Papers on Selected Topics in Negotiation of Tax Treaties for Developing Countries
Five practical papers were drafted by experienced tax 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. Through a novel demand-driven approach, this publication provides practical guidance to developing countries to effectively negotiate double tax treaties, especially those drawing upon the United Nations Model Double Taxation Convention between Developed and Developing Countries, having regard to the specific needs and interests of these countries.
The papers included in this publication were developed at the request of the United Nations Committee of Experts on International Cooperation in Tax Matters (the Committee) at its 8th session in 2012 and in follow up to the recommendation of an expert group meeting on “Tax treaty negotiation and capacity development”, which was held in New York in December 2012 with the participation of several members of the Committee and other tax treaty negotiators.
The outlines of the papers were prepared by experienced tax treaty negotiators and discussed during a technical meeting on “Capacity building on tax treaty negotiation”, which was held in Rome, Italy in January 2013 with the participation of 25 representatives of ministries of finance and national tax authorities from developing countries, representing all the regions of the world. This meeting was held as part of a joint project undertaken by the Financing for Development Office (FfDO) and the International Tax Compact (ITC), and funded by the German Federal Ministry for Economic Development and Cooperation.
The authors introduced the outlines of their papers followed by interactive discussions facilitated by selected members of the Committee and representatives of several international and regional organizations. See report of the meeting for full record. The discussion contributed to identifying the needs, skill gaps and challenges faced by developing countries in the area of tax treaty negotiation and taking stock of the available capacity development tools at their disposal. Taking into account those findings, the national participants and other experts then agreed on revised outlines of the papers.
As the next step, the papers were drafted by the authors and presented for discussion during the technical meeting on “Tax treaty administration and negotiation”, which was held in New York, in May 2013 with the participation of 32 representatives of developing countries, several members of the Committee, as well as representatives of international and regional organizations. Each paper was commented on by a designated lead discussant, representing relevant authority in a developing country focusing on relevance of the given paper in view of the experience of his/her country and proposed specific revisions/additions to the paper. Additional comments were provided by other participants during an interactive discussion chaired by a member of the Committee or a representative of an international organization.
Following the New York meeting, the authors revised and finalized their papers taking into account feedback received during the meeting. The papers were then presented to the Committee during its 9th session in 2013. The newly established Subcommittee on Negotiation of Tax Treaties – Practical Manual decided to include a summary of these papers in the new practical manual for the negotiation of bilateral tax treaties between developed and developing countries, which it would present to the Committee at its 11th session in 2015.
In parallel, given a lot of positive feedback received from developing countries on the papers and the urgent need for more assistance in the area of negotiation of tax treaties, FfDO published the papers in their entirety in the form of the current publication, for the benefit of tax treaty negotiators from developing countries, who are just starting their work.