Tax Dispute Resolution Under the UN Convention on Tax: Lessons from investment arbitration

The negotiation of a UN Framework Convention on Tax represents a defining moment for international tax governance. The Convention aims to address long-standing coordination gaps in the global tax system through a multilateral framework under the UN. One of the most sensitive aspects of the negotiations is the proposed Protocol on the prevention and resolution of tax disputes.

No comprehensive tax dispute settlement mechanism currently exists. Negotiators are weighing different options, from state-to-state mechanisms like the Mutual Agreement Procedure (MAP) to various forms of arbitration, including mandatory binding arbitration (MBA). ISDS, a mechanism originating in investment law, has entered discussions by analogy. Some states have cited negative experiences with ISDS to argue against arbitration, notably MBA. This raises important questions about the extent to which ISDS and MBA are comparable.

Drawing on over a decade of IISD experience with ISDS reform at UNCITRAL, this event presents our new policy brief, which explains why ISDS is ill-suited for tax disputes and provides a framework for evaluating other arbitration options under the Protocol, including MBA.

The launch was followed by a roundtable with experts and government officials, as well as a Q&A session. For negotiators, policymakers, organizations, or anyone involved in shaping the second Protocol, this session offers more clarity to navigate the choices ahead-and help ensure the Convention gets the Protocol right.

Our speakers

• Alexandra Readhead, Director, Tax and Sovereign Debt Program, IISD
• Frederik Heitmuller, Associate Postdoctoral Fellow - International Centre for Tax & Development
• Lise Johnson, Partner, Curtis, Mallet-Prevost, Colt & Mosle LLP
• Anthony Munanda, Head of Domestic Resource Mobilization, African Tax Administration Forum
• Gian Sandri, Senior Policy Advisor and Tax Treaty Negotiator, Swiss Federal Department of Finance