Towards a New Solution for Taxing Cross-border Services? Trade-offs in Designing UN Tax Convention Protocol 1

<p dir="ltr">This brief analyses the institutional trade-offs facing negotiators of Protocol 1 on cross-border services in a digitalised and globalised economy under the proposed United Nations (UN) Framework Convention on International Tax Cooperation. It examines design choices across legal form, nexus, tax base, thresholds, and treaty interaction, and situates them within broader administrative and political constraints. Drawing on national practices and existing models, it shows how fiscal interests, legal infrastructure, and strategic alignments may shape countries’ negotiating positions. Rather than offering a singular blueprint, the brief maps the range of institutional pathways available, and the trade-offs they entail. It argues that the success of Protocol 1 will depend not just on technical feasibility, but on aligning legal design with political incentives and uneven capacities. Even if outcomes remain partial or uneven, the process may still shift expectations and institutional norms.</p>