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UN Tax Convention Negotiations: Key Developments From Nairobi
The global push for a democratic, equitable and human rights-aligned international tax system has reached a critical phase. From 10-19 November, the Third Session of the Intergovernmental Negotiating Committee (INC) on the UN Framework Convention on International Tax Cooperation (UNFCITC or UN Tax Convention) was convened in Nairobi, Kenya, marking the first time delegates began the substantive negotiations on the Convention’s foundational articles and Protocol II. This session was widely viewed as a defining moment for assessing whether the Convention can deliver a meaningful shift in global tax governance or settle into incremental reform.
In preparations for the November sessions, the INC invited Member States and stakeholders to contribute to the following documents produced during the inter-sessional meetings of the workstreams:
- Workstream I: Framework Convention (A/AC.298/CRP.21 - Co-Lead’s Draft Framework Convention Template 24 October 2025)
- Workstream III: Dispute prevention and resolution (A/AC.298/CRP.22 - Co-Leads’ Concept Note on Ideas for Potential Solutions 24 October 2025)
Pre-Session Meetings
Alongside the formal preparation process, the African CSO working group on the UN Tax Convention and the Civil Society Financing for Development Mechanism convened preparatory meetings to maximise the participation and influence of civil society and trade unions during the third session of the negotiations of the UNFCITC. The meetings were designed to coordinate advocacy strategies and collectively align CSO and trade union positions ahead of the formal negotiations.
Week 1: Workstream I: Framework Convention
The first week of the negotiations focused on the core commitments of the legally binding Framework Convention (Workstream I). The session was dedicated to reviewing the following commitments:
- Fair allocation of taxing rights
- Effective prevention and resolution of tax disputes
- Sustainable development
- High-net-worth individuals
- Effective mutual administrative assistance
- Illicit financial flows, tax avoidance and tax evasion
- Harmful tax practices
Key debates highlighted a clear demand from the Global South and Civil Society for an ambitious text that moves beyond incremental change.
| Article Focus | Key Negotiation Development |
| Article 4: Fair Allocation of Taxing Rights | The overall discussion revealed that while there was a general agreement on the principle of ensuring taxing rights where economic activity and value creation occur, the specific drafting requires significant technical work to achieve the necessary clarity, legal certainty and balance, especially between source-based and residence-based taxation, required for a practical global convention. |
| Article 5: High-Net-Worth Individuals | The discussion on this article was marked by a fundamental divide between delegates who viewed the issue primarily as a domestic tax matter, those who supported the current draft’s specific detailed obligations to enhance transparency and exchange of information, and those who thought the matter required high level commitments in terms of exchange of information that should be a separate issue from taxing high net worth individuals. |
| Article 6: Mutual Administrative Assistance (MAA) | The core of the discussion on this article revolved around the strategic placement and relationship of the article with existing international MAA instruments and the need for concrete drafting input from delegations. |
| Article 7: Illicit Financial Flows, Tax Avoidance and Tax Evasion | The discussion on this article centred on the commitment to cooperate in combating tax-related illicit financial flows (IFFs), tax avoidance and tax evasion. While there was a strong support for the article’s objectives, the debate was dominated by issues of definition, legal consistency and implementation structure. The most contentious issue was the scope and definition of the terms used, particularly the combination of 'illicit financial flows', 'tax avoidance' and 'tax evasion'. |
| Article 8: Harmful Tax Practices | The discussion on Harmful Tax Practices revealed three main areas of debate: the relationship with existing international forums, the depth and binding nature of commitments (ambitious prescriptive obligations vs vague, voluntary ‘best efforts’ language), and the language used for specific policy measures like minimum effective taxation. |
| Article 9: Sustainable Development | The discussion on Sustainable Development centred on the importance of the principle but saw significant debate over the article’s lack of ambition and the need for concrete operationalisation of the three dimensions of sustainable development (economic, social and environmental). |
| Article 10: Prevention and Resolution of Tax Disputes | The discussion on this article primarily focused on clarifying the article’s scope, its relationship with Article 20 and Protocol II and amending its language to reflect a stronger commitment. The most contentious issue was the inclusion of the word ‘domestic’ in paragraph 3, which referenced domestic dispute resolution mechanisms that may risk infringing upon national sovereignty. In terms of the relationship between Article 20 and Protocol II: Article 10 is intended to be the broad anchor in the Framework Convention for the prevention and resolution of tax disputes between taxpayers and tax authorities (and related cross-border issues). Article 20 is reserved for the settlement of disputes between State Parties that arise from the interpretation or application of the Convention itself (e.g. a dispute over confidentiality rules for exchanged taxpayer information). Protocol II: This instrument is intended to contain the detailed, enforceable rules (e.g. on Mutual Agreement Procedures, Arbitration, Mediation) that operationalise the broad commitments in Article 10. |
| Article 11: Capacity Building and Technical Assistance | The delegates centred on its critical role as a cross-cutting commitment for the convention's effective implementation and how best to structure and fund it. |
The sessions also allowed discussions on articles to be presented at a later stage.
Week 2: Workstream III
The second week of the negotiations focused on Workstream III, which deals with establishing a Protocol on effective Dispute Prevention and Resolution, and, particularly, how to design a system that is inclusive and would work for all State Parties. The objective of the session was to deepen the understanding of possible approaches, their implications and interactions, reflect collectively on the feasibility and coherence of solutions, and identify priorities and needs for the next stage of work.
A major point of discussion was the issue of optionality; how to ensure broad participation while accommodating differences in national capacity and existing treaty obligations:
- Two-Step Approach: The INC discussed a proposal for a two-step approach: a ‘menu of options’ for dispute resolution alongside a set of 'core mechanisms’ that would be available to all parties.
