Global taxation vision: a paradigm shift in the UN initiative

Recently, the UN has taken concrete steps to transform the global tax environment. The goal would be to create a fairer and more efficient international tax framework, but mostly suitable for developing countries. Little is known about the structure and rules of the new tax system, however, it seems that after the ongoing global tax reform led by the OECD (i.e. the two-pillar solution including the global minimum tax), the “Framework Convention on Tax Cooperation” to be drawn up by the UN may be the next significant innovation in the field of international taxation. This can affect corporate groups, governments, tax authorities and wealthy individuals alike.

In 2013, the UN already published a “practical handbook” on the subject of transfer pricing specifically with the considerations of developing countries in mind. Since then, two updated versions of this material have appeared, the latest in 2021. As harbingers of the aforementioned framework agreement, these publications already serve as guidelines and provide support to multinational corporate groups and relevant governments in the fight against tax evasion.

“Although the UN transfer pricing guidelines lead to few fundamental or conceptual differences, there are some interesting ones, such as the so-called Sixth Method or the institution of the presumed affiliate. Therefore, those corporate groups that have interests in a country that follows the UN model may want to take a closer look at the local rules.”

– said Péter Gémesi, director of Deloitte’s tax department.