The negotiations of the ‘UN Framework Convention on International Tax Cooperation’ (UNFCITC) have reached a critical phase. At stake are fundamental questions of power, representation and global justice. The fifth session of the UNFCITC is expected to present a draft text in the beginning of August. With this post, we continue to report on the challenges and opportunities of these historic deliberations that aim to “establish an inclusive, fair, transparent, efficient, equitable and effective international tax system.” Germany could play a pivotal role in a time of democratic and social welfare decay, fueled by an escalating inequality crisis – or it could act as a bulwark of the old-world order, which reeks of imperialism and Second Estate privileges for the “nobility” of our time.
The call to “tax the rich” is not just about ensuring that high-net-worth individuals (HNWI) and multinational corporations pay their fair share of taxes on profits, income and wealth. The absurdity of the recent first trillionaire and his unimaginable power should give all of us reason to rethink the current system. As economist Gabriel Zucman underscores, extreme wealth is extreme power, and therefore a profound challenge to democracy.
While the founding of the United Nations reflected aspirations for a more equitable, postcolonial world order in which newly independent states would have a seat at the table, the international tax regime remains deeply entrenched in a logic of racial capitalism and imperial extractivism, as legal scholar Steven Dean points out. Created during the height of colonialism under the League of Nations, the current tax regime continues to be dominated by the US-led OECD. As a result, a relatively small group of wealthy nations, such as the USA, Switzerland and Germany, have played a disproportionate role in shaping the rules that govern international taxation, which mostly benefit economic elites in those and other Global North countries. This has contributed to persistent imbalances in tax rules that are largely exclusionary of Global South countries’ voices and needs. After decades of efforts, it was the Africa Group within the UN that championed the UNFCITC process into existence in 2023.
Yet, while the current US-led system has benefited Global North countries, including Germany, it is important to highlight an often-overlooked critique: they, too, lose substantial amounts of tax revenue under the existing rules. Over the past century, the current tax regime facilitated systemic corporate tax abuse and private tax evasion, resulting in global annual revenue losses estimated at around half a trillion US dollars.
Countries such as Germany increasingly experience negative impacts, for example due to multinational corporations shifting their profits into low-tax jurisdictions. Studies have shown that key players in the digital economy, including US companies such as Google, Netflix, and Microsoft, cost Germany billions of euros every year due to profit shifting. Additionally, German private wealth – the biggest in Europe – is largely untaxed, highly concentrated, and mostly inherited. An international coordinated wealth tax (after Spain’s model) could raise $2 trillion annual revenue worldwide. Germany is estimated to gain around €28 billion annually from a re-introduction of a wealth tax.
The current situation has been made possible and exacerbated by the pervasive use of financial secrecy jurisdictions (aka tax havens). Many of these were originally established by British colonial officials, financial advisors and lawyers, to move assets into UK overseas territories during the onset of decolonization. While (former) UK secrecy jurisdictions continue to play an important and pernicious role, the USA, Switzerland and Germany are now outranking them as the world’s biggest enablers of financial secrecy.
For African countries, this international tax and finance system has had devastating effects, leading to an estimated $88.6 billion in annual revenue losses due to illicit financial flows (IFFs). That is more than double the amount the continent receives in official development assistance (ODA). In combination with the rise of neoliberal economic thinking in the late 1970s, in which private sector actors were prioritized over government-led investments, industries have stayed underdeveloped. Instead, African economies have been forced to rely on exports of raw materials within extractivist logics and limited opportunities for domestic resource mobilization (DRM). They also continue to suffer under an unequal international financial system, with several African governments currently spending more on debt servicing than on public health or education. For many of them it is highly unlikely that they will be able to reach the Sustainable Development Goals (SDGs) by 2030.
The UN Tax Convention: A Historic Opportunity?
The decision to give the UN a formal mandate for the development of a Framework Convention marked a significant shift – some would even consider it a historic moment – away from the dominant OECD process to a more democratic approach to tax norm-setting. The adoption of respective resolutions, culminating in the Terms of Reference (ToR) of the UNFCITC in 2025, established an intergovernmental process in which all UN member states are expected to engage constructively in building a more inclusive, fair and efficient international tax system. Paragraph 7 of the ToRs stipulates that states should remain committed to this goal “in terms of process and substance”. Furthermore, the ToRs state that the convention should establish “an inclusive, fair, transparent, efficient, equitable and effective international tax system for sustainable development, with a view to enhancing the legitimacy, certainty, resilience and fairness of international tax rules, while addressing challenges to strengthening domestic resource mobilization”.
Additionally, paragraph 9 of the ToRs includes the principle that the negotiations be aligned with “States’ obligations under international human rights law”. It also states that the process should be “universal in approach and scope” and “fully consider the different needs, priorities and capacities of all countries, including developing countries, in particular countries in special situations”.
These provisions clearly stipulate that the objectives and principles of the ToRs, including states’ human rights obligations, are intended to guide the negotiations throughout the process. They are not presented as optional considerations to be invoked selectively by delegations, but as principles that should inform both the conduct of the negotiations and the substance of the final agreement.
