UN fairness framework perhaps not fair enough

International tax regimes are based on bilateral agreements entered into by sovereign states. The templates for such treaties are those of the Organisation for Economic Co-operation and Development and the United Nations Model Conventions. To further the interests of the international community, efforts are underway to draft a multilateral instrument addressing pressing issues in international taxation. The UN is working to establish a Framework Convention on International Tax Co-operation, also known as the Model Tax Convention.

During the past year and a half, successful stakeholder meetings have led to the publication of a revised draft, establishing its core principles. Follow-up online stakeholder discussions, organised by the UN Intergovernmental Committee (UN IGC) in June 2025, led to the setting up of three workstreams. Fundamental to each was the concept of fairness. This is recognised as the foundation of the rules governing international taxation. It also reveals the lack of a definition of fairness in international tax treaties.

The absence of an agreed definition affects the basis of international taxation and the way in which jurisdictions determine how taxes are levied. Academic consensus regarding the economic concept of fairness concentrates on interstate equality. This leads to the promotion of the principle of paying taxes where value is created. In an effort to promote fair taxation regimes, the UN appears to be edging towards the adoption of the concept of international fairness. This would ensure that all states are treated equally.

The principle of reconciling the needs of the Global South in the international tax system is obvious in the UN’s efforts to draft the convention framework. A key issue is ensuring justice for all parties. Although there is a focus on the rights of states to tax appropriate taxpayers, what has been overlooked is the rights of those taxpayers. A vague definition of fairness may lead to legislative changes in various jurisdictions that are not anchored in the fundamental rights of all parties to be treated equally.

States and taxpayers alike wish to see implemented an international tax regulation framework to ensure consistency and equality. However, the debate concerning the terms and implications of the concept of fairness is proving an obstacle to the expeditious agreement and implementation of the long-wished-for convention.

The UN convention aims to establish a universal standard of fairness. This would govern the way international tax law and regulation are enacted in individual jurisdictions. The more general such a standard is framed, the vaguer it will become. Because the term fairness has such far-reaching implications, it must not be open to the particular interpretation of each tax-levying entity. This will lead to internal disputes and litigation and strain international relations. The UN should set out a checklist of clear principles that safeguard the interests of all stakeholders involved in the taxation process. This will guarantee certainty and efficacy.

The UN IGC could benefit from the examples of other widely adopted international treaties. Instead of including the term fair in the text of the multilateral instruments, drafters have included principles of capacity-building and technical assistance. Compromise and agreement by global stakeholders are the foundation of the successful implementation and adoption of multilateral frameworks. The challenge that all treaties have to overcome is reconciling the needs of developed and developing economies. A number of treaties have achieved widespread acceptance by finding common ground despite conflicting interests.

The UN IGC aims to address the needs of developing economies. However, if it gives a broad construction to the word fair, it must also set out the basic principles underlying the concept. Because the international situation is rapidly changing, the convention cannot depend on a static functionalist approach. Drafting the treaty and its regulatory requirements should be carried out with the utmost care and precision. The UN IGC should ensure that it incorporates immutable standards of fairness and equity. The result should take into account the interests of administrations, commerce and individuals well into the future.

Mukesh Butani is the managing partner, Pranoy Goswami is a senior associate at BMR Legal. Research associate Spandana Koona also assisted with the article.