would undermine the purpose of our work here.
We maintain that the commitment should remain at high level and be operationalized in protocols to the convention or other instruments or measures.
We therefore maintain our proposal from the previous session.
That proposal confirms the intention to cooperate to determine harmful tax practices and enables cooperation in numerous forms and formats, including enhancing existing measures and developing new ones as appropriate and without mandating specific outcomes or measures.
With respect to paragraph two, we appreciate the relevance of the messages that are listed.
However, we do not have a solid basis for prescribing these specific measures at the current point in time and listing specific measures without due consideration and analysis can also in the end be restrictive to what measures we will be able to explore going forward.
Thank you.
Thank you, Switzerland, please.
Good morning, distinguished colleagues.
I'll be brief, but still I would like to take the time to Thank you, Mr.
Colet and also the Secretariat for the work done and for having redrafted that provision in the right direction in our view.
Um, the provision as it stands now is fine in respect of the obligation it creates, which is the corporate.
We obviously support that like many of the preceding speakers.
However, we feel that the wording does not sufficiently take into account that common standards and principles are already applied by many countries.
We would see a possibility to accommodate that aspect through, for example, deleting the words to develop and apply common principles and standards and replace it by to apply and further develop common principles and standards.
This would take into account that the standards already exist and would at the same time still leave room for further refinement of the existing standards.
Thank you.
Thank you.
Jamaica, please.
Thank you.
Thank you very much Chair.
Chair, we do support the inclusion of an article 0N harmful tax practices, and we are aligned with others who have made the comment that there is need for a definition.
And currently, what happens is that in the current the existing regime.
Currently, jurisdictions that introduce practices that are harmful are held accountable by the FHTP.
What this Article 8 seems to be doing is transferring that monitoring role to each state.
And so if we are going to have a cohesive um, practice across jurisdictions.
I do believe that we need to have at least some kind of definition as well and some kind of guidance as to how we're going to hold each other accountable because it does appear that jurisdictions will have to be holding other jurisdictions accountable for introducing laws that are harmful to their own, um, their own countries.
And this then calls into question shared issue of resources.
And so I think that I don't know if the COP is expected to deal with these concerns, but I think that at the very least we ought to have a definition.
Thank you, Chair.
Thank you.
Can you please? Thank you, Cole.
I'll start by speaking on behalf of the 54 member states of the African group in relation to the proposal to have informal discussions around Article 5 of the Framework Convention.
We share the view that this is important for member states to discuss their various positions in drafting proposals during these negotiations.
The Africa Group welcomes and encourages such discussions with the aim of fulfilling the mandate given to this committee, and we are already undertaking such discussions.
At the same time, we are concerned that we have less than one year to finalize on these negotiations, and a majority of the articles of the Framework Convention are yet to be discussed or presented, even for the first time during these plenary meetings.
There is more to the Framework Convention than the commitments and we have to prioritize discussing these other articles.
Our position is that the committee needs to stick to the approved organization of work to ensure that we discuss all the scheduled articles.
This will also ensure that both member states and stakeholders are enabled to provide the written input on all the articles that have been scheduled for this session.
We would also not be in support of any framework convention discussions or informal informal discussions being held during sessions that have been scheduled for Workstream two or Workstream three, which happened during the fourth session.
Many member states have different delegates for each of the workstreams, meaning that there are many Workstream one delegates that would actually be leaving by the end of this week.
Holding any such discussions next week would infringe on the ability of member states being able to effectively contribute to such discussions.
Any informal discussions should therefore be properly planned for ahead of time and during the appropriate workstream negotiations, keeping in mind the little time we have left and the articles yet to be discussed.
I'll now speak in my national capacity in relation to Article 8 on harmful tax practices.
We align with the submission made by Zambia on behalf of the Africa group.
Once again, we note the watering down of the draft language in relation to the draft that we had previously in March, and we call for the adoption of more action oriented terms, which will ensure implementation of this commitment.
The draft submitted by the Africa Group in March allows broad commitment by member states to combat harmful tax practices, including through development or implementation of effective tools, through effective sharing of relevant information, and by introducing appropriate measures.
We also support the proposal to have the criteria for identifying and monitoring harmful tax practices to be established by the conference of the parties.
We have continually said that these negotiations originated from the lack of effectiveness and inclusivity of the existing mechanisms and frameworks.
Our mandate includes establishing fully inclusive and effective international tax cooperation, both in terms of substance and process.
We therefore do not support any calls for complementarity or conformity with existing frameworks and mechanisms.
Under paragraph one, we also support the deletion of the words at international and regional levels.
We don't think that this is necessary because what we are in pursuit of here is international tax cooperation, and having the words regional could probably lead to misalignment of the frameworks to be developed.
Thank you, colleague.
Thank you, France, please.
Thank you, Mr.
Cole, Chair.
Good morning, colleagues.
First of all, we would like to recall our commitment to international cooperation to combat harmful tax practices.
Like the majority of delegations who've spoken, we've identified two pitfalls with this article, the definition of what a harmful tax practice is, and also the question of the articulation of that with existing work that needs to be preserved.
These two points are not specific to this commitment, of course, and the, points that we've made in the previous weeks I think are also relevant here.
But we believe it is particularly important to make these points on this article given the real risk of negative effects if this is not taken into account and not properly aligned with work, which could, as has been underscored by other delegations, lead to duplication or a multiplication of efforts and to divergent norms.
Thank you.
Thank you, Japan, please.
Thank you, colleague, and good morning, everyone.
Japan agree with the importance of international cooperation in this area.
However, we have concerns that paragraph one states, Develop and apply common principles and standards.
We echo Switzerland in disregard and support their suggestion.
There are existing principles and standards regarding harmful tax practices, and we should avoid any overlaps or discrepancies with them.
Therefore, we align with others that we need to recognize and take into account the existing international cooperation and frameworks and work that are already done.
Thank you.
Thank you.
Nya, please.
Thank you so much, colleague, and good morning, colleagues.
I think what I could get from the room is the broad acceptance for this article, harmful task practices.
I would say something is harmful, then there are no better words to use.
We need to just find a way to eliminate it.
Riding on the submission and the position presented by the African group yesterday, I want to say that Nigeria, in addition to other members of the group, 44 in totality, will support this position.
I want to emphasize some very cogent and important issues that have also been stressed by the distinguished delegate from Kenya who has spoken a few moments before me.
Um, I think, if you look at the objective here, what we want to achieve is a common principle, common standards.
By the time you subject it to regional development, we are going to we in rules that will not be consistent with each other.
And like Kenya said, what we are developing is international.
So the phrase at international and regional level should give way.
We think we should take it out of that phrase.
Moreover, our draft has been submitted and we stand by that draft and we invite delegate to please take a good look at it and you will see merit in the drafting.
On the issue of um Inform informer that had been discussed.
That is we support the position presented on behalf of the African group.
We have a large number of articles that have yet to be discussed, and our position is that we should just go ahead and complete the agenda as haven't been agreed, and we can subject to the ratification by the Bureau the issue of inform informal could never be discussed because it is not only one article that I suppose that we may want to discuss in informal informal.
So at an appropriate time, we could therefore combine all of the relevant articles that require such session and we take them together as a bundle.
I've also heard concerns from colleagues on the existing works and not to avoid duplication and resources and a whole lot of issues or that have been already expressed in support of that.
It's a known fact that not all of us All not all delegations that are here under the UN umbrella are part of the development or membership of the organization that may have developed since the assisting instruments that are being referred to.
And so the umbrella of the UN is big enough to take everybody apart from the challenges that traditions are happening with the assisting instrument.
These were instrument that we are not a member of the organizations.
It was not developed by us.
We are not part of it and issues like that.
So for us, we look also at the terms of reference.
What did it say it didn't say we should adopt them.
So we do not support any suggestion that to adopt any existing instrument.
We believe that we should just go ahead and do what is like by developing an instrument that will be fit for purpose and will work for the betterment of all jurisdictions.
I thank you so much.
Thank you, Azerbijan, please.
Thank you very much, Mr.
Cold.
Azerbijan agrees to this principle overall.
However, Azerbijan, we propose that the purpose and scope of this article be defined more clearly.
Comprehensive international framework for addressing harmful tax practice already exists under BEPS actions and most of country has already been assessed under this framework.
