The UN tax talks are exposing who benefits and who loses under today’s rules

The first two substantive sessions of negotiations on the UN Tax Convention (UNTC) have laid bare the stakes. After years of unfair rules designed elsewhere, countries now have the chance to decide who gets to tax multinational profits and who keeps losing out under the current system. What emerged in New York this August 2025 was not just technical wrangling, but a power struggle over the rules of the global economy and the ability of States to raise resources for the rights and wellbeing of everyone, everywhere.

By Nina Opacic, CESR fellow, and María Emilia Mamberti, CESR’s Research and Policy lead

The debates revealed both divides and shared frustrations. On one hand, many Global South countries pushed to anchor taxing rights where real economic activity happens, where goods are sold, services are provided, and workers are employed. For them, this is about reclaiming revenues to fund health care, education, climate action, and other urgent needs. On the other hand, several Global North countries clung to OECD frameworks that have long drained resources away from countries where profits are generated. As Kenya put it, “Calling for complementarity is calling for the status quo to remain. The status quo has been unfair for developing countries.”

Civil society echoed these concerns. Groups warned that vague concepts like “value creation” risk keeping loopholes wide open for corporate tax abuse. They called instead for simple, rights-based rules linking taxation to real activity, backed by transparency tools like public country-by-country reporting and global asset registries. These are not abstract demands. They are about ensuring that schools are not underfunded, hospitals are not short-staffed, and communities are not left behind while multinationals shift profits offshore. Rights-based commitments on taxation can also reinforce broader goals: advancing gender equality, strengthening social protection, and resourcing climate justice.
For more information on the origins and significance of the UNTC, visit our Frequently Asked Questions on this topic. 

Key debates

1. Fair allocation of taxing rights: The central debate was over how to ensure fair allocation. Global South countries defended language in UN resolutions affirming that taxing rights should follow real economic activity. This is not just legal fine print. It determines whether revenues stay in market countries or are siphoned away to headquarters in the Global North.
2. Protocol I – Cross-border services: A major divide centered on how to tax the booming trade in digital and other services. Many Global South countries emphasized the need for source-based taxation, so that income from services is taxed where the services are provided, not just where companies are headquartered. Current rules are not only obsolete for current business models (for example, those centered around a physical presence), but also result in depriving developing countries of much-needed public resources. Some Global South countries also favored gross taxation, easier to administer and better at ensuring some revenue stays in-country. Global North States pushed for net taxation, which requires stronger administrative capacity and often benefits multinationals. Some countries, like Italy and India, suggested differentiated rules depending on the type of service, but others warned this would create loopholes. The debate is not just technical. It will determine whether digital giants and service multinationals finally contribute to the countries where they operate, or continue escaping taxation.
   
   Questions also emerged about the operation of the protocol. Should it be self-executing or require national legislation? Could states ratify the protocol without first ratifying the Framework Convention? Most agreed the answer was no, since the terms of reference make clear that protocols are legally binding only under the framework. These design questions are not minor. They shape how enforceable the new system will be, and whether it can close the gaps left by OECD rules. Through the Initiative for Human Rights in Fiscal Policy, CESR and allies have also highlighted the importance of coherence between framework conventions and protocols, stressing that protocols must be legally binding and clearly anchored in rights-based commitments (see working paper here).
3. Protocol II – Dispute resolution: Arbitration was another flashpoint. Many Global South states rejected mandatory arbitration, citing bitter experience with investor–state dispute settlement (ISDS) that favored corporations over people. They demanded mediation and state-to-state mechanisms that respect sovereignty and capacity constraints, with tools like joint audits and advance pricing agreements to prevent disputes before they arise. Some Global North countries, including Switzerland and Canada, argued arbitration should remain an option, while Chile proposed a phased approach. Civil society backed the Africa Group, pointing out that the best way to prevent disputes is to fix the flawed transfer pricing system altogether. Arbitration, they warned, risks locking countries into the very inequalities the UN convention is meant to end.
4. Taxing high-net-worth individuals (HNWIs): Another important debate was how to ensure effective taxation of the ultra-rich, who often face lower effective tax rates than ordinary citizens. Civil society interventions highlighted the delocalized nature of HNWIs wealth, hidden in shell companies, trusts, and tax havens, and pushed for global coordination, including a global asset registry. The stakes are clear. Taxing the ultra-rich more effectively could generate billions in resources for human rights and sustainable development.
   
   CESR intervened in the negotiations to emphasize that commitments must go beyond preventing evasion and avoidance. We stressed the need for effective taxation of the ultra-rich, who benefit from opaque arrangements and aggressive tax planning while ordinary citizens pay proportionally more. The stakes are clear. Taxing the ultra-rich more effectively could generate billions in resources for human rights and sustainable development.

Lessons so far

Six reflections stand out from these sessions:

1. Everyone loses under the current system. While Global South countries are hardest hit, even wealthy countries like those in the EU lose billions through sweetheart deals with corporations. The system only works for multinationals and the ultra-rich.
2. A broad but meaningful framework is essential. Some countries want a vague convention. But as civil society stressed, broad does not mean toothless. Like climate conventions, top-level commitments can still drive powerful change, litigation, and reform. Clear commitments to fairness, transparency, and rights-based taxation must anchor the framework. Lessons from past UN conventions on climate and human rights show that broad agreements can still be enforceable if guided by strong principles.
3. Inclusion matters. Bringing tax cooperation to the UN creates a chance for more democratic decision-making. But only if civil society is fully included, not sidelined in between-session “workstreams.” Excluding civil society risks producing yet another closed-door deal that benefits corporations. Tax justice cannot be negotiated behind closed doors.
4. Transparency is non-negotiable. Global asset registries, public country-by-country reporting, and beneficial ownership registries are essential tools. Without them, commitments risk remaining unenforceable and citizens cannot hold the wealthy and corporations to account.
5. Wealth taxation must be part of the agenda. Negotiations should go beyond corporations to address the extreme concentration of personal wealth. Effective taxation of high-net-worth individuals is key to mobilizing resources fairly and reducing inequalities (including gender ones).
6. Shared interests can drive progress. Even within the EU, countries acknowledged losses under current rules. This opens space for alliances across North and South, since all states stand to benefit from a simpler and fairer system.

Looking towards Nairobi

The first two sessions in New York laid important groundwork, but the toughest work lies ahead. Between now and the third session in Nairobi in November 2025, workstreams will continue refining proposals on the Framework Convention and early protocols, which we expect to generate significant debate. Draft text is expected to be tabled in Nairobi, which will mark the real turning point from discussion to negotiation.

The Nairobi session will be critical for clarifying the scope and commitments of the Framework Convention, resolving key divides on cross-border services (nexus rules, gross vs net taxation, and digital services), and shaping a dispute resolution system that works for all countries, not just powerful states and corporations.

Civil society will continue pushing for meaningful inclusion, reminding states that fair and transparent tax systems cannot be negotiated behind closed doors. We hope Nairobi will not only advance substantive consensus, but also ensure full and timely participation of civil society. Watch this space for live coverage and analysis from Nairobi.