Taxation and international cooperation in tax matters are henceforth no longer framed as merely technical issues (which they arguably never were in the first place). Rather, this UN process places them within a broader human rights-based framework, where sustainable development for all, on equal terms, is not an optional aspiration but a guiding principle and purpose of political, social and economic ordering. As a consequence, respective negotiation processes should be informed by the principles of participation, inclusion, non-discrimination, fairness, transparency and efficiency.
Against this background, one can draw a decisive conclusion for the assessment of Germany’s position and negotiation outcome: Germany is bound, also in the context of treaty negotiations, by its (extraterritorial) obligations under international human rights law. It owes these obligations not only to its own citizens, but also to those affected abroad whose ability to realize their rights is influenced by the international tax architecture and the distribution of taxing rights between states.
In this context, the UN Committee on Economic, Social and Cultural Rights’s statement on Tax policy and the International Covenant on Economic, Social and Cultural Rights is particularly relevant. In this landmark statement, the Committee re-emphasized that “[t]axation is a key instrument for mobilizing resources” to realize human rights and that cooperation between states is a prerequisite for their realization. This concerns central rights such as the right to food, housing, education, and health.
Germany has signed and ratified the International Covenant on Economic, Social and Cultural Rights (ICESCR) that the Committee’s statement is based on. Germany has also been an active member of the UN and participated and shaped the negotiations around a UN Tax Convention and its two early protocols from the start. The lead negotiator sent by the German Federal Ministry of Finance is Michael Braun, who has delivered nearly all of Germany’s oral submissions during the first four rounds of UNFCITC negotiations, held in New York and Nairobi. He has also served as a vice-chair on the intergovernmental negotiating committee, as well as a co-lead of Workstream III (the protocol on dispute prevention and resolution). While many experts see a fundamental link between tax justice and the realization of human rights, Germany has so far not meaningfully engaged with this aspect in its submissions. In light of existing human rights obligations and the commitments in the ToRs, the subsequent conduct by the German representative appears concerning.
Germany’s Negotiating Strategy: Bulwark of the Old Order?
During the first two rounds of Intergovernmental Negotiating Committee (INC) meetings, which took place in August 2025 in New York, a charming and cheerful, Pepsi in front, Michael Braun was mostly seeking clarifications and referencing his confusion, for example with “the distinction between principles and commitments” (at 01:43:20). While Mr. Braun’s oral submissions often seemed benevolent and innocent, the position he articulated on behalf of the German government reflected a rather hard-nosed Realpolitik, focused on sovereignty, non-binding commitments, and – most importantly – consistently referring back to “existing [OECD] frameworks” (e.g., at 00:50:35). Furthermore, Germany aligned its interventions with the UK, Switzerland and other dominant players that benefit from the existing Western-dominated international tax order during the third session in Nairobi.
However, during the same session in November 2025 (in Nairobi) Braun also stated: “I have not heard anyone saying that what is existing is sufficient. So, indeed, I agree if that were the case, we wouldn’t be here. [So], yes, it is true, there are countries, and not few countries, for whom the existing frameworks do not work” (at 02:04:36).
While Germany still recognized “the important role of tax cooperation to foster development, including through strengthening domestic revenue mobilization in line with environmental and climate goals” (at 1:37:05) early during the fourth session back in New York in February 2026, a shift had occurred between negotiation rounds. This might have been the result of the very well-organized African Group which pushed ahead in Nairobi, making their positions much stronger and a successful outcome for the G77 more likely.
Among the 28 draft articles of the Framework Convention under negotiation, the “Fair Allocation of Taxing Rights” (currently Article 5) initially took centre stage. The February 2026 draft of Article 5 recognizes that all jurisdictions in which value is created, markets are located, revenues are generated, or economic activities take place, should have the right to tax a portion of the income arising from those activities. Article 5 could help curb tax abuse by multinational corporations, which affects African economies particularly severely, as an estimated 65 per cent of illicit financial flows are linked to commercial activities. However, civil society organizations have criticized the current draft for not explicitly addressing multinational enterprises, arguing that stronger provisions would be necessary to fully address these challenges.
In a global economy, the allocation of taxing rights is central because it determines which country has the authority to tax income arising from cross-border economic activities. The current international tax regime, largely built around Double Taxation Agreements (DTAs) based on the OECD Model Tax Convention, tends to favour countries where multinational corporations are headquartered and relies heavily on physical presence in determining taxing rights. However, this approach does not adequately reflect the realities of the digital economy, where companies such as Netflix, Amazon, or Microsoft can generate substantial revenues in countries without maintaining a significant physical presence there.
Combined with the arm’s-length principle governing transfer pricing, which treats subsidiaries of the same multinational corporation as if they were independent companies trading with one another, the system creates opportunities for multinational corporations to shift profits to subsidiaries in low-tax jurisdictions – often legally. Therefore, most Global South countries argue that taxing rights should be more closely linked to where economic activity takes place, for example where consumers, users, workers or production sites are located, rather than primarily where companies are headquartered or profits are reported. With many large corporations headquartered in wealthier countries, significant inequalities in taxing rights have emerged and become embedded in the existing network of bilateral tax treaties.