Therefore, the implementation of this article should avoid duplicating existing standards, peer review process, and monitoring mechanism.
Article should also clarify the objective criteria for identifying a harmful tax practices.
A tax incentive or low tax rate should not by itself be considered harmful.
Assessment should take into account factors such as lack of transparency in fencing, absence of substantial economic activity, artificial profit shifting and erosion of another jurisdiction tax base.
This would preserve countries legitimate right to design tax policy and incentive consistent with their development priorities.
At the same time, developing countries should also receive technical assistance to evaluate provinial regimes, participate meaningfully in monitoring process, and implement agreed standards.
Thank you very much.
Thank you, Brazil, please.
Thank you, colleague.
Somehow we borrowed this expression from previous work and maybe regrettably, maybe we should have used a different expression, but that's a bit too late.
I see this article as something in between a principle and, a commitment to cooperate in one specific sub issue area in international taxation.
I would disagree with my colleagues that believe that we should define here.
I don't think that's the moment for a framework convention to define the terms of what harmful tax practice should mean.
Framework convention specifically, they should uh, be qualified by at least two characteristics, among others, clarity, et cetera, but they should have some resilience to the test of time and adaptability to how the situations will evolve.
The text as it shows, it it is protected or is in doubt, it's qualified by those characteristics.
I think it will resist to the test and it will help us to coordinate and to recognize a value or a principle that we should behave, take care, and pay attention to harmful tax practices.
Where it will be done and how it will be done, there are many possibilities, of course, that we have said it over and over and that harm It's not the case that we will disregard the work that has been done in other forums, but there are different strategies, how to reconcile those works or to expand the work or to interact, or even to have a subgroup here again to deal with it or to have a specific protocol.
There are so many options how to proceed in the future in this area.
In relation to the wording.
I also have some I also find it a bit strange to have the reference to regional level because regional in this context, I think it means international.
I think I have said that before, it's international and international at regional level, so it's a bit strange.
It's just a minor tweak.
And in relation to the reference to the last part of the first paragraph or paragraph, the reference to enabling all countries to tax income in accordance with their domestic laws and policies, we can find a different expression, but we are also amenable or agreeable to the current version.
So all in all, we support the draft.
It's possible to improve a bit, but it's a good direction when we don't think that it's necessary for the moment, and we should not try to define harmful tax practice or to circumscribe it to ring fenced regimes, for instance.
Thank you.
Thank you.
India, please.
Thank you, colleague.
We had taken the floor yesterday and we had made a suggestion on amending some of the language in paragraph one.
In fact, the suggestion that we made was exactly for this reason and especially so we had used one phrase in our suggestion, and that was non discriminatory basis.
In fact, that is why we have taken the floor today because there's been so much discussion around the issue of taking into account the existing work.
Now, I completely echo and agree with the point made by the distinguished delegate of Brazil.
That It is not that we have to simply follow what has been done in the past.
There has been a lot of work on different issues that is ongoing that has been done and simply because some work has been done, it is not that we cannot take up anything new.
At the same time, India also, as we go forward in discussion of this framework convention, there will be occasions when India will also say that we should not disregard the work done by certain for existing organizations.
Now, the way we look at it, the test is that how well developed is that work and how well has that work served the interest of its stakeholders.
If we are generally convinced that that work has, uh, served the interests of its stakeholders, uh, on a non discriminatory basis as well as it can for everyone, then I think that is something that we can take into account.
Now, speaking specifically in terms of harmful tax practices, these rules or this work has been going on for some years now and very often, There have been several developing countries, several countries at different places of the capacity spectrum.
They have entered the work and they've not had really a say in the rules of the game.
Therefore, if that is the situation, then I don't think that we should be confined by the work that has been done so far.
We take that into consideration.
In fact, our mandate is to take into consideration the work that has been done in the past, not simply adopt it and not have to do anything new.
That is not our mandate.
So therefore, especially in matters of harmful tax practices, where we will declare a certain practice, a something that is harmful in respect of another tax jurisdiction, another jurisdiction, that is something we should be very careful about.
Sometimes different capacities can give an impression that a certain regime or a certain practice is harmful.
So therefore, we have to ensure that the rules are not such that they bring in subjectivity.
We agree that there is a point in what the distinguished delegate of Brazil said that this is probably not necessary to develop a definition on harmful tax practice.
Maybe that can be done, as and when we get down to negotiating a protocol on this matter.
But what we have to do over here is that we have to lay down conditions which will ensure that the work that we do, the practices that we adopt, they are non discriminatory.
They serve the interests of all the stakeholders, all member countries.
That is why it is not necessary for us to be simply bound by the work that has been done so far, especially in this matter.
Thank you.
Thank you, Portugal, please.
Thank you, Mr.
Cold.
I was hearing the delegates and the delegate of India and at the same time we think the same until a certain point that regarding an Article 8 with harmful tax practice.
Yes, this article should exist.
Regarding having in account the work that has been done in other fora.
At the same time, I think we all you should have to have in account that that work.
And The reason and I always think why.
I see the importance of that regarding some delegates for tax certainty, not to have two different criteria that could cause confusion and even thinking on tax administrations, they're going to work and states regarding tax policy which we are going to follow.
It's important to have a coordination and by coordination.
It's not building something completely new, but taking into account what we already build and trying to fill the gaps, trying to take into account the needs of different countries, but at the same time, not starting from zero.
Thank you very much.
Thank you, Zamia please.
Thank you, colleague, and good morning, fellow delegates.
Speaking on behalf of Zambia, I'd like to echo the submission and intervention made by Kenya on behalf of the Africa Group.
As regards the issue of the meeting on informal informals, whilst we appreciate that it's very key if we have to make progress to have such candid discussions in the informal informal, they are very key in resolving differences.
Our concern is on the limited time that we have in finalizing the work before us.
In this fifth session, we have a number of articles that we've never discussed before in any of the sessions.
Some of these articles that we are proposing for the informal informals, we've discussed them before and looking at the time, it is our view that we stick to the agenda before us so that we can have time in this session to discuss the new articles that we've never discussed before so that we make progress.
We still have the sixth session that will be coming through and therefore it is our view that we stick to this session, notwithstanding the importance of having the informal informers.
Again, on the issue of work done in other forests, concurring on the submission made by India, There's a lot of work that has been done in other forums, not only on harmful tax practices, exchange of information, MAP, and even in our mandate as the negotiating committee, we have the mandate to look at the other work done.
We are very reluctant and we don't agree that particular article should then make reference to other work done, but it's our understanding that in our approach, we need to take cognizance of work done in other forums.
We risk having a text which seems to endorse and adopt the work done in other forum and it assumes that every country in here is already a member of that fora, which is not the case.
But it's important to avoid duplication.
Things which are good are adopted, but make specific reference to that in a particular article.
It's something that we don't support, but we support as the mandate given to us, that we should take recognition of the work done and look at it and consider what can be adopted or not, I submit.
Thank you.
Aja please.
Thank you, Chairman.
First of all, we want to echo the statement by Zambi yesterday on behalf of the African group and also the interventions of Zambi and Kenya this morning.
As far as Article 8, This is a very important article.
We all agree on that.
Harmful tax practices are harmful for everyone, so it's in our common interest to join our efforts to combat them.
However, we were in favor of a more binding language in this article.
As far as taking into account what has already been done, it's clear that what is What is important for all states should be taken into consideration whether at the level of the Framework Convention or other international bodies.
It's if everyone supports it, it should be taken into consideration and it's already, in fact, mentioned in the terms of reference.
Thank you.
Thank you, Honduras, please.
Thank you for the floor, Mr.
Coley, I'm going to proceed and give my comments in Spanish, if it's okay with you.
Honduras is grateful for the work but the Secretariat shares the goal of strengthening international cooperation to address harmful tax practices.
Listening to the various interventions, we believe that the debate should not be seen as a decision between automatically adopting existing standards or developing a regime that is completely new.
In our view, the real analysis should be focused on determining whether the work undertaken up to now has demonstrated that it is effective, inclusive, and developed through transparent, nondiscriminatory processes where all states had a real chance to participate and contribute.
When these standards have met these terms, then obviously they can serve as an important reference for the work of this convention.
