PRESS STATEMENT
Country-Level Revenue Estimates – A Comparative Analysis of UN and OECD Subject to Tax Rules for 65 Member States of the G-24 and South Centre
Washington and Geneva, 23 July 2025
The South Centre & Group of Twenty-four today jointly released country-level revenue estimates of the UN & OECD Subject to Tax Rule (STTR) for their 65 combined Member States.
Results show higher revenues from UN STTR, and reinforce benefits of a UN Tax Convention.
Comparison of Tax Revenue Effects of United Nations and OECD Subject to Tax Rule for G-24 and South Centre Member States
By Faith Amaro and Sol Picciotto
The Subject to Tax Rule (STTR) seeks to address the historical imbalance in the allocation of taxing rights under international tax treaties by introducing within existing treaties a new article which makes the restrictions on source taxation conditional on the residence jurisdiction imposing a minimum level of tax on foreign-derived income. This paper presents a methodology for analysing the respective benefits of the STTRs developed by the Organisation of Economic Co-operation and Development (OECD) and the United Nations (UN). Applying this model to publicly available data for 2021, it also provides estimates of the possible revenue impact for the 65 Member States of the South Centre (SC) and the Intergovernmental Group of 24 (G-24). Our analysis indicates that the OECD STTR would have no impact on any OECD country treaty with a SC/G-24 Member State. Applying the prescribed 9% minimum rate to covered payments, only 100 treaties across 28 SC/G-24 Member States would qualify for improvement under the OECD STTR, with an estimated combined revenue gain of USD 55.6 million, 71% of which is concentrated in just five treaties. In contrast, the UN STTR, which does not specify a minimum rate, was modelled using rates of 9%, 10% and 15%. This resulted in estimated revenue gains of USD 212 million, USD 325 million, and USD 1,165 million across 171, 210 and 317 treaties, respectively. Given its complexity and restrictive scope, it seems pointless for any SC/G-24 Member State to join the OECD STTR. Instead, countries should focus on identifying treaties that cause unjustifiable revenue losses and consider revising them – either by adopting the simpler and broader UN STTR or implementing other measures such as active anti-abuse provisions to combat treaty shopping and tax avoidance.
Analysing the Impact of UN and OECD Subject to Tax Rule for G-24 and South Centre Member States
By Suranjali Tandon and Chetan Rao
The Subject to Tax Rule (STTR) is meant to address base erosion and profit shifting in cross –border transactions. The United Nations (UN) and Organisation for Economic Co-operation and Development (OECD)/Group of Twenty (G20) Inclusive Framework have developed models of the STTR that countries may choose to adopt in their treaties. This paper provides a review of these designs of two STTR models and proceeds to estimate the revenue gains for the Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development (G-24) and South Centre Member States that may arise from a STTR that covers different kinds of payments. The OECD STTR is limited to related-party payments and imposes thresholds based on mark-up and materiality, reducing its applicability in practice. In contrast, the UN STTR offers broader coverage, applies to both related and unrelated parties, and does not impose restrictive thresholds, making it more administratively feasible for developing countries. Although the estimated gains from the OECD STTR appear modest due to its narrow scope, the UN STTR shows greater potential. The analysis also highlights data limitations and the need for access to microdata for accurate country-level assessments.
Global Digital Compact: Charting a New Era in Digital Governance?
By Aishwarya Narayanan
The Global Digital Compact, adopted during the Summit of the Future in September 2024, is the first truly multilateral instrument which addresses issues relating to global digital governance in a comprehensive and systematic manner. While this is a remarkable step forward in terms of increasing representation, enhancing coordination and addressing fragmentation in digital governance, consensus was difficult to achieve and there remains considerable confusion around its interplay with existing initiatives and mechanisms within the United Nations system. Despite implementation efforts already being underway, its true impact and potential to bridge digital divides will only be revealed in the time to come.
STATEMENT BY DR. CARLOS CORREA, EXECUTIVE DIRECTOR OF THE SOUTH CENTRE, TO THE MINISTERS AND GOVERNORS MEETING OF THE INTERGOVERNMENTAL GROUP OF TWENTY-FOUR (G24)
22 April 2025, Washington, D.C.
The South Centre statement to the G24 Ministerial Meeting highlights the risks of a darkening global economic outlook and need for collective action at UN and FfD4 for addressing systemic issues & reforming the international financial architecture, especially for taxation & sovereign debt.
Advancing International Cooperation under the Global Digital Compact
By Danish
Bridging the global digital divide in new and emerging technologies, particularly Artificial Intelligence, will require developing countries to strongly leverage international cooperation to build digital skills, knowledge and gain access to these technologies which can accelerate their digital transformation and sustainable development. This emphasis on international cooperation is also deeply embedded in the Global Digital Compact, which was adopted as part of the Pact for the Future. This paper therefore looks at how international cooperation modalities have been included in the GDC across the different issue areas, how developing countries are already engaging with the GDC through their national initiatives, and provides some useful considerations going forward.
Will the Global Digital Compact ensure an equitable future for Developing Countries?
