On 20 July 2026, the United Nations released the Draft Protocol on the Taxation of Income from Cross-Border Services and the Draft Protocol on the Prevention and Resolution of Tax Disputes. One day later, on 21 July 2026, the UN released the Co-Leads' Draft Framework Convention itself. Together, these three documents constitute the first complete draft texts for the Framework Convention and its two early protocols.
All three drafts will be discussed at the fifth substantive session of the Intergovernmental Negotiating Committee, scheduled to take place in New York from 3 to 13 August 2026. Further revised drafts are expected ahead of the sixth session, scheduled for Nairobi from 30 November to 11 December 2026. The Committee's mandate runs through three further sessions in 2027, with submission of the final texts to the UN General Assembly targeted for the first quarter of its eighty-second session in September 2027.
Background
The process traces back to December 2022, when the UN General Assembly adopted Resolution 77/244, launching discussions on international tax cooperation. Resolution 78/230, adopted in December 2023, established an ad hoc committee to draft Terms of Reference for a Framework Convention. Those Terms of Reference were approved on 16 August 2024 and subsequently adopted by the General Assembly in Resolution 79/235 in December 2024, which also formally established the Intergovernmental Negotiating Committee.
At its organisational session in February 2025, the Committee selected its Bureau, agreed on decision-making procedures, and chose the prevention and resolution of tax disputes as the subject of the second early protocol. A roadmap and guidelines for development through 2027 followed in April 2025. More than 120 stakeholder submissions were received in late 2025, and a further 130 in early 2026, as negotiations moved from scoping into focused technical drafting.
The Framework Convention
The Co-Leads' Draft Framework Convention is organised into 28 articles. It addresses the Convention's objectives and guiding principles, commitments on sustainable development, fair allocation of taxing rights, high-net-worth individuals, tax-related illicit financial flows, harmful tax practices, and mutual administrative assistance.
The draft confronts the relationship between the Convention and existing bilateral tax agreements directly. State Parties would be required to take legislative, administrative, and other measures to implement their obligations. Existing treaty rights and obligations are not disturbed, but State Parties would be expected to take progressive steps toward aligning existing agreements with the Convention's objectives. Where a State Party requests renegotiation or amendment of an existing agreement to achieve that alignment, the other State Party must enter into negotiations in good faith and without undue delay.
On governance, the draft establishes a Conference of the States Parties and a subsidiary body. The Conference would promote and review implementation, facilitate information exchange, consider technical assistance needs, and adopt future protocols. The draft also covers financial resources, amendments, signature, ratification, and entry into force, though it remains subject to further negotiation.
Draft protocol on cross-border services
The Draft Protocol on the Taxation of Income from Cross-Border Services seeks to establish a comprehensive framework for allocating taxing rights over income from cross-border services. It applies broadly to taxes on income from services, including digital services taxes, equalisation taxes, and levies with a similar economic effect. VAT, GST, and other generally applicable consumption taxes are expressly excluded.
The protocol addresses three categories of income: fees for services, automated digital services, and insurance premiums. In each case, the draft allocates a shared taxing right to both residence and source jurisdictions, with source-country taxation subject to maximum rates that have not yet been determined.
For fees for services, the protocol applies to payments made in consideration of services, excluding employment income. Sourcing rules draw on factors including where services are physically performed, the residence of the consumer, and the residence of the payer.
Automated digital services are defined as services provided through the internet or another electronic network with minimal human involvement. The draft lists examples including online advertising, social media platforms, online intermediation platforms, search engines, cloud computing, digital content services, and online gaming. Special sourcing rules focus on the location of consumers, end users, and user-generated data.
For insurance premiums paid to non-resident insurers, the draft contains specific rules for premiums and reinsurance payments, with annuity contracts and insurance products with substantial investment components excluded from the definition.
A separate article addresses services delivered through employees or agents physically present in another jurisdiction. In those cases, the source jurisdiction may tax profits attributable to those activities on a net basis. Where there is no physical presence, taxpayers may elect net-basis taxation, with profits determined through a reasonable allocation of profits from the relevant business activities by reference to gross revenues generated in that state compared to total gross revenues.
The protocol does not permit reservations by Parties. Entry-into-force provisions, including the number of ratifications required and the protocol's interaction with existing treaties, are not yet complete. Withholding tax rates remain unresolved, discussions on international shipping and air transport income are ongoing, and various institutional and implementation provisions are still under negotiation.
Draft protocol on dispute prevention and resolution
The Draft Protocol on the Prevention and Resolution of Tax Disputes brings together a broad set of dispute-prevention tools and resolution mechanisms.
On prevention, the draft includes provisions on bilateral and multilateral advance pricing arrangements, advance rulings, cooperative compliance programmes, simultaneous tax audits, and joint audits. Capacity-building support for implementing jurisdictions is also contemplated.
On resolution, the mutual agreement procedure serves as the central mechanism. The draft adds mediation, conciliation, and arbitration. State Parties retain some flexibility through possible reservations to certain mechanisms and alternative approaches for the interaction between the protocol and existing treaty-based procedures. The draft also proposes a facilitative role for the United Nations, including maintaining rosters of mediators, conciliators, and arbitrators.
What practitioners should watch
Several critical parameters remain open across the three documents: withholding tax rates under the services protocol, entry-into-force thresholds, and the precise mechanics of interaction with the existing treaty network. The fifth session in New York in August 2026 will be the first real test of whether negotiating positions are converging on these contested points.
Tax practitioners advising multinationals with significant cross-border service income, digital business models, or transfer pricing disputes should begin mapping exposure now. The services protocol in particular could materially alter withholding tax obligations in source jurisdictions that ratify it. The dispute resolution protocol, if adopted widely, would introduce new procedural options alongside, and in some cases in place of, existing MAP and arbitration provisions under bilateral treaties.
The UN has indicated that multi-stakeholder consultations will be organised ahead of future sessions. Engagement through those processes remains one of the few channels through which businesses and practitioners can directly influence draft language before texts are finalised.