However, when there are gaps or when certain countries, especially developing countries have not had a chance to participate in equal conditions in elaborating those standards, this convention should offer a truly universal form an inclusive form to continue developing common principles and standards.
With this in mind, we agree with those who have stated that this article must maintain a high level must be of high level The convention should establish political engagements and the commitment to combat harmful tax practice as while preserving the necessary flexibility so that the conference of states parties can develop as appropriate technical criteria and guidelines or additional instruments that might become necessary.
Lastly, we believe that it would be useful to specify the goal of the article.
Beyond simply focusing on cooperation, the articles should specify that this cooperation seeks to prevent harmful tax practices.
Erosion in the taxation base of jurisdictions or distortion in international taxation while respecting the sovereign right of each state to define its own taxation system and its legitimate fiscal policies.
Thank you very much.
Thank you, Sweden, please.
Thank you for giving me the floor.
We believe that further clarification is needed to fully understand the specific shortcomings in the current system that this article may aim to address.
Identifying any gaps or shortcomings in the existing system will help us better to understand how we can ensure that this article focuses on issues without creating double standards or running parallel systems.
That may lead to increased administrative burdens and uncertainties for tax administrations and taxpayers that we should avoid.
We did therefore echo previous speakers that duplication of work needs to be avoided.
Thank you very much.
Thank you.
Thank you.
I don't see any more member states.
African Union, please.
Thank you, Cole for giving us the floor.
We align ourselves with a statement delivered by Kenya on behalf of the African group with regards to the call by some delegates for formal informal discussions.
As we need to finalize with haste all the draft articles within this framework convention, we suggest that time, we focus on finalizing the document.
We further align with the position highlighted yesterday by Zambia on behalf of the Africa group and this morning emphasized and elaborated more by Mauritius, Kenya, Nigeria, Zambia in its country capacity, and Algeria.
We wish to support these positions on Article 8 as we agree for the need for this article to address harmful tax practices to be a strong article.
We re emphasize the proposal to remove the wording at the beginning that states at international and regional levels.
I submit, thank you, colleague.
Thank you.
Osman, please.
Thank you, colleague.
My name is Am Lingoo and I deliver this intervention on behalf of Oxfam, the Africa Civil Society Working Group on the UN Tax Convention, and the wider Civil Society group coordinated by the Global Alliance for Tax Justice.
We welcome the inclusion in paragraph one of cooperation to develop common principles and standards to identify and deter harmful tax practices.
We are, however, concerned about the reference to regional as regional approaches vary and the standards of one region may be discriminatory against other states from different regions.
International approaches to tackling harmful tax practices are needed to avoid distortions between various approaches and definitions of harmful tax practices.
For this reason, we call for its deletion.
Additionally, we are concerned about the lower level of ambition in this draft.
The article remains with fewer operational commitments, thus reducing its effectiveness in addressing harmful tax practices.
In particular, paragraph two has moved away from commitments to develop, enhance, and implement effective tools and instead calls on state parties to merely explore appropriate measures and tools.
We also note an inconsistency between these two paragraphs.
While paragraph one commits to state parties to develop common principles and standards, paragraph two adopts a less ambitious approach.
We encourage the strengthening of paragraph two so that it complements rather than weakens the commitments established in paragraph one.
Transparency remains fundamental to tackling harmful tax practices.
We therefore reiterate the importance of establishing public country by country reporting in line with the principles of transparency and accountability of all taxpayers.
This is not a new proposal and has been previously forwarded by the Af Group.
We further encourage clarifying that harmful tax practices extend beyond corporate taxation.
Preferential tax regimes designed to attract the wealth of high net worth individuals can equally undermine domestic resource mobilization, fuel inequality, and erode the tax basis of other jurisdictions.
This article should therefore reflect this broader understanding of harmful tax practices.
Finally, minimum taxation should be situated within the broader objective of building a fairer and progressive international tax architecture, including through unitary approaches to the taxation of multinational enterprises.
Such reforms would be essential to reducing harmful tax competition and ensuring that taxing rights better reflect genuine economic activity.
We therefore encourage state parties to strengthen Article 8 by restoring its level of ambition, reinforcing its implementation commitments and equipping states with the practical tools to effectively identify, deter, and address harmful tax practices.
Thank you, Chair.
Thank you.
Staff Afca, please.
Thank you, Cola.
South Africa would like to take this opportunity to align ourselves with the statement made by Zambia yesterday and by the representative of Kenya this morning.
We want to actually zoom in on two issues which were discussed this morning regarding the informs informals.
We want to underline that when our delegations came here, we came here with the view of going through the entire document.
So far we note that today is Wednesday we're left with two days to go through the document, meaning that we do not have sufficient time to allocate to the informs informals.
Um, so we would like to underline that it is important that we go through the entire document with a view of identifying those articles that we will discuss in informance and for when the time permits.
But for now, let's prioritize the entire document.
The second issue relates to many comments that have been made regarding duplication of work, We as South Africa, want to underscore again what the African group has said and the delegation of India who ably said that we have to identify the gaps.
That is why we have the terms of reference of what guides us as to what it is that we want to achieve Our view is that we are here to develop an instrument that will have universal acceptance and universal participation.
So we do not disregard work that is done elsewhere, but what is important is that we have participation by all member states of the UN and the product has to have universal acceptability and credibility and legitimacy, which we cannot say about other instruments which were not actually negotiated in this fashion.
So we submit Cola.
Thank you.
Thank you.
GMUN Foundation, please.
DMUN Foundation.
Please give them the mic.
Thank you for the floor.
My name is Alexa Dominique.
I serve as a representative for the Major Group Children and Youth and the DMUN as well as the Sustainable Development Gold ambassador for the UN Association of the United States under the UN Foundation.
I'm delivering this intervention on Article 8 on behalf of the financing Development Children Youth Constituency of the Major Group Children Youth.
We welcome the commitment to international and regional cooperation in identifying and addressing harmful tax practices.
Common principles can help protect national tax bases while respecting each state's sovereign right to determine its domestic tax policies.
To support consistent implementation, we encourage the development of clear and objective criteria for determining when a tax practice is harmful.
Relevant factors could include whether a measure facilitates profit shifting, lacking sufficient economic substance, provide preferential treatment without substantial economic activity, lacks transparency, restricts effective information exchange, or produces significant negative effects on the tax basis of other jurisdictions.
The assessment process should distinguish harmful practices from legitimate policy choices, including appropriately designed incentives supporting investment, research, employment, or sustainable development.
Evaluation should consider economic substance proportionality duration, fiscal costs, measurable policy outcomes, and cross border effects.
States should have an opportunity to provide information and respond to preliminary findings before a practice is formally designated as harmful.
Regarding paragraph two A, enhanced transparency could include the timely exchange of relevant tax rulings, accessible reporting on preferential regimes, beneficial ownership information, and disclosure of applicable eligibility and substance requirements.
These measures should include safeguards for confidential taxpayer and commercially sensitive information.
Regarding paragraph two B, monitoring should be continuous and forward looking.
A technical review mechanism could identify emerging risks associated with mobile intangible assets, digital platforms, crypto assets, remote business models, shell entities, and new forms of preferential treatment.
Reviews should use transparent methodologies and provide states with appropriate time to amend identified practices.
Regarding paragraph two C, the effective taxation of economic activities that benefit from harmful tax practices should be supported by clear nexus and allocation rules.
Coordinated and proportionate measures where appropriate and effective dispute prevention mechanisms, such measures should be consistently applied and designed to prevent both double taxation and non taxation while avoiding unnecessary compliance burdens.
To strengthen Article 8, we recommend that the text specify the common principles and standards should be based on objective and transparent criteria, including economic substance, cross border effects, and proportionality, while distinguishing harmful practices from legitimate domestic policy measures.
Paragraph two could further require appropriate confidentiality, data protection, and due process safeguards, as well as opportunity for effective states to respond to preliminary findings.
The text could also recognize the need for technical assistance and appropriate implementation periods, particularly for states with limited administrative capacity.
Revenue losses associated with harmful tax practices can reduce the fiscal space available for education, health care, employment, digital infrastructure, and social protection.
The major Group for Children youth therefore supports an approach that is transparent, evidence based, administratively feasible, and attentive to long term fiscal and intergenerational impacts.
