GRI 207 – Tax Sustainability Reporting

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GRI207 – Tax Sustainability Reporting

There are now numerous initiatives at various national and international levels to promote sustainable growth. As early as 2015, the United Nations recognized in defining its 17 Sustainable Development Goals that taxes play a central role in this effort. At the European regulatory level, there are currently proposals to incorporate taxes into efforts to achieve sustainable growth. Specifically, this means that as of January 1, 2021, all companies that apply the GRI framework and have identified taxes as a material sustainability issue are required to apply the GRI 207 standard in their reporting.

Realignment of tax reporting

The changing regulatory environment requires a strategic reorientation of corporate tax reporting. First, it is necessary to raise awareness within the organization of the fundamental connection between taxes, tax transparency, and sustainability reporting. This awareness must then be integrated into the overarching tax strategy. This means that the organization must align its tax principles and objectives in a way that meets transparency and sustainability requirements. At the same time, there is a need for the continuous development of processes and measures that ensure tax transparency and sustainability aspects are effectively integrated into business operations. A key component of this process is defining the approach to tax sustainability reporting and identifying opportunities and risks in order to proactively respond to potential challenges.

Integrating these requirements presents new challenges for the tax function and necessitates a wide range of measures. To implement tax sustainability reporting effectively and efficiently, a digitalization strategy is needed to operationalize data collection and visualization, along with a willingness to make the necessary process adjustments.

Monitoring & Improvement
of the Tax CMS

Integration into Tax Strategy and Planning

Report Layout / Format
(HTML; XBRL)

Integration into
Ongoing Tax Reporting

Data Identification and
Generation

Adaptation of Processes,
Guidelines, and Measures

Tool selection and implementation

Impact analysis

Definition of stakeholders
and report content

In addition to the GRI Standards, other recommended frameworks for sustainability reporting include the German Sustainability Code, the UN Global Compact, and the OECD Guidelines for Multinational Enterprises. GRI is now an established partner of EFRAG (European Financial Reporting Advisory Group) and thus plays a key role in developing a core standard for sustainable business reporting at the European level. Whether and to what extent GRI 207 will become established as a standard in the future or even be transposed into national law remains to be seen. With the draft of a European social taxonomy, another initiative is already on the table that is intended to complement the existing environmental taxonomy. Of particular interest here are the provisions regarding tax planning and transparent tax reporting. It remains to be seen what measures will be taken to implement these criteria in practice in the future.

ESG

Sustainability Services for Tax, Digital, and Financial Advisory

From CSRD, ESRS, and EU taxonomy to GreenTax & Energy. Sustainability and ESG have been a key pillar of our advisory services for years. A comprehensive overview of our ESG services from WTS Tax and WTS Advisory is available here.

Learn more

We are happy to assist you with the following services:

Defining and integrating tax sustainability and transparency into your corporate culture and tax strategy
Scoping analysis to ensure compliance with reporting requirements based on the reporting components (e.g., analysis of the existing CbCR).
Definition, preparation, and analysis of tax sustainability and transparency reports
Data identification and generation within existing systems and processes, as well as implementation of necessary process and system adjustments
Sustainability reports as a continuous component of tax reporting in real time through integration into existing end-to-end income tax processes
Selection and implementation of tools for reporting in accordance with GRI 207
Development of a digital dashboard for visualizing and monitoring defined sustainability criteria and presenting the tax impact
Benchmarking of tax sustainability and transparency using various global sustainability rankings to optimize the company’s individual ESG or CSR rating

With our support, you can familiarize yourself with the requirements right now.

This offers you the following benefits:

1. Regulation, Taxation & Compliance

GRI 207 Readiness, as soon as internal stakeholders decide to report according to GRI
Proactive management of tax sustainability criteria
Agile response to future mandatory legal regulations at the national or EU level regarding Tax-ESG reporting
Contribution to a “practiced” tax compliance management system

2. Reputation, Trust & Employer Attractiveness

Prevention of reputational damage
Strengthening of the relationship of trust with tax authorities
Public presentation of the “good citizen”
Attractiveness in an increasingly competitive labor market

3. Financial & Policy Benefits

Easier access to crisis-related subsidies or government aid

Your Expert for GRI207

Thomas Bieder

Senior Manager Digital

Dusseldorf, Germany

+4921120050825

Thomas.Bieder@wts.de

ESG Solutions

EU taxonomy

CSRD and ESRS

Country-by-Country Reporting (CbCR)

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Do you have any questions about our services or WTS? Please let us know. Please fill in our short contact form. We will get in touch with you as soon as possible.

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