The EU has ABSTAINED in the vote on UN Resolution on Tax Cooperation

| Image Credits: UN General Assembly hall by Patrick Gruban

On behalf of the European Union (EU) and its Member States, Hungary delivered an explanation of vote regarding the UN General Assembly 2nd Committee resolution on tax cooperation. This statement was supported by Candidate Countries North Macedonia, Montenegro, Albania, Ukraine, and the Republic of Moldova.

The EU emphasized its longstanding commitment to inclusive and effective international tax cooperation, acknowledging its pivotal role in fostering global equity and economic stability. While the Union expressed a shared objective of establishing a robust Framework Convention (FWC) for international tax cooperation, it underscored reservations about the drafting process and specific provisions of the resolution.

EU’S POSITION ON THE RESOLUTION

Despite abstaining in the vote, the EU expressed dissatisfaction with the resolution's transparency, fairness, and substance. The Union maintained that consensus-based decision-making is critical for the legitimacy and effectiveness of any future framework, especially when addressing issues like taxation, which involve sensitive sovereign competencies and national implementation.

The EU also stressed the importance of an inclusive negotiation process. To that end, it identified several points of contention:

• Operational Paragraph 2 (OP2): The EU objected to the formal "adoption" of the Terms of Reference (ToRs), arguing that negotiators should use them as guidance rather than binding directives.

• Operational Paragraph 5 (OP5): Concerns were raised about the lack of emphasis on consensus-based decision-making for the negotiating committee’s organizational session in February 2025.

• Operational Paragraph 6 (OP6): The deletion of references to balanced regional representation in the Bureau was deemed a step away from inclusiveness.

The EU dissociated itself from these three paragraphs, signaling its principled objections while reiterating its readiness to engage constructively.

CONDITIONAL COMMITMENT TO ENGAGEMENT

The EU expressed regret that its constructive participation in negotiations had been met with distrust and noted that retaliatory tactics during the drafting process were counterproductive. Despite these challenges, the EU has compromised by postponing a decision on consensus-based modalities until February, underscoring its commitment to meaningful cooperation.

However, the Union warned that future engagement should not be presumed. The EU reaffirmed that a framework built on broad consensus is essential for developing a legally binding instrument likely to gain widespread ratification. If these principles are not upheld, particularly regarding decision-making modalities, EU Member States may reconsider their participation in the process.

LOOKING AHEAD

While abstaining from the resolution vote, the EU reiterated its support for international tax cooperation and the establishment of a negotiating committee. It cautioned, however, that any deviation from fairness, transparency, and consensus in the upcoming organizational session could jeopardize its involvement in shaping the future convention.

The EU remains committed to achieving a framework that ensures global inclusivity and effective implementation, aligning with its broader principles and priorities.

SOURCE/ SUPPORTING TEXT: 

• EU Explanation of Vote, UN General Assembly 2nd Committee: Tax Cooperation resolution | EEAS