Parliamentary Drop In on the UN Tax Convention

Thank you to everyone who contacted me about the UN Tax Convention, and for the invitation to the drop-in event in Parliament to learn more. As you will know, in November 2023, the UN General Assembly Economic and Financial Committee approved a draft resolution calling for a legally binding UN Framework Convention on International Tax Co-operation. Then in November last year, it approved a further resolution adopting the terms of reference for this UN Framework Convention.

I believe it is crucial that the UK works to protect against base erosion and profit-shifting – where multinational corporations use tax avoidance strategies to shift profits to low- or no-tax locations. This means it must work with all stakeholders to ensure inclusive and effective international tax co-operation. I welcome that it has been actively engaging with negotiations over a UN Framework Convention on International Tax Co-operation.

At the same time, I believe that for a UN Tax Framework Convention to be able to make progress on international tax co-operation, it needs to have clear aims, avoid repeating work already taking place elsewhere and ensure that it seeks the broad support and participation of member states. It must also not undermine existing tax rules.

Unfortunately, I am concerned that, as the UK’s Ambassador highlighted during consideration of this issue at the UN in November, the resolution and the terms of reference for the UN Framework Convention do not provide sufficient reassurance on these issues.

I nevertheless welcome that the UK will continue to engage constructively on the UN Framework Convention in support of key principles for strengthening international tax co-operation. I can assure you that I will continue to follow developments on this issue, keeping in mind the concerns you highlight, as work on this continues at the UN.

On the issue of tax and multinationals more widely, I agree that we need to make sure global corporations pay their fair share of tax and that it is crucial we drive forward co-operation internationally to tackle aggressive tax planning by large multinationals and ensure a level playing field. That is why I welcome implementation of the OECD global minimum rate of corporate taxation.