Tax Treaty Negotiation

Work in this area was launched during an expert group meeting on “Tax treaty negotiation and capacity development”, held in New York in December 2012, which was attended by several members of the United Nations Committee of Experts on International Cooperation in Tax Matters (the Committee) and other experienced tax treaty negotiators. The experts shared their experiences in the area of double tax treaty negotiation, with a focus on the needs of developing countries at different levels of development and with diverse macroeconomic conditions and goals. They also reviewed the available materials and capacity development tools on the subject, including those developed by the Committee. Based on the outcome of this meeting, the programme of capacity development activities in the area of negotiation of double tax treaties to be undertaken by the United Nations was then designed.

Following the recommendation not to develop a separate United Nations course on negotiation of double tax treaties but rather to join forces with the Organisation for Economic Co-operation and Development (OECD) in delivering their well-established event on this topic, the UN-OECD Practical Workshop on Negotiation of Tax Treaties is now offered on a biennial basis. First such event was held in Vienna, Austria in May 2014 and the next one will be offered during the first half of 2016.

It was also decided that basic practical tools needed to be developed on the negotiation of tax treaties and made freely available to developing countries. Accordingly, the Financing for Development Office (FfDO), in context of its capacity development programme, is providing support to the Subcommittee on Negotiation of Tax Treaties—Practical Manual (the Subcommittee), which is mandated to develop a practical manual on negotiation of bilateral tax treaties and present it for adoption to the Committee at its 11th session in 2015. For status of work of that Subcommittee see its progress report.

Moreover, five practical papers on negotiation of tax treaties were drafted by experienced treaty negotiators on the basis of the inputs provided by officials from ministries of finance and national tax authorities in 35 developing countries, representing all regions of the world and published as Papers on Selected Topics in Negotiation of Tax Treaties for Developing Countries. A summary of the above papers will be included in the new practical manual on negotiation of bilateral tax treaties, as agreed by the Subcommittee.