We thank you.
Thank you, NRC, ICC before NRO.
ICC Mexico.
ICC Mexico.
Thank you.
Thank you, Chair.
Good morning.
ICC Mexico aligns itself with the statement delivered by ICC Global and appreciates the opportunity to contribute to the discussions on Article 7 and eight of the draft of the United Nations Framework Convention on International Tax Cooperation and its related protocols.
We support the objective of strengthening effective and inclusive international tax cooperation, as well as efforts to combat tax evasion, tax fraud, abusive practices, and illicit financial flows arising from unlawful conduct.
At the same time, we respectfully submit that the convention's long term success will depend on its ability to promote cooperation while preserving legal certainty, taxpayer safeguards, investment, and the effective functioning of existing international tax frameworks.
In connection with Article 7, tax related illicit financial flows, tax avoidance and tax evasion, which focuses on cooperation against tax related illicit financial flows, avoidance and tax evasion, its main significance lies in linking international cooperation, information exchange, and mutual administrative assistance to the protection of domestic tax base.
The provision may require, however, further clarification to distinguish between tax avoidance, tax evasion, and other illicit flows, and to ensure that enforcement tools are proportionate, consistent with domestic law, and accompanied by appropriate safeguards for confidentiality, due process, and taxpayer's rights.
The article should also define more precisely what constitutes a tax related illicit financial flow, how the jurisdiction whose tax base has been reduced will be identified, and what standards will govern evidence, information exchange, confidentiality, and remedies.
Further improvement would include safeguards to avoid overboard or excessive informance request and to ensure that cooperation does not conflict with domestic constitutional protections or treaty obligations.
It is our view that the convention should preserve a clear distinction between illegal conduct and lawful commercial arrangements.
ICC Mexico fully supports measures to address abusive tax practices and unlawful conduct.
However, concepts such as tax avoidance should not automatically be equated with illicit financial flows.
International and domestic practice generally distinguish between tax evasion, which is unlawful and tax avoidance, which is addressed through a specific anti abuse rules.
Preserving this distinction is important to avoid uncertainty and ensure consistent application of the convention.
Finally, in connection with Article 8, harmful tax practices, the concept of harmful tax practices should be defined with sufficient precision before creating binding obligations.
The provision refers to common principles and standards and to appropriate measures and tools, but does not define the criteria for identifying a harmful tax practice, the process for making that determination or the consequences for states and taxpayers.
To improve certainty, the article should require objective, transparent and consistent apply criteria, such as lack of substantial economic object activity, ring fencing, preferential treatment, non transparency, absence of effective exchange of information, or regimes that facilitate non taxation without genuine business purpose.
It should also clarify whether determinations will be made by the relevant parties, a technical body, a peer review, regional mechanisms, or for future protocols.
Procedural safeguards should be included such as notice, consultation, publications or criteria, opportunity for affected states to respond, transition periods, proportional countermeasures, and periodic review.
With these elements, without these elements, the provisions risk creating uncertainty for governments and taxpayers and could result in inconsistent or politically driven classifications of domestic tax measures as harmful.
We also note that there has been substantial work done on these matters and existing standards on harmful tax practices.
We thus therefore suggest considering those existing standards, making sure that there is certainty and clarity on the rules applicable to taxpayers.
Thank you very much, Chair.
Thank you.
I request that we limit our contributions to the 3 minutes that standard.
Unfortunately, ICC going way above that.
NTRL please.
Thank you, colleague.
Harmful tax practices undermine fair taxation and distorts economic decision making.
We also support an approach that builds on existing international work and allows for coordinated response that reflects different national circumstance.
We want to call attention that harmful tax breaks are closely related with tax incentives granted by states.
So it's necessary to emphasize the importance of preserving the legitimate role of tax incentives.
The objective should not be pro incentives, but promote smart ones transparent and substance based incentives that support generate investments and sustainable economic activity.
For this reason, We suggest including a paragraph about tax incentive to clarify that it should be linked with real investment activity or performance and should not be designed only to reduce tax liabilities or attracted profit without a corresponding economic crisis.
Their design and implementation should also respect transparency, non discrimination, and the rights and guarantees of taxpayers.
We respectfully invite the colleagues to consider Nav Tax research lab proposal in the further develop of Article 8.
Thank you.
Thank you.
Got it, please.
Thank you, co lead.
Ghana aligns with the position of the 54 member Africa group as presented by Zambia yesterday and the presentations further made today by Kenya, Nigeria, Algeria, South Africa, as well as India and others on the issue of Article 8 reflecting existing work done in other fora.
We echo the sentiment that given these existing systems and frameworks, firstly, are not inclusive of all member states and secondly, have failed to address the issues surrounding harmful tax practices, this underlines the reason why we are here currently developing an all inclusive framework to tackle the attendant issues.
To this end, we agree with taking out the words at international and regional levels, as this was already implied in the article.
Thank you, Chair.
Thank you.
ECBSYF please.
Thank you, Colleague.
My name is Bezic Branna Meso, speaking on behalf of the ECB Sustainable Youth Foundation.
We welcome Article 8 and recognize that harmful tax practices continue to undermine domestic resource mobilization and constrain countries abilities to finance sustainable development.
We offer three suggestions for consideration.
First, in paragraph one, we encourage clarifying that the common principles and standards should support the identification, assessment, and deterrence of harmful tax practices, including those that facilitate profit shifting, lack economic substance or undermine fair taxation.
Second, regarding paragraph two, Section B, we recommend including periodic review mechanisms and enhanced information sharing to ensure that emerging harmful tax practices, including those associated with evolving business models can be identified and addressed in a timely manner.
Third, regarding paragraph two Section C, we encourage adding language on capacity building and technical assistance for developing countries to strengthen the capacity of tax administrations and effectively implement those measures against harmful tax practices.
We believe these additions would strengthen the article by improving its effectiveness while ensuring equitable implementation across all states.
Thank you.
Thank you.
ICC, please.
Thank you, Mr.
Colead.
I will be brief with regard to Article 8, where we encourage alignment of the concept of harmful tax practices with existing internationally agreed and recognized standards.
This is vital to ensure both legal certainty and practicability for both taxpayers and tax administrations.
We also believe that it's important to distinguish, as that definition does, between on the one hand, opaque or ring fenced regimes that may undermine tax basis and on the other hand, transparent, non discriminatory substance based tax incentives which are designed to support investments, innovation, employment, and sustainable economic developments.
We see those incentives in small, open economies to your question, Mr.
Coheed that do not have the natural resources or people to otherwise impact on the global economy and to encourage investment in their infrastructure, or, for example, in larger economies to address market failures or gaps in their local economies.
Countries should retain appropriate policy space to pursue competitive but cooperative tax policies provided these are consistent with the principles of transparency, economic substance, and international cooperation.
Thank you, Mr.
Coheed.
Thank you, CFS, please.
Thank you, Colley.
Good morning.
There are two issues with Article 8.
Article 8 requires state parties to develop and apply common principles and standards to identify harmful tax practices, but the article must state what a harmful tax practice is because principles and standards of identification cannot supply that definition in the first place.
Without a definition, then the governing rules of the Vienna Convention on the Law of Treaties requires that interpretation then reach for the established reference point.
And the established reference point here is then the criteria on the forum for harmful tax practices, whose criteria catches the preferential regimes of only small jurisdictions and leave untouched the domestic regimes of larger economies that produce the same effects.
So I would be proposing a definition on harmful tax practice as a regime, a ruling, or an administrative practice, whether general or preferential in form that produces effective taxation substantially below the rate that would otherwise apply to comparable income.
Where that reduction is not matched by substantive economic activity in the granting state, the indicative factors could be drawn from the BEPS criteria, which should actually be non exhaustive and amendable by decision of the conference of state parties, which answers the concern that the definition will not hold over time.
Then assessments of Article 8 should also belong in peer review under that conference on the same terms for every party.
Then the second issue is what has fallen out of Article 8 going forward.
In the earlier October draft, I think, There was a requirement that tax incentives should be substance based and linked to investment or performance rather than to profit only.
That language should be restored back in Article 8.
Thank you.
Thank you, Stakeholder one.
Good morning and thank you for the floor, UN independent expert on foreign debt and international financial obligations.
