Urge the UN to fix the global tax system!

Campaigning by unions and allies has compelled the UN to finally begin talks on improving global tax rules.

But these talks will only succeed if we keep the pressure on leaders to make ambitious, meaningful reform.

That's why we need your union to sign our Open Letter - enter your name and organisation via the petition block now ->

• Broken global tax rules allow corporations to swindle billions out of public service budgets and into offshore bank accounts.

• By hiding profits offshore, corporations limit the ability of workers and unions in the private sector to negotiate higher wages.

• Lack of global coordination is creating a toxic race to the bottom on taxes.

• Global tax rules effect all of us - and must be negotiated at the UN with accountability and transparency where, unlike the OECD, all countries have a seat at the table.

• If unions don't act to shape this agenda, then tax-havens and corporate lobbyists will.

The time for reform has come!

Read the Open Letter

PROMOTION OF INCLUSIVE AND EFFECTIVE TAX COOPERATION AT THE UN

By adopting a Resolution on the “promotion of inclusive and effective tax cooperation at the United Nations”, the 193 UN Member States have agreed to begin intergovernmental discussions at UN Headquarters on ways to strengthen the inclusiveness and effectiveness of international tax cooperation.

The UN Secretary-General Antonio Guterres will soon finalise a report outlining options for further intergovernmental discussions.

The undersigned unions call on the Secretary-General and on the UN member states to endorse key principles indispensable to an accountable, ambitious and transparent global decision-making on tax matters.

To the UN Secretary General,

Tax competition, corporate tax avoidance and the opacity surrounding multinational tax planning, constitutes a “race to the bottom” that directly affects workers and their unions. Ineffective corporate tax rules harm employment as corporate profits are continuously shifted, using sophisticated administrative loop-holes, to tax havens where they cannot serve real investment, employment and higher wages. Further, tax avoidance and the under-taxation of capital feed into inequalities and seriously undermine the ability of states to fund necessary investment, education, health services, water, energy, social protection, and the general provision of public services at national, regional and local level. Tax dodging also stand in the way of financing just transitions to low carbon energy. Especially in Global South, economies are locked up in unsustainable levels of debt with limited growth prospects.

In this context, the undersigned organisations follow with great interest the current work on the “promotion of inclusive and effective tax cooperation at the United Nations”. A strengthened international tax cooperation at the UN can meet our demands for an accountable, ambitious and transparent global decision-making on tax matters. It can also provide an equal playing field for developed and developing countries.

In a context of corporate profits-driven inflation and when public budgets are under pressure particularly in the Global South, there is an urgent need to strengthen the taxation of profitable multinationals and the wealthy. In this regard, intergovernmental negotiations under the auspices of the UN are most welcome.

Negotiations must not, however, set the clock backwards by delaying or suspending the, albeit insufficient, achievements so far in terms of international, regional and national tax cooperation. In particular, the labour movement encourages governments to introduce without further delay ambitious global minimum taxes and appropriate measures to secure tax justice and transparency.

Intergovernmental negotiations must aim at establishing a UN Framework Tax Convention, which would lay down the foundation for a global tax governance at the UN and related institutions. Such Framework Tax Convention must put in place an inclusive, accountable and effective institutional setting to which all UN Member States are parties and able to set the agenda for international tax standards.

Intergovernmental negotiations under the auspices of the UN must commit from the outset to corporate taxation as a key instrument for development and sustainable business models. The principle of allocating taxing rights to countries where economic activity takes place must underpin the intergovernmental negotiations to ensure that revenue allocation is fair and not skewed towards those countries who can dominate rule-making or home the majority of the world’s multinationals. Transfer pricing rules and the related arm length principle cannot be considered as a basis for sustainable international tax standards. Recent attempts to improve corporate taxation in a digitalizing economy have only added more complication and uncertainty to the system. A reform that secures tax certainty and increases revenues can only be based on the principle that multinational enterprises must be taxed as single global entities. Further, it is high time to move away from tax competition as well as the residence vs source jurisdiction debate. These are divisive narratives which only benefit tax havens and tax avoiders.

In due course, a new UN governance must be given the financial and political means to address meaningful reforms such as the introduction of formulary apportionment, 25% minimum effective tax rates, and a robust technical standard for public country-by-country reporting. A global tax governance must also support governments in their efforts to more effectively tax capital, such as wealth, capital gains and monopoly rents.

In the course of the upcoming UN negotiations, trade unions should be able to hold their governments accountable. Transparency should therefore be secured throughout the intergovernmental process. Country positions, negotiating texts, overall progress and potential stalemates should be made public. Unions, civil society and experts should also be able to feed submissions through regular consultations and observer status.

Sincerely,