UN vote challenges OECD global tax leadership
investing.comBy Leigh Thomas
PARIS (Reuters) — The Organisation for Economic Cooperation and Development's leadership on global tax coordination has come under threat after a majority of UN members backed an African-led initiative to bring international tax cooperation to the United Nations.
Many developing countries have lamented for years that they are unable to influence discussions on global tax cooperation at the OECD, where the rules for cross-border taxation are generally thrashed out.
Frustrated their voices had not been heard, on Wednesday 125 mostly developing countries backed a draft U.N. resolution proposed by Nigeria calling for a «framework convention on international tax cooperation».
Some 48 mostly developed countries, including Britain, Germany, Japan and the United States were against while nine countries abstained, including OECD members Iceland, Mexico, Norway and Turkey.
Welcoming the vote as a «beacon of hope», the African Union said in a statement that it would «facilitate the access of much needed financial resources».
OECD head Mathias Cormann said that the 38-member group was «proud of its record of achieving consensus-based solutions» on international tax cooperation.
The Paris-based policy forum has for decades coordinated among its 38 mostly developed country members and other countries on international tax issues ranging from guidelines for intra-group transfer pricing to how tax authorities can share bank account information.
It also steered a 2021 deal among nearly 140 countries to rewrite the rules of cross-border taxation for the first time in a generation to bring them up to date for the age of digital commerce where big multinationals like Apple (NASDAQ:AAPL) and Meta (NASDAQ:META) can book profits
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