I'd like to make six points and for two of the points, I would like to make reference to both Article 7 and eight and I will point to them.
I've heard member states speaking since yesterday, and I think there are certain things that we should keep in focus, and this is because I do come to this from a legal perspective.
What we have right now are groups of decisions with groups of countries in different mixes.
Sometimes we have decisions of 27 plus countries, sometimes 30, sometimes 30-40, sometimes 50, and sometimes 77, and now we are here where ideally we should be looking at well, the majority of the world.
Unfortunately, in each of these categories of states where decisions have been made, it means that on average you have over 100 not taken into consideration.
In that context, where I come to my second point, this treaty is supposed to focus on inequality, and we've also spent time looking at sustainable development and the question of international human rights, which has been placed in the principles already under Article 2.
Now, if we draw a line from that position into this particular article as well as the previous one, then what we start to see is a question about whether we're talking about illicit financial flows or harmful tax practices is the inequality measure is one of sustainable development.
The inequality measure will then be one of international human rights.
If that is the measure we are using, then the existing frameworks that are there do not actually answer that anyway, which makes this not a duplication.
Now, I've heard the argument about duplication.
So let's talk about the different sources that are in existence.
Whether we talk about the EU position, or we talk about FTA, or we talk about the untag statistics, At the end of the day, they are all there for a particular purpose or reason.
The purposes or reasons are already clearly stated within those particular documents or sets of rules.
Since they were set well before we came into this particular space, the question then becomes, what is the value of it? That is the decision that this assembly will have to decide.
The value of those sources of regulations and rules or laws or statistics.
And so what we're going to need going forward, I believe, is a consistency in approach in order that we can talk about arguability.
Again, this is because I come into this from a legal perspective.
And that takes me then to my fourth point, which is about consistency.
But then how do we determine harms? The harms would be of the poorest country in the world or the one that has been harmed the most.
That has to be the minimum value from which we are now moving upwards and higher.
We have to identify that.
The example I will give very briefly, which you're all aware of, some countries may have transfer pricing laws, but some don't.
Suddenly in one country, transfer pricing is legal and in another one, you can do whatever you want.
There is no illegality and that is a harm.
There's a bigger harm than when you don't have the law in place.
So my final point is, if we're going to look at this particular article as the perspective of a source of law and how we argue it if there is now a problem in court, for example, then what you are going to see is there is a need for us to not only understand and explain it, but we also have to interpret it, implement it, and understand its challenges.
And I think harmful tax practices is where a lot of legal issues come in and is really worth reflecting on further.
I thank you for the time.
Thank you.
United Republic of Tanzania, please.
Thank you, colleague.
Tanzania supports the position of the Afghan group delivered yesterday by Zambia on Article 8, which was supported by Ageria, Kenya, South Africa, Ghana, Nigeria, African Union, and others.
We also echo today's statement made by Kenya on informal informs, which was supported by other delegations.
On the informs proposal, Tada believe that much has already been said.
We therefore suggest that we remain focused so that we can use effectively the limited time and resources available to us.
On substance, Tada emphasizes the need to redraft the language so that it fully reflects our collective commitment to address harmful tax practices.
In this regard, we support wording such as develop, enhance, and implement effective tools and measures rather than the weaker language of explore appropriate measures and tools, Tanzania also supports the proposal to identify harmful tax practices based on criteria to be established by the conferences of parties.
I thank you.
Thank you.
And with that, we've come to my good friend Germany King.
Thank you, Mr.
Collid.
With regard to informal informals, this morning a position was repeatedly argued against that was not put forward at all.
Yes, it's true numerous delegations have spoken yesterday in favor of having informal informal, particularly with respect to Article 5.
In my impression, no one in this context expressed an intention or implied a desire to deviate from the current program of work or even to neglect or not to discuss other provisions of the draft.
It went without saying that holding these discussions would depend on whether time is available for this purpose either this week, next week, or in the coming sessions.
The only desire that expressed and the only meaning that can possibly derive from those requests was to deepen the discussions between delegations on Article 5 with an aim of gaining a better understanding of the respective positions in a more informal setting and identifying for the future work where and how a convergence of those positions could be achieved.
Thank you.
Thank you.
Stick with that two.
S two has been going on and off.
That's why I'm allowing stick two.
Please go I'm speaking on behalf of the Farance Foundation.
We spoke yesterday and today we are going to cover the practice of harmful tax practices.
There are a few points that we would like to put forward related to the weaknesses and anomalies following the entire text that does not precisely define what a harmful tax practice is.
This could lead to different interpretations from one country to the next.
Then we have what we call clear mechanisms, but no mechanisms other than sanctions, which is provided for in the text, which encourages cooperation, but does not stipulate the consequences for states that do not keep to their commitments.
Then we would like to underscore a few proposals.
We think we should clearly define harmful tax practices.
We think that there should be a follow up reporting and evaluation mechanism.
We think it is necessary to strengthen the mandatory nature of some provisions, and then also More attention needs to be paid to the capacities of developing countries or underdeveloped countries.
There is no provision for technical financial assistance or capacity building for states with limited resources.
Thank you.
Thank you, stakeholder.
We'll take a quick five minute break, then we come and continue.
Thank you.
Yes, please.
Thank you, sir.
Thank you.
Distinguished delegates, please take your seats.
We're about to start.
Please, let's settle down.
Let's settle down.
We don't have to make excuse that Okay.
We are welcome back from the break.
We now moving to Article 9.
Article 9, we had discussions on just before Nairoubi and then Nairobi too, but we stepped it down a bit to have some further discussions on it.
We've now come out with text which we believe we can all have a look at and whether it reflects what we want to do and whether it provides the basis for, whatever I want to do in the future.
And so I would open the floor for member states who want to comment on Article 9.
I think we all agree to what is there.
I don't see any requests for the floor.
Can we move on to Article 10.
Let's see.
Now I'm getting flags raised.
Zambia.
Thank you, Chair.
Speaking on behalf of Zambia Africa Group, firstly is to appreciate the work that has been done and the text provided before us in terms of the proposed text for Article 9, the prevention and resolution of tax disputes.
We see this as an anchor that will speak to protocol two.
Whilst we are happy with the text, it is our view that the text can still be enhanced in accordance with timelines given, we shall be giving our proposed text on this regard.
However, our initial comments as the Africa group is that the text can be further enhanced by Some redraft, the way it starts where we're talking in accordance with states needs and capacities and priorities, that comes out like an anchor and we think that can have some weaknesses in that for a state party to react or to deal with this commitment, they first have to look at their needs.
Whilst obviously the capacities are key, but we think this as a commitment, it needs to be more reinforced and therefore, it is our view that probably the paragraph should I The text itself, the article should be split into three paragraphs.
The first paragraph should probably read as the state parties shall take measures to ensure effective prevention and resolution of tax disputes so that it's more reinforced and it comes out as a key commitment.
We know that resolving of disputes in a timely manner and also providing tax attorneys are very key both for the tax authorities and the taxpayers.
Also, some points are creating taxity and therefore, I think the commitment should have that, um Hard law and soft language.
Paragraph two, U in furtherance of paragraph one, the state parties shall, among other measures, minimize the potential for disputes by providing clear and accessful legislation and interpretive guidance regarding tax obligations.
This is very important for the taxpayers to have access to that.
B, implement dispute resolutions, mechanisms that are fair, independent, accessible, and effective, resolving in a timely manner for both taxpayers and tax authorities involved is key.
But we also believe that there should be an anchor in terms of how the mechanism of u implementing this and that there should be a commitment to that effect.
Therefore, we propose paragraph three, which reads, The state parties shall develop guidance, protocols, or additional instruments as may be necessary for the effective implementation of this article.
It is our belief that the commitment should provide that mechanism of how the implementation should be done and obviously to be important that guidance is developed through either protocols or additional instruments that will help member states ensure that there is effective implementation of the prevention and resolution of tax disputes, I submit.
Thank you.
UAE, please.
Thank you, Co Chair.
The UAE supports the objective of preventing and resolving tax disputes and recognizes the importance of promoting certainty, transparency, and effective cooperation among member states.
The UE considers that the current drafting of paragraph one could benefit from further refinement.
In its current form, certain elements of the text may be open to subjective interpretations, which could result in inconsistent application across jurisdictions.
