Business takeaways from the first rounds of UN Tax Framework Convention negotiations

What’s the UN Tax Framework Convention and why does it matter for business?

The negotiations for a United Nations Framework Convention on International Tax Cooperation could redefine the foundations of international taxation, which naturally carry implications for business. Predictable and economically sound tax rules are essential for cross-border trade and investment.

As the institutional representative of businesses worldwide and a Permanent Observer to the United Nations, ICC is engaging throughout this process by advocating for a system that delivers the stability businesses need to drive growth and sustainable development.

Who is steering the talks and what’s the roadmap?

The Intergovernmental Negotiating Committee (INC) is leading this process. The negotiations build on long-standing advocacy efforts from developing countries and the commitments in the  2015 Addis Ababa Action Agenda, which called for inclusive decision-making in international tax advocacy and to increase the mobilisation of resources towards the 2030 Agenda.

In early 2024, an ad hoc UN committee negotiated the Terms of Reference for the process, setting out its scope, objectives and timeline.
Crucially, the TOR  included the decision of having two early protocols that would be developed in parallel with the Framework Convention itself. Negotiations are scheduled to run from 2025 to 2027, with the final text — including both protocols — expected to be presented to the UN General Assembly by autumn 2027.

The Framework Convention will establish broad principles and mechanisms for international tax cooperation, while the protocols will deal specifically with cross-border taxation of services (drawing on provisions from Articles 12A, 12B, and 12AA of UN model conventions) and on tax dispute prevention and resolution.

In August 2025, the first two substantive sessions of negotiations took place, following the release of issue notes on the Framework Convention, the two early protocols, as well as a public consultation to which the ICC provided the following submissions:

• ICC response to issue notes on the Framework Convention
• ICC response to cross-border taxation of services early protocol
• ICC response to tax dispute prevention and resolution earlyprotocol

Week 1 discussions

Week one in New York focused on the initial commitments to be included in the Framework Convention: the fair allocation of taxing rights, dispute prevention and resolution and sustainable development as well as the need for administrative cooperation. Most countries expressed a preference for high-level commitments, while some voiced a preference for first agreeing on the underlying principles.

Key design questions still remain, including  whether the new system will function as a Multilateral Instrument (akin to the OECD MLI) or more like the recent Fast-Track instrument designed by the UN Tax Committee of Experts. Work continues through member-country only meetings.

Week 2 discussions

Week two turned to the early protocols.

• Protocol on Cross-Border Taxation of Services: discussions centered around gross and net basis withholding taxes, nexus rules that do not require physical presence, data needs to verify service provision and dispute resolution. References have also been made to the recently adopted Article 12AA of the UN Model – which substantially change the way cross-border services are taxed, prescribing gross-basis taxation without any physical presence required – as well as Digital Services Taxes and similar measures adopted in some countries such as France, Nigeria and Colombia.
• Protocol on Tax Dispute Prevention and Resolution: conversations focused on current gaps in mechanisms. Open issues included scope – whether the protocol is limited to Framework Convention related disputes or all cross-border tax disputes – how to resolve cases where no treaty exists and whether to include tax arbitration.

ICC advocacy priorities

• Inclusion of taxpayers rights among the principles of the Framework Convention to ensure tax certainty alongside the right to be heard, the right to fair treatment and the right to confidentiality, among others.
• Importance of economic analysis to verify that any solutions can truly be effective and not represent a barrier to trade and investment, such as gross-basis withholding taxes Tax policy should foster cross-border trade and investment that creates jobs and sustainable economic growth, not act as a barrier.
• Clarity over the relationship with current tax treaties and other multilateral solutions.
• The importance of dispute prevention (through, for example, cooperative compliance and advance pricing agreements) and ensuring that effective and efficient mechanisms are in place when disputes do arise (e.g. binding arbitration).
• Continuous dialogue between governments and businesses, which can share practical experience and insights.

Learn more or help shape the ICC perspective at the UN Tax Framework Convention

ICC will be participating in the next negotiation session on 10-21 November 2025 in Nairobi, Kenya. For further information on the negotiations, potential business impacts and how to get involved with the work of the ICC Global Tax Commission, please contact Luisa Scarcella (Global Policy Lead – Taxation and Trade) at Luisa.SCARCELLA@iccwbo.org and Vidusshi Singh (Policy Advisor – Banking and Tax) at Vidusshi.SINGH@iccwbo.org.