Therefore, as negotiations continued and became more contested, the debate over the renegotiation of existing DTAs became particularly important and changed the dynamics of the discussions. Michael Braun appeared guarded and almost combative during the fourth session in February 2026, when commenting on Draft Article 5. Initially, a more somber Braun declared that “Germany is not in a position to support proposals that would alter the character of the convention by moving it towards binding, self-executing commitments” (at 1:35:56), a stance that effectively strips the convention of the very enforcement mechanisms necessary for meaningful reform. More importantly, later that day a rather nervous and fidgety Braun stated that Germany was “not willing to terminate or renegotiate existing DTAs unless this is the outcome of bilateral negotiations with the affected country” (at 00:35:47).
While many Western European negotiators took the same position as Germany, Global South countries perceived this statement as a direct attempt to undermine the UN process. Indeed, several delegates from the African Group, including Kenya, the African Union, and ATAF, responded swiftly. They reminded their colleagues that the fundamental reason why they are negotiating a UN Framework Convention was because of the imbalances and unfairness of DTAs and tax treaties that are currently in place, which are heavily skewed in favor of OECD states. Hence, keeping DTAs in place would perpetuate the challenges faced by developing countries.
Human Rights Require Money
By refusing to review and adjust its existing treaty network, Germany risks violating its obligations arising from UN human rights treaties. It also goes against its commitments to the 2030 Agenda for Sustainable Development, since the necessary resources to allow for a green transition in developing countries will simply not exist without an adjustment of the international tax regime. “Many of the same governments that claim to support human rights are fighting the hardest to maintain a tax system that deprives governments of the revenues they need to fulfill rights,” Camila Barretto Maia, executive director of the Global Initiative for Economic, Social and Cultural Rights, stated.
This is why international civil society organizations call not only for a renegotiation of existing DTAs as a principled position, but also for an adjustment of the current Draft Article 4 of the Framework Convention on sustainable development, which should add a commitment to “ensure that fiscal systems are fully in line with the UN Member States’ obligations to progressively realize human rights to the maximum of their available resources” (see Art 2 (1) ICESCR) and ensure sustainable development.
What is at stake in the UNFCITC negotiations then is not merely institutional preference or technical treaty design, but ultimately – as various numbers show – the fiscal capacity of States to fund basic public services and fulfill economic and social rights. This is all the more important given the unprecedented decline in official development assistance, in combination with the unsustainable debt burdens many countries are facing.
Therefore, Germany’s rather short-sighted decision to stick to old, existing OECD-centered frameworks that block the necessary domestic resource mobilization in Global South countries has consequences far beyond diplomatic procedure. It violates Germany’s extraterritorial obligations in human rights law, as its position directly shapes whether governments in the Global South can fund hospitals, schools, transport systems and social protection. Because, as Professor Attiya Waris, UN independent expert on foreign debt and human rights, succinctly put it: human rights require money.
In Germany’s Own Interest
Importantly, Germany and its citizens stand to gain substantially from a fair and transparent international tax system. The Tax Justice Network estimates that the German State loses €32 billion in tax annually due to corporate tax abuse alone. Meanwhile, Germany’s inequality has risen sharply in the past 50 years, and due to its regressive tax system, is unable to provide basic needs to its citizens, such as sufficient social housing. Yet, earlier this year, OECD countries, including Germany, bent their knee to and accommodated demands from the Trump administration by agreeing to exempt US multinationals from elements of the OECD’s agreed framework (negotiated mostly by the Biden administration) of a Global Minimum Corporate Tax (aka Pillar Two) in a “side-by-side agreement”. These tensions and concessions between EU countries and the USA reveal that the OECD framework is becoming structurally incapable of delivering meaningful progress, including for countries such as Germany that helped design it.
Currently, UN Tax Convention negotiations are ongoing behind closed doors, in Zoom meetings between member states only. With a full draft treaty expected before the 5th session of the Intergovernmental Negotiating Committee in New York in August, the negotiations have now reached a pivotal stage. With Germany already having taken over the leading role as a donor in international cooperation, it is the perfect time for the German government to be a bellwether of necessary change.
Bellwether or Bulwark?
So instead of continuing to be a bulwark of the old-world order, negotiators should embrace the future and support a fairer international tax system that is in the making. In his oral submissions, Michael Braun has already acknowledged that the current system does not work for many countries. Now is the time for action instead of empty words. As a self-proclaimed leader of multilateralism, sustainable development and human rights, Germany must move beyond the old-world order that is rooted in colonialism and exploitation, and instead support a democratic system of international tax cooperation – one capable of enabling states not merely to service debt, but to fund dignity and development and to take action against climate change.
Acknowledgements: The author gratefully acknowledges Sarah Imani for her thoughtful comments and legal expertise during the drafting process. Any remaining errors are the author’s own.