UN Negotiates New Rules for Taxing Cross-Border Services

Developing countries push for new nexus rules to capture digital business revenue

Published on Feb. 10, 2026

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Developed and developing economies are negotiating a new United Nations tax treaty that would determine how taxing powers are allocated for cross-border services. Developing countries are advocating for the UN to create a treaty that would mandate the use of new nexus rules, arguing that traditional rules based on physical presence fail to capture digital business activity within their borders, leading to tax revenue losses.

Why it matters

The outcome of these negotiations will have significant implications for how multinational companies are taxed on their cross-border service offerings, particularly in the digital economy. Developing countries are seeking to ensure they can effectively tax the digital business activity happening within their jurisdictions, while developed economies may be more resistant to changes that could impact their tax bases.

The details

At a meeting of the UN negotiating committee in New York, Africa's 54 countries pushed for the treaty to include new nexus rules that would give developing countries more taxing power over cross-border services. The current nexus rules, which are based on physical presence, are seen as outdated in the digital age and failing to capture the true economic activity happening within developing country borders.

  • The UN negotiating committee met in New York on February 10, 2026 to discuss the proposed tax treaty.

The players

Africa's 54 countries

The group of 54 African nations advocating for new nexus rules in the proposed UN tax treaty to capture more tax revenue from cross-border digital services.

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What’s next

The UN negotiating committee will continue discussions on the proposed tax treaty, with developing countries pushing for new nexus rules to be included.

The takeaway

These UN negotiations highlight the growing tension between developed and developing economies over how to effectively tax multinational companies operating in the digital age, with developing countries seeking to ensure they can capture their fair share of tax revenue from cross-border digital services.