The UE therefore encouraged strengthening and clarifying the language of paragraph one to ensure that the article is implemented in a consistent, objective, and predictable manner by all member states.
With respect to paragraph two, we currently don't believe this is needed.
However, should delegations wish to retain the paragraph, we would welcome further clarification on a number of practical and implementation issues.
In particular, it would be helpful to clarify who would be responsible for determining whether domestic legislation and administrative guidance are sufficiently clear.
Given the potentially significant volume of legislation, regulations, and guidance material that would need to be reviewed, the UE believes it's important to establish clear responsibilities and realistic expectations regarding this implementation.
The UAE would also appreciate further clarification regarding the assessment of the effectiveness of subparagraph B, including the criteria that would need to be applied and who will be responsible for undertaking those evaluations.
The UAE notes that substantial work has already been undertaken in other international forums on issues relating to dispute prevention, tax certainty, and administrative transparency.
In our view, it is important that the development of this article retains coherence with existing international efforts, avoids duplication, and focuses on identifying and addressing genuine gaps where further work may be required.
We would also welcome further clarification in terms of how this article will interact with the work on Workstream three.
Thank you.
Thank you.
Singapore, please.
Thank you, Coley.
The prevention and resolution of tax disputes is an important aspect of international tax cooperation as enhancing tax certainty can help promote cross border flows and activities.
We would like to propose the addition of a new paragraph which reads, The state parties agree to work together to achieve the effective prevention and resolution of cross border tax disputes.
We think this addition is important as it addresses international tax cooperation, aligns with the objectives of the Framework Convention and establishes the necessary link the protocol to.
Thank you.
Thank you, Marcius, please.
Thank you, colleague.
Mass would like to align itself with the positions of the Africa group as clearly explained by Zambia.
We also believe that conditioning the provision to take into consideration needs, capacities, and priorities weakens the provision and as such, should be deleted, while the other proposal of the A group to have a third paragraph aims at providing clarity in terms of what obtains under this article, and we fully align how satisfy that.
Thank you.
Thank you.
India, please.
Thank you, Colleague.
I recall, as mentioned by the distinguished delegate who spoke on behalf of the Africa group, that initially the Africa group had made a draft that had three paragraphs.
Now, it appears that paragraph two and three of those drafts have been synthesized into what is paragraph two of this draft.
As far as substance is concerned, I mean, as far as presentation is concerned, probably it is the same, but we still have some suggestions to make with regard to the language of this article.
As has been mentioned by the distinguished delegate who spoke on behalf of the Africa Group, and also it was mentioned by Singapore, that this article would serve to be the anchor for the protocol on dispute prevention and dispute resolution.
If that is the case, then I think paragraph one should clearly mention that the kind of disputes that we are trying to deal with in this article are cross border disputes.
Otherwise, right now, this article seems to give an impression that we are only trying to dictate as to how should state parties deal with domestic disputes.
So therefore, we would suggest that paragraph one should read, The state parties commit to implement effective measures for avoiding and resolving cross border cross border tax disputes with the ultimate goal of supporting domestic resource mobilization.
We believe that the reference to domestic resource mobilization and cross border disputes is important to make because that is the connection that needs to be made to emphasize the importance of prevention and resolution of tax disputes because eventually that is what we are trying to do as we gather here.
Moving on to paragraph two.
We would like to see I mean, we would suggest similar changes to language, and then therefore two A.
I mean, two would read that in furtherance of paragraph one, the state parties shall, among other measures, A, seek to minimize the potential for cross border tax disputes by providing clear and accessible legislation and interpretive guidance regarding tax obligations and before dispute resolution, we would like to implement appropriate dispute resolution mechanisms that are fair, independent, accessible, and effective in resolving disputes in a timely manner.
We would like the thing to stop at timely manner.
Now, adding that last piece for both taxpayers and tax authorities in our mind, creates a certain situation.
Because when we say that for both taxpayers and tax authorities involved, we are creating a right and we are creating an obligation for both.
We are creating a right of the taxpayer and the tax authorities to have their disputes resolved in a timely manner.
Along with that, we are also creating an obligation that they will both act in such a way that the dispute will be resolved in a timely manner.
Now, I'm not sure that whether we should create that obligation for taxpayers in this text.
So I think it is enough for us to say that it will be disputes resolved in a timely manner and stop over there.
So that last qualification for both taxpayers and tax authorities, in our mind is unnecessary.
Thank you.
Thank you.
Morocco, please.
Thank you very much.
Morocco aligns with the statement made by Zambia on behalf of the African group and would like to more particularly to emphasize on a few items.
When we read the first paragraph, first of all, we understand that this paragraph as was said by our distinguished colleague from India, the articles is meant to serve as an anchor for the protocol on prevention and resolution of tax disputes.
And with that in mind, when we read paragraph one, it says the state parties shall take effective measures in accordance with its needs, its needs, not their needs.
We have the impression that this is we make reference to individual measures and actions.
And then we have in paragraph two, we have in furtherance of paragraph one, the state party shall, among other measures, and we have the first A addresses the prevention and B resolution.
We think that paragraph B would serve better as an anchor for the protocol, and we think that paragraph two would better to have it as paragraph one and paragraph two make an emphasis on the need for the states to take individual measures and take into consideration the needs, capacities, and priorities, and so on.
Thank you.
Thank you, Chacha, please.
Thank you, Mr.
Colet for giving me the floor.
CCA supports effective prevention and resolution of tax disputes.
We also see this article as an anchor for the second priority protocol.
As regards paragraph one of Article 9, we would like to flag that the wording disputes regarding taxpayers is unclear and the INC should clarify what kinds of disputes this wording should include.
While in general, we are supportive of measures mentioned in paragraph two, we would like to suggest deleting paragraph two altogether because these issues can be tackled by the second protocol, and they create uncertainty about how these measures should be assessed and implemented.
In case that the wording sties check, I would also like to reiterate that we do not see commitments in the framework convention as self executing.
And the article should be implemented by optional protocols and the Framework Convention must respect constitutional and supranational law of states parties.
Lastly, we have a minor wording point.
Should the text read their needs instead of its needs because it's related to the states parties instead of a state party.
Thank you.
Thank you.
I take them, please.
Thank you, Mr.
Cole.
I'll come in and echo some of what Che has just said.
The UK supports effective mechanisms to prevent and resolve tax disputes, including through clear treaty rules, competent authority cooperation, and established dispute resolution processes.
We would welcome clarity on whether the intention of this article is as a principle to recognize this or whether it goes further.
It contains legal obligations on parties to take action to take effective measures, and we are unclear what action is intended.
However, as we noted previously when discussing Article 5, if the Convention is to impose legal obligations on parties, it is essential both that states have a clear understanding of what those obligations mean in practice and that there is clarity about the intended relationship between those obligations and existing legal instruments, both treaties and domestic law.
We also note, as has been mentioned, that the Framework Convention and Protocol two should be capable of being read and understood independently, given the optional nature of the protocol.
However, it is our understanding as well that there is an intended relationship between this article and Protocol two, and we would welcome further clarity on this point, including whether this article is intended to draw meaning from Protocol two.
Thank you.
Thank you.
Lori, please.
Thank you, Mr.
Coley.
We would like to thank you and the Secretariat for drafting this article.
Effective tax dispute resolution is important to both taxpayers and tax authorities in order to ensure the appropriate application of domestic law and tax treaties.
Like others, we question whether this is meant to cover cross border dispute or only national tax disputes.
The wording here seems unclear.
From how we read this article, it could cover both, but then again, it could not.
The UAE raised important questions on how the provision will apply in practice.
Further, as mentioned by the UAE, Singapore, India, Morocco, the link to Protocol two should be made clear.
We would also echo the comments made just now by Checha and the UK.
So we will reflect on this article and the proposals made here by India and the Africa Group and provide written comments after this session.
Thank you.
Thank you, China, please.
Thank you, colleagues for giving me the floor.
We support the prevention and resolution of tax disputes regarding this article as currently drafted, Article 9 does not adequately manifest the willingness and endeavors of contracting parties to resolve disputes by way of consultation and thus appears incomplete.
Furthermore, it also lacks sufficient coherence and connection with Protol two.
