As the UN Tax Convention's Terms of Reference (ToR) have been approved, the negotiations revealed a tapestry of complex issues and significant compromises. From the critical inclusion of human rights to the conspicuous absence of explicit environmental and gender considerations, the road to this draft has been anything but straightforward. In this analysis, we dissect the key elements from the recent negotiations, delving deeper into the most pivotal topics and examining their implications and the pathways forward. As CESR continues to engage in this critical process, our focus remains on ensuring that human rights principles and substantive commitments are firmly embedded in the final Convention framework.

By: Charlotte Inge and Matt Forgette, CESR Fellows

This table offers quick insight into where critical issues landed after the three weeks of debate. It highlights whether the issue was incorporated within the Terms of Reference, and offers a rating on how well it was addressed.

Key Issue	Terms of Reference	Rating
Human Rights	Included in the principles of the ToR (9(c)).
Environment	Not included as an issue in its own right, but included as a component of “sustainable development” in the principles (9(d)) and commitments (10(c)). Environmental challenges referenced as a possible topic for a future early protocol, in 17(a), but not prioritized as an early protocol.
Sustainable Development	Included in the preamble (6(c)), objectives (7(c)), principles (9(d)) and (9(f)) and commitments (10(c)) of the Convention.
Gender	Not included despite the critical intersections between tax and gender.
Civil Society Engagement	Included as part of approaches and timeframe for negotiation (21).
Protocols	Included and defined in (14) as optional, legally-binding instruments to implement the framework convention. Established in (15) that two early protocols will be developed simultaneously with the convention, one of which should address digital taxation. Additional candidates for early protocols are outlined in (16), while options for future protocols are described in (17).
National Sovereignty	National sovereignty regarding tax matters is included and emphasized without counterbalancing language regarding how these tax policies can undermine other states.

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Terms of Reference in detail, by issue

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The road ahead - What's next for the UNTC?

A recurring question throughout the ToR negotiations was about how human rights relate to taxation. Now that human rights language has been enshrined within the Terms of Reference, there is an opportunity to use them. 

It is worth noting that there was some reticence among Global South states regarding the possibility for the weaponization of human rights language by OECD countries. 

While CESR recognizes the validity of those concerns, we still believe the positive impacts of including human rights in the ToR vastly outweigh the negative. One such impact is through framing human rights as an entry point for topics that were unfortunately omitted from the terms of reference. For instance, Brazil introduced language around tax progressivity that regrettably did not make the final draft. Similarly, gender was excluded from the final draft, and climate failed to secure standalone language. However, full alignment with international human rights law requires that these elements still be incorporated within the Framework Convention.

Now that the Terms of Reference have been finalized, the next steps are:

• The General Assembly will vote, and hopefully approve, the Terms of Reference (expected around November 2024)..

• If they are approved, a Member-State-Led committee will start to develop the Framework Convention. 

• This committee is expected to meet three times a year from 2025 to 2027, with each session lasting up to 10 days. 

• The goal is to complete the Framework Convention and two key protocols before September 2027, after which they will then be submitted to the General Assembly for approval.
  
  
  
  

  An ambitious final draft for its Terms of Reference means that the United Nations Tax Convention still holds the potential for transformative change in global taxation. However, it will require continued advocacy from all stakeholders, even those resistant to reform. The disparities between nations and the burdens borne by the most vulnerable are stark, and the need for a fair and equitable tax system has never been more urgent.

  CESR will continue to push for commitment for a process that places human rights at the forefront to create a fair, equitable world tax system.

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