UN tax agreement despite resistance from the EU and the USA – EURACTIV.de

The international community will move forward with its plans to convene a United Nations convention to set global rules on taxes and illicit financial flows. The European Union, the United States and the United Kingdom spoke against the project in advance.

After discussion and voting in New York on Wednesday (22 November), a resolution on “Promoting Comprehensive and Effective International Tax Cooperation” and the UN Tax Convention, both submitted by Nigeria on behalf of the African Group at the UN, was reached and approved by 125 votes. Votes to 48.

The 27 EU member states made up the majority of the 48 countries that voted against creating a UN tax treaty. The United States, the United Kingdom and Japan were also among those opposed to the agreement.

At a meeting earlier this month, EU finance ministers recommended that EU countries support a non-binding multilateral agenda at the United Nations.

They also concluded that the UN tax body “risks duplicating ongoing or completed international efforts related to the current global tax framework.” […] This would take too long for the legal systems of all countries.

Previously, the UK’s amendment to make the process non-legally binding, which was supported by all EU countries and the US, was rejected by 107 votes to 55. Rich countries were accused of obstructing the process during intense negotiations last month.

The conference will now be organized in the coming months, and is expected to present its first proposals from 2025.

Fixed topic

The question of who sets the tax rules at the global level has been the subject of heated debate in recent years.

African countries say they are among the biggest losers from illicit financial flows and tax evasion. Therefore, global tax policy should be set at the UN level, and not by the 39-country Organization for Economic Co-operation and Development (OECD).

Nobel laureate Joseph Stiglitz was among a group of international economists who supported this call.

While the Paris-based Organization for Economic Co-operation and Development has been working for years on how multinational corporations pay taxes, its 39 members do not include any African or developing countries. That’s why critics refer to it as a “rich club.”

Critics of the UN Convention claim that the United Nations does not currently have the resources or expertise to set tax rules. There is also a risk that the new process will slow the progress made by the OECD.

European Union countries lose more than $130 billion annually due to tax havens. The European Union maintains a “black” and “grey” list of countries that do not apply international rules on the exchange of banking information, money laundering and taxation.

However, civil society organizations have pointed out that many EU countries are themselves tax havens. In its annual country recommendations as part of the European Semester, the European Commission this year called on Luxembourg and Malta to take measures to combat aggressive tax planning.

[Bearbeitet von Nathalie Weatherald/Kjeld Neubert]