It is accordingly proposed that the phrase through negotiation or consultation where necessarily be added to paragraph one of Article 9, right after the words, The state parties shall take effective measures.
Later, we will submit our written comments.
Thank you.
Thank you.
Russian Federation, please.
Colleagues, good morning.
We want to thank you for the inclusion of this important article and providing the text.
It's a very important article for the convention.
I would like to echo the comments of India and other countries that from the draft of the article, it's not really clear what types of disputes are these cross border or domestic disputes, and it is particularly important given the obligations imposed by the second paragraph.
One of them, which implies a mechanism for subsequent assessment.
In this connection, the article requires specifying what kind of disputes such as cross border ones would also suggest that this article to be linked more to the mechanism of the second protocol than with the mechanism of any evaluation of compliance with the rules that this article may impose.
Thank you.
Nia, please.
Thank you, colleague, and for this wonderful work that you are doing and for the draft.
We support the position of the African group as presented by Sambia and also we acknowledge the issue raised by India regarding the need to provide needed clarity.
It paragraph one that's the task dispute that is referred to cross border task disputes.
Um, On paragraph two, especially paragraph two B, we want to suggest that the word transparent is included, implement dispute resolution mechanisms that are fair, transparent, independent, and as, that should be part of it.
The last intervention I want to make is the linking of this to the protocol, which many of the distinguished delegator spoke about.
I think paragraph three of the suggested draft by African Group will address that.
Thank you so much.
Austria, please.
Thank you.
Austria would like to state that we recognize the progress made in the drafting of Article 9 paragraph one, and we understand it as an anchor for Protocol two.
We also echo the comments made by the delegations of Norway and Cechia as well as India on clarifying the envision dispute to be addressed in this article.
We also echo Cechia particularly regarding their comments regarding paragraph two.
Thank you.
All right.
Thank you.
Israel, please.
Thank you, Chair.
I wanted to ask, it's unclear for me why we have Article 9 and then Article 22 as two different articles.
It seems that it should talk about the same and subject.
I don't understand.
Is this article only for domestic dispute? Something is not really clear in the text.
Also I would like to echo what was said regarding the Protocol two.
Thank you.
Okay.
Thank you.
Estonia, please.
Thank you.
I echo those countries who have said that it's not clear from the wording to which disputes this article should be applied, whether only domestic or also cross border ones.
Regarding paragraph two, there's a strong obligation because we're using the word shall.
And subparagraph A is basically going into the design of the domestic law.
I'm not sure this is a proper place for such an obligation because it doesn't really have a cross border nature because if we are having a cross border taxpute, it usually involves two tax administrations and I'm not sure how much use there will be for the other tax administration if one of the countries has a very clear legislation.
The tax disputes still tend to take place.
Regarding subparagraph B, I agree with India that we should not impose any obligations to the taxpayers in this convention.
It might be useful to delete the last part of subparagraph B of paragraph two or to put a full stop after the expression in a timely manner because when the dispute is over, it's over for both taxpayers and tax authorities.
You can't just have a dispute alone.
Thank you.
Okay.
Thank you.
To the earlier question.
I think we went through this a while back.
When we look at the terms of reference, you find the issue of dispute mentioned three times, is mentioned in the commitments, is mentioned in the protocols.
Then we have the dispute resolution mechanisms in what we call the boilerplate items under the elements.
And so basically that is what has led us to where we are currently.
Um, the question of what kind of dispute, in fact, justice, prevention and resolution of disputes.
So basically it leaves it up to us to look at how wide we want it to be or how narrow we want it to be is a very open statement.
For that question, basically, that's why we have it in several places in the convention.
Brazil, please.
Thank you, Mr.
Colleague.
We support the objective of preventing and resolving tax disputes in an efficient and equitable manner.
First, we agree with the inclusion of the wording cross border before disputes in paragraph one.
Second, we understand that the King text would also allow us to keep that item in the agenda in the future for development of other standards and soft law documents.
Third, by having this commitment here, it will allow us to review and monitor countries practices.
In relation to the wording of the text, we believe that the reference in accordance with needs, capacities, and priorities, does not add too much to the reference we already have in the principle section.
So in this case, we recommend and suggest its deletion.
On the other hand, we see some additional value for the expression in the capacity building article and in the financial resources article as it is more of an operational nature in those contexts.
Finally, we see merit in the proposals of India and the African group, and we support exploring how to reconcile these proposals.
Thank you, Mr.
Collette.
Thank you, Bergen, please.
Thank you, colleague.
We would like to also support previous speakers who said that we need clarity on which kind of disputes we are talking about here and further, we think we also believe that paragraph two is operationalization, partially done because it says, among other measures, and it seems better to us that the operationalization has its place in the protocol, and that the link is made clear with protocol two instead of in the Framework convention where we should stay high level and not pick certain measures and leave out other measures.
It seems not sufficiently clear to us why we are doing it that way in paragraph two, which we would support also the proposition made by Cechia concerning paragraph two.
Thank you.
Thank you, please.
Thank you, Chair for giving us the floor.
Chatf aligns itself with the proposal made by the African group through the delegation of Zambia.
In furtherance of that support chair, we want to first highlight that this article deals with two things prevention and resolution of taxes.
We have all stated earlier on and there's a science in which we tend to agree that dispute prevention is primarily a domestic affair.
But taking it even further, whether it is prevention or resolution, this is commitment, and we need to non separate commitment language from language relating to mechanism for settlement.
When it comes to commitment, our understanding is that any measure taken by parties to make the dispute resolution system more efficient, whether it is a domestic level or at international level, we eventually rot positively on international tax disp.
Why? Because domestic mechanisms are the first place of call.
The options is also constantly available to parties, including parties whose cases may become subject of international tax dispute.
To that extent, we see the value in retaining paragraph two as it is, as of paragraph one, our concern has been addressed by the proposal made by the African group because as rendered, the scope is reduced only to taxpayer disputes.
There's also the element which have to do with capacity building, which we believe is primarily and properly already dealt with by article 0N capacity building.
Other related issue which we want to raise chair is issue raised by the honorable delegation from Rush here and it needs to also be very careful on how to marry the proposal here with the proposal already made under 22.
I'm sure we discuss Article 22 when we get to that place, but there is a little bit of relationship that should exist between this article and Article 22.
Article 22 as currently rendered, may have to go beyond providing mechanism for addressing dispute arising from interpretation of the convention.
They also try to operationalize a mechanism which may help parties realize their strategic objective under protocol number two, and those notes of ours I submit.
Thank you, African Union, please.
Thank you, Cole for giving us the flow.
The African Union aligns itself with the submission made by Zambia on behalf of the Africa group and also supported by Mauritius and Morocco, Nigeria, and the collaboration that was provided by India and supported by Brazil and now also the collaboration provided by ATF.
We support the proposed language from the Africa group, especially the addition of a third paragraph under this particular Article 9.
We feel like this paragraph that was originally a proposal from the Africa group will be a very substantial and essential addition to strengthen this particular article.
We also agree on paragraph two B to add the word transparent as was elaborated also by the Africa group and Nigeria emphasized this.
I think we're open to the idea that India has of emphasizing cross border tax disputes, but I think our colleague from ATF has elaborated further on this.
With this, we therefore support this inclusion of the Africa Group proposal as we will also elaborate further in collaboration with the Africa group to give a very strong proposal as to what this particular article should look like, I submit.
Thank you.
Can you please? Thank you, Cole.
We align with the statement made by Zambia on behalf of the Africa group, as well as the draft language that is to be resubmitted after this meeting.
We agree that paragraph one has some restrictive or unclear language when making reference to disputes regarding taxpayers.
As the anchor for Protocol two, we agree that it needs to be redrafted, and we appreciate the proposals presented by the Africa group as well as that presented by the delegate from India.
We also align with the proposal made by the delegate from Nigeria on the need to introduce the concept of transparency in paragraph two and we align with that.
Thank you, Colleague.
Thank you.
BCS, please.
Thank you, Cold, for the opportunity.
The term cross border dispute, you know, would typically mean a tax dispute between a tax resident of a country A with the tax authorities of country B.
The question would be that, what if there is a subsidiary of a foreign entity operating in a country and a dispute involves the tax authorities of country B and a subsidiary of a foreign country A is holding company? Maybe that kind of dispute also should be considered as a cross border dispute because it involves effectively a foreign parent.