By Daniel Uribe
The Global Digital Compact (GDC), adopted by the United Nations General Assembly in 2024, aims to establish a framework for equitable digital transformation, particularly for developing countries. While the GDC acknowledges the importance of human rights, bridging the digital divide, and ensuring a just transition, it faces significant challenges in addressing structural inequalities and implementing robust accountability mechanisms. This paper examines the GDC’s potential to foster an inclusive digital future, highlighting the necessity of addressing fundamental rights, promoting business accountability through a legally binding instrument, and recognising the interconnectedness of digital inclusion with access to essential resources like energy, education, and healthcare.
Contribución del Centro Sur al Informe del Secretario General de las Naciones Unidas sobre la aplicación de la Resolución A/RES/79/7 de la Asamblea General sobre la “Necesidad de poner fin al bloqueo económico, comercial y financiero impuesto por los Estados Unidos de América contra Cuba”
Esta contribución del Centro Sur se presenta en respuesta a la solicitud del Secretario General como un aporte al informe del Secretario General de acuerdo a la resolución A/RES/79/7, con respecto a la imposición de medidas económicas, financieras y comerciales unilaterales por parte de los Estados Unidos de América, contra Cuba, en violación de los principios básicos de la Carta de las Naciones Unidas y el Derecho Internacional.
Will the Pact for the Future Advance a Common Global Agenda on the Challenges Facing Humanity?
By Viviana Munoz Tellez, Danish, Abdul Muheet Chowdhary, Nirmalya Syam, Daniel Uribe
At a time when multilateralism is needed more than ever to address the global challenges and rising geopolitical tensions, paradoxically, the capacity and delegated power of the United Nations (UN) to uphold a rule-based order to keep peace and security is being weakened. Even in an increasingly multipolar world, a retreat towards unilateralism by world powers masked as national sovereignty is dangerous and highly unfavourable for developing countries. In this light, the United Nations Pact for the Future, a new forward-looking agenda of commitments adopted by consensus by UN Member States in September 2024, is a welcome initiative. The Pact for the Future, nonetheless, is short in delivering commitments on transformative changes in global governance and solutions to the most pressing global challenges. This document briefly examines some of the actions and high-level commitments in the Pact of the Future to strengthen multilateral cooperation and provides recommendations for their implementation.
A RAFT FOR THE FUTURE: Can the Pact for the Future Deliver the Multilateral Titanic?
South Centre Statement
24 October 2024
The South Centre participated in the Foundation for Global Governance and Sustainability (FOGGS) event evaluating the Pact For The Future. The Pact is a crucial step but needs a concrete roadmap with clear actions & timelines to find solutions central to developing countries.
The Implications of Treaty Restrictions of Taxing Rights on Services, Especially for Developing Countries
By Faith Amaro, Veronica Grondona, Sol Picciotto
Taxation of cross-border services has been identified as a high priority issue in the United Nations (UN) negotiations to establish a new global framework for tax. This paper analyses the defects of international tax rules as applied to services, and their exploitation by multinational enterprises (MNEs), focusing on the impact on developing countries. Services have become increasingly important for economic development, but international tax rules favouring delivery by non-residents act as a disincentive to the growth of local services providers, particularly disadvantaging developing countries which are mainly hosts to MNEs. We analyse the restrictions on source taxation of services in tax treaties, particularly those based on the model of the Organisation of Economic Co-operation and Development (OECD), and show that their spread has been accompanied by a widening deficit in services trade of developing countries, while the weakening of their attempts to protect their tax base through withholding taxes has resulted in increasing losses of tax revenue. The paper combines detailed qualitative analyses of tax treaties with quantitative estimates of their effects on trade and tax revenues for services of five developing countries: Argentina, Brazil, Colombia, Kenya and Nigeria. Our analysis suggests that a new approach is needed for taxation of services, breaking with the residence-source dichotomy, and adopting formulary apportionment. This could be based on the standards agreed in the Two Pillar Solution of the OECD/Group of Twenty (G20) project on base erosion and profit shifting (BEPS) and developed now through the UN.
Reviewing the Implementation of Select Sustainable Development Goals – A Southern Perspective
By Yuefen Li, Viviana Muñoz Tellez, Vahini Naidu, Danish, Vitor Ido, Peter Lunenborg, Nirmalya Syam, Daniel Uribe
In line with the focus of the work of the South Centre, this paper specifically looks at the following Sustainable Development Goals (SDGs): Goal 1 – No poverty; Goal 2 – Zero Hunger; Goal 3 – Good Health and Well-being; Goal 9 – Industry, Innovation and Infrastructure; Goal 13 – Climate Action; Goal 14 – Life Below Water; Goal 15 – Life on Land; and Goal 17 – Partnerships for the Goals. Particular attention has also been paid to the concerns of least developed countries (LDCs) in relation to the SDGs.
The paper thus seeks to provide a review of the trajectory of the implementation of the aforementioned SDGs in the years since 2015 from the perspective of the Global South. It then spells out the drivers for the progress made and the challenges and the changing narratives in the world today. It also provides some concrete recommendations which can support developing and least developed countries in their sustainable development pathways.