- Operationalising Optionality: Delegates explored how optionality would work in practice, debating mechanisms such as prior opt-in/opt-out provisions versus case-by-case decisions. The goal was to ensure broad participation while maintaining inclusivity.
- Superseding vs Complementing: A key policy question was whether the new mechanisms in Protocol II should supersede existing bilateral agreements or merely complement them.
Delegates also sought clarity on which types of disputes the Protocol would cover:
- Cross-Border Definition: There was a need to clearly define what constitutes a ‘cross-border tax dispute’.
- Inclusion of Domestic Disputes: Several Member States supported opening the scope to domestic tax disputes, while others sought to limit the focus strictly to cross-border issues (this directly relates to the broader debate summarised in the notes on Article 10).
- Interpretation and Application: The discussions covered a range of disputes, including those arising from the interpretation and application of the Framework Convention itself.
There was also the arbitration standoff amid the discussions around this protocol. While the Global North countries championed mandatory binding arbitration for swift resolutions, citing Mutual Agreement Procedures (MAPs) enhancements over the years, the Africa Group fiercely opposed arbitration decrying high costs, power imbalances and threats to tax sovereignty for developing countries.
Our Intervention on Dispute Prevention and Resolution
Our Associate Programme Officer - Africa, Roselyne Onyango, presented a statement on the scope of Workstream III, arguing that the Protocol must be a transformative instrument and not merely an incremental fix right. The statement highlighted how the current dispute mechanisms are fragmented, costly and fundamentally skewed toward corporate actors, often failing developing countries due to high costs and lack of transparency. Furthermore, we highlighted the human rights link sharing that every dollar lost to tax disputes is a dollar taken from public services like health and education. Therefore, we called for the Protocol to prioritise dispute prevention over dispute resolution.
Watch our intervention here.
The session successfully achieved its objective of collecting inputs and feedback on Workstream III/Protocol II, which was described as delving into one of the ‘most sensitive and complicated topics in international tax’. The Chair noted ‘important progress’ was made on the solutions under Protocol II. Thus, Workstream III will continue its work during the intersessional period between the Nairobi session and the next session in New York.
The session in Nairobi saw oral interventions delivered by 13 negotiators from Africa, 18 from Europe, 5 from Latin America, 3 from the Caribbean, 4 from Asia and 3 from the Middel East. While the effort to expand the sessions to the African region was based on a democratic and inclusive intention, actual turnout by State representatives was lower than compared to the previous sessions in New York, where countries are represented by either dedicated members of their Ministries of Finance, Foreign Affairs or Tax Administrations, or by the staff from their Permanent Missions before the United Nations.
Key Takeaways
- Historic Milestone: having the session at the UN Office in Nairobi, Kenya, was a symbolic win for the Global South, marking the first time international tax negotiations occurred in Africa. This shift amplifies voices from the developing countries disproportionately impacted by the current global tax rules, thus fostering more equitable participation.
- Risks of a Shell Convention: The debate on the draft text showed a serious risk of the Framework Convention becoming a hollow or ‘shell’ convention with no transformative power. The draft convention lacks binding commitments and concrete mechanisms on critical issues such as fair allocation of taxing rights between source and residence countries, minimum effective taxation of multinationals and taxation of high-net-worth individuals. Furthermore, because a large proportion of delegates were tax administrators rather than high level political negotiators, the discussions focussed excessively on procedural and administrative details rather than substantive reforms that would be needed to dismantle century-old systems that systematically favour developed countries, tax havens and multinational corporations.
- Vital Role of Civil Society in Shaping Fair Global Tax Governance: Civil society continues to be an essential watchdog to ensure that the convention delivers on its objectives on fair global tax rules. Thus, together with partners and allies, we continuously emphasised the need for an ambitious and robust Framework Convention containing clear, binding commitments that grant a powerful and effective mandate to the future Conference of Parties (COP).
What Comes Next
- Deadline for Inputs: Member States and stakeholders are invited to submit comments on the Co-leads' documents from the intersessional workstreams by 5 December 2025. This is crucial for developing states, given that written submissions create a clear record of positions, help level the playing field in a process where negotiating capacity varies widely, and ensure that their language proposal remains firmly on the table when discussions resume, thus strengthening their positions against attempts by developed countries and tax havens to weaken them during sessions.
- Civil Society Action: Against this backdrop, CSOs are intensifying country-by-country advocacy with negotiators by sharing the Catalogue of Proposals for Articles for the New UN Framework Convention on International Tax Cooperation with them to try and influence their submissions on or before 5th December 2025. Our role is to engage with negotiators as part of the coordinated CSO action to ensure they provide their written submissions in a way that raises the ambition of the Framework Convention to deliver on its anticipated benefits, while reflecting a Global South perspective. This means a Framework Convention which comprehensively covers fair allocation of taxing rights, sustainable development in a way that upholds economic, social and environmental rights, effective taxation of extractive industries, transparency, and other issues critical to the Global South.
- Fourth Session of the INC: It will take place in New York in February 2026. This upcoming session will build on the progress made in Nairobi, moving closer to a globally inclusive and effective international tax system. We will continue to coordinate with allies and facilitate strategic discussions during the intersessional period and at the next session with a view to raising the level of ambition of the Framework Convention.
Publication Series: International Law at the UN Tax Convention
Our 'International Law at the UN Tax Convention' series provides international legal analysis tailored to the convention process, aiming to inform negotiators, civil society and other stakeholders. By bridging disciplinary divides and unpacking legal dimensions of key issues, it supports the design of a coherent, effective and rights-aligned international tax instrument.
Read it here.