Uh, second observation, the title is using the word, tax disputes.
Paragraph one is awarding usage of the word tax dispute, but it using the word disputes regarding taxpayers.
I'm not sure what is sought to be conveyed there.
Another observation, para para, para B of Clause two, makes a reference to only implementation of dispute resolution mechanism.
When we look at the Protocol two, it also has a good amount of, you know, mechanism for prevention of disputes.
So maybe para B should also take into consideration prevention aspects as well.
Thank you.
Thank you.
CFS.
Thank you, colleague.
A few observations from me.
Now, language matters for the enforcement of the Framework Convention and the suggestion to replace shall in Article Article 9 paragraph one with the word commit, that actually waters down the article and removes the obligation of conduct and performance into a mere political undertaking.
Then the scope that has been set out in Article 9, paragraph one should not just be limited to disputes regarding taxpayers, but should also include the tax authorities that are also involved.
Then when it comes to subparagraph B under paragraph two, the word they're independent.
I'm not sure what that actually means as a criteria that has been listed as part of the implementation of dispute resolution mechanisms that it has to be independent because what does independent in this context actually mean? Is it independent from the revenue authority? That's not coming out very clearly to me in my interpretation because Um, I think independent itself has to be attached to a particular stage.
Every tax system in the world.
It runs on the same two stage architecture that is there.
The first is the internal review.
The objection decision is taken by the commissioner or an internal review unit, which is the administration itself reconsidering itself and It's the administration itself within the internal review process that disposes of most matters without litigation.
I'm not sure how independent that approach would be as it sits within Article 9 to B.
Then stage two happens to be the external determination, and this is where you have the tribunal and you have the courts.
Subparagraph B speaks of the dispute resolution mechanism.
Without that distinction.
On its face, the independence requirement reaches the objection stage, and if it is applied to that, then that particular sentence there, the word independent under B becomes incoherent because the administration or the administrative reconsideration by definition itself cannot be independent in that tier of disparate resolution when it comes to tax systems and when the taxpayer objects to an assessment that has been made.
Just some clarity on the term independent and whether that in itself has been tackled in Protocol two.
Thank you.
Thank you.
ICT, please.
Thank you, Mr.
Co leaded.
I just wanted to respond to the proposal from the distinguished delegate from Estonia to remove the final wording from paragraph two B reference to both taxpayers and the tax authorities.
I think it's important, whether it's implicit or explicit to ensure that the taxpayer is adequately represented and the disputes are effective from the perspective of both the taxpayer and the authorities.
I'd read the final wording as a means of ensuring that inclusiveness and accessibility.
I would perhaps be concerned with the suggested removal of that wording at the end of two B.
Thank you.
Thank you, I think we can move to Article 10 before we go forward.
We have a little time before lunch.
Germany, please.
Article Article 0R Article 10.
Sorry, again? Article.
Article 9 or ten.
Nine.
Sorry for being late to the party.
I thought there were other speakers in the pipeline.
Plus, I had to reconcile with my dear colleague.
Thank you.
First, Mr.
Colleague, thank you for giving me the floor and I would like to speak in my national capacity.
As Germany, I would like to welcome the more flexible drafting, which takes account of national needs, capacities, and priorities.
At the same time, bearing in mind that We also have an Article 21 paragraph one, subparagraph A, which expresses something along the same lines.
The current passage here in the first paragraph might be redundant and might be dropped.
Germany's view of the Convention should continue to allow states sufficient flexibility in designing their domestic dispute prevention and resolution mechanisms.
At the same time, any implementation requirements should remain proportionate.
In addition to that, I would like to express my amazement a little bit that there are so many calls here concerning having an anchor for the protocol and on the link between the commitment and the protocol.
I wonder why we are not seeing similar discussions unfolding in the context of Article 5.
I now switch the hats and continue speaking in my capacity as co lead of Workstream three responsible for the second protocol.
I'm speaking also under the control of my my colleague, Marlene, and on her behalf, but feel free to interject.
This is to elaborate a little bit on the considerations that were guiding the drafting of this commitment as far as we can tell and as far as we were involved in this process in the draft.
First of all, We have heard the voices asking to limit this commitment here to cross border tax disputes in order to make it consistent with the second protocol.
While this is somewhat understanding, we have to be mindful of the fact that although the protocol in its current draft speaking about the second protocol, primarily serves the purpose of addressing cross border tax dispute, it is not entirely limited to that.
Second, the TRR do not have a limitation to cross border tax disputes, but rather mandates us to address tax disputes as a whole.
Does not mean that it's up to us, but I just want to flag that limiting this commitment here might to some extent be inconsistent with both the protocol as well as the TRR.
We were of the view that the commitment cannot be drafted to mirror the particular protocol.
Um, Right now, it is a draft protocol only first thing and this would also seem conceptually wrong and also the way around a little bit.
It's true we are currently negotiating and drafting simultaneously a protocol, transposing this commitment.
And the commitment must be consistent with the protocol and both cannot contradict each other.
At the same time, we cannot rule out entirely the possibility that in the future, there might be there might be reason to have another protocol or an alteration to the second protocol that could require or could come with the necessity to be built upon a wider scope.
So we have to be mindful of that.
As far as we have seen it, the protocol in its current draft would be covered by that commitment.
The same commitment would not imply that state parties would be required to sign the protocol.
In order to ensure consistency, this passage about needs, capacities and priorities were introduced.
That is because possibly you have been following the negotiations of the second protocol, the optional approach is being pursued and according to this, optional approach, signatories to the second protocol wouldn't have to adopt, implement all possible measures for dispute prevention and dispute resolution that the protocol provides.
If we were to say in the first paragraph merely that effective measures needs to be taken in order to ensure effective prevention and resolution, someone could derive the meaning that you would have to implement all measures despite the fact that they are actually optional, most of them.
That was the attempt to make it consistent and to allow for a coexistence of both.
I stop here, check with my colleague.
Is there anything you would like to know? So for being so long.
Come on, please.
Thank you.
Thank you for giving me the floor, Mr.
Cole.
First of all, I would like to support what was said in the statement and the position of the African group expressed also by a number of countries, including the position that proposes much clearer wording in three paragraphs with a first paragraph that would save that reference on priorities, capacities and needs of each state's party.
I think that at this stage, we can and insist on the commitment that states parties need to take in terms of putting in place prevention and dispute resolution mechanisms.
We also share the proposal made by India to stipulate the nature of the disputes that are covered in this article.
That is to say, disputes that are born out of international cross border transactions.
We also A with the proposal to introduce a third paragraph which would refer to the possibility of adopting additional protocols or domestic legal instruments by member states to provide greater clarity regarding the implementation of these dispute prevention and resolution mechanisms.
Now, in our national capacity, Cameroon would like to make a suggestion for paragraph two, particularly paragraph two A.
Among the prevention mechanisms, the dispute prevention mechanisms, Relating to international transactions, we could also include the need for simple rules.
We have talked about clear and accessible legislation and interpretative guidance that is important, but it is also important from our point of view to adopt rules which are clear because when the rules are complicated, that leads to disputes over implementation or interpretation even of those rules.
That would be the additional proposal that we would like to make.
On paragraph two to add in addition to clear and accessible legislation also simple rules.
Thank you.
Thank you.
TAM.
Howdy, this article, we did not make a comment on because it's an important article.
Every domestic system for efficiency reasons, if nothing else, need to have prevention and resolution of tax disputes.
However, the rest, every other article in this convention and obviously Protocol two address cross border or globalized issues.
But in the context, this article is very domestic.
As India had pointed out in its comment, We agree and perhaps either by reference to Protocol two or by some language necessary to cross border or globalize this article because otherwise, this article is a standalone of what domestic systems should do doesn't seem to be the purpose of this convention.
Every other article states the sovereignty of the state members to decide their own tax systems.
Again, very important part of every tax system necessary, but we just didn't understand how it fits in.
Thank you kindly.
Okay.
Thank you.
We have for about 10 minutes more.
10 minutes.
All right.
Let's do this.
I think 10 minutes may not be enough for us to start Article 10.
We just have one or two people.
So let's break for lunch and be here so that we can start at three.
Thank you, everyone.
Let's have lunch.
Okay.