UN Tax Convention Talks Resume in Nairobi with Focus on Fair Allocation of Taxing Rights, High Net-Worth Individuals
The third session of the Intergovernmental Negotiating Committee on the UN Framework Convention on International Tax Cooperation (UN Tax Framework Convention, or Convention) officially opened in Nairobi, Kenya on 10 November 2025.
The 8-day programme of work provides an opportunity for Member States and other stakeholders to express their views and concerns regarding the drafting of the aforementioned instruments. It should be noted that the Committee's work is divided into separate Workstream groups:
- Workstream I focuses on drafting the Convention;
- Workstream II focuses on the first early protocol (Taxation of Income From Cross-Border Services); and
- Workstream III focuses on the second early protocol (Dispute Prevention and Resolution).
The first morning session began with a brief presentation from the Committee Secretariat on the order in which issues will be addressed under Workstream I:
| Commitments | Provisions whose drafting depends at least in part on drafting of commitments | Provisions that are not subject-matter dependent that can be drafted at any time |
|---|---|---|
Fair allocation of taxing rights Effective prevention and resolution of tax disputes Sustainable development High net worth individuals Effective mutual administrative assistance Illicit financial flows, tax avoidance and tax evasion Harmful tax practices | Conference of the parties Secretariat Definitions Data collection and analysis Exchange of information for implementation of the convention Review and verification Subsidiary bodies Capacity building and technical assistance | Amendments to the convention Adoption of protocols Formal matters – depositary, entry into force, etc. Financial resources |
Delegates began deliberations on article 4 of the draft Convention, which proposes that jurisdictions where business activities occur — including where value is created, markets are located, and revenues are generated — should have the right to tax the resulting income. Member States and stakeholders debated key concepts such as residence, taxpayer fairness, and alignment with existing tax treaties, with article 4 remaining open for further negotiation.
They extensively questioned the challenges and opportunities of article 4, focusing mainly on:
- addressing fundamental terms such as residence as a factor to consider in the final draft, aiming to allocate taxing rights fairly;
- ensuring fairness and protection for taxpayers, recognizing their ability to pay as part of a balanced approach to revenue generation;
- seeking clarification of undefined terms (i.e. where value is created, markets located, revenue generated, business activities v. economic activities) and how these should be interpreted to avoid overcomplication or future disputes; and
- examining the relationship between this article and existing commitments in current double tax treaties.
While this debate occupied most of the first day, article 4 remains an open item for further discussion before a final draft is agreed.
After addressing the fair allocation of taxing rights, discussions moved to article 5 – High-Net-Worth Individuals, with keen suggestions on information sharing, scope, and existing reporting mechanisms. Deliberations will resume on 11 November 2025 on the second day of this third and final session for 2025.
Further developments will be reported as they occur.
Note: The article 4 draft presented on 10 November 2025 is entitled "Fair Allocation of Taxing Rights. The States Parties agree that every jurisdiction where a taxpayer conducts business activities, including jurisdictions where value is created, markets are located and revenues are generated, have a right to tax the income generated from such business activities".
Report from Ximena García, Associate, IBFD. Follow our reporting on this via our daily Tax News Service (subscribers only).