Global Taxation

A first-ever framework to strengthen international tax cooperation and make it more inclusive 

At the 15th Asia/Africa International Fiscal Association (IFA) conference, Rajesh Ramloll, the Solicitor General of Mauritius, highlighted a major development in global tax governance: the adoption of the terms of reference for the United Nations framework convention on international tax cooperation. This new framework marks a shift from traditional bilateral treaties toward a more inclusive and effective system, addressing key gaps in the current tax structure. Mr. Ramloll explained how this UN-led initiative, developed by a member-state committee, aims to strengthen international tax cooperation. He also emphasized the broader scope of the framework, which will likely address fundamental issues such as taxpayer rights and human rights. According to Mr. Ramloll, the treaty could establish new standards for fairness and inclusivity, offering a more balanced approach to global tax governance, particularly for developing nations.

The 15th Asia/Africa International Fiscal Association (IFA) conference, which was held in Mauritius in the last week of August, explored the changes underway in international tax regulations. The event featured in-depth discussions led by thought leaders and policymakers from across the globe, against the backdrop of rapidly evolving global tax policies. 

A key speech delivered at the conference came from Rajesh Ramloll, the Solicitor General of Mauritius. His address emphasized the transformative role IFA has played in shaping international tax cooperation over the decades, highlighting critical milestones and ongoing reforms that are expected to leave a lasting impact on global taxation.

Mr. Ramloll underscored the role of the IFA in the introduction of arbitration as a tool to resolve tax disputes, a concept that was first debated at the IFA Congress in Berlin in the 1990s. He explained how arbitration, once viewed as a novel approach, has now become a recognized mechanism integrated into numerous tax treaties worldwide. “It is at an IFA conference that innovative ideas, such as the introduction of the use of arbitration, were first discussed as measures to resolve tax disputes. Today, arbitration has made its way formally into tax treaties, whether bilateral treaties, the UN model, the OECD model, or even multilateral treaties such as the Multilateral Instrument (MLI),” he stated.

We’ve been talking about pillars, but there are other pillars as well, and probably the UN treaty is going to show the way

Mr. Ramloll further highlighted a major development in global tax governance: the recent adoption of the terms of reference for the United Nations framework convention on international tax cooperation. This new framework, which is set to be launched in the coming years, marks a departure from the traditional bilateral tax treaties. It is aimed at creating a more inclusive and effective system of international tax cooperation.

“I feel it appropriate and befitting to mention that recently, at the United Nations, a committee adopted the terms of reference for the first-ever framework convention on international tax cooperation. This is the first UN-led effort that aims to strengthen international tax cooperation and make it more inclusive,” Mr. Ramloll said. The framework is expected to address the gaps and inequities in the current global tax system, setting the stage for more comprehensive reforms.

He elaborated on the UN General Assembly resolution passed in December 2023, which promotes inclusive and effective tax cooperation. As part of this initiative, a member-state-led, open-ended intergovernmental committee was established to draft the terms of reference (TOR) for the UN framework convention. “The committee completed its work just last week (Editor’s note: third week of August), and the report will be submitted at the UN General Assembly,” Mr. Ramloll shared. 

The Solicitor General of Mauritius went on to explain the results of the vote: 110 countries voted in favour of the framework, 8 opposed it and 43 abstained. He encouraged the audience to consider the geopolitical dynamics behind the voting patterns, suggesting that the countries opposing the treaty might not come as a surprise to those familiar with international tax cooperation.

One of the most striking elements of Mr. Ramloll’s speech was his focus on the broader implications of the UN framework convention. While existing tax treaties primarily deal with fiscal issues, the UN framework is expected to take a more comprehensive approach. “In this new international tax system, a number of fundamental issues are likely to emerge that you do not typically find in tax treaties – issues like taxpayer rights and fundamental human rights,” he emphasized. This shift reflects a growing understanding of the social dimensions of taxation, as tax policies increasingly intersect with global human rights and governance concerns.

He further predicted that the forthcoming UN treaty could set new benchmarks for addressing these broader issues, offering a more inclusive approach to international tax cooperation. “We’ve been talking about pillars, but there are other pillars as well, and probably the UN treaty is going to show the way,” Mr. Ramloll remarked. This comment points to an evolving international tax framework that incorporates fairness, equity, and inclusivity, concepts that have long been championed by developing nations.

IFA: A Resilient and Dynamic Organization

Mr. Ramloll also celebrated IFA’s long-standing contributions, commending the organization’s resilience and adaptability in the face of global challenges. He reminded the audience of IFA’s rich history, which dates back to its inaugural conference in 1938, at the Peace Palace, in The Hague, Netherlands. “Since 1938, IFA has organized congresses every single year, even during wartime,” Mr. Ramloll recalled, noting that the only pause in its activities occurred during the COVID-19 pandemic, when IFA shifted to virtual webinars and online events for its 13,000 members.

“What’s extraordinary about the International Fiscal Association is the diversity of its members, coming from no less than 115 countries,” he added. This global diversity has enabled IFA to foster a highly technical, non-political platform where legal experts, accountants and fiscal policy professionals can engage in meaningful exchanges of ideas. As a result, IFA continues to play an important role in shaping the future of international tax law.

As the international community contends with emerging challenges such as digital taxation, profit-shifting, and the need for greater inclusivity in tax policy, platforms like IFA will remain essential in facilitating these critical conversations.

Mr. Ramloll left the audience with a sense of optimism for the future, emphasizing the importance of continued collaboration in shaping a fair and effective global tax system: “Let us see what happens in the coming years, as these dynamics unfold and as the UN steps into a more central role in the international corporate tax system.”