There are now numerous initiatives at various national and international levels to promote sustainable growth. When defining its 17 sustainability goals back in 2015, the United Nations recognized that taxes play a central role in this. At European regulatory level, there are currently drafts for the consideration of taxes in achieving sustainable growth. In concrete terms, this means that from January 1, 2021, all companies that apply the GRI framework and have identified tax as a material sustainability issue are obliged to apply the GRI207 standard in their reporting.
Realignment of tax reporting
The changed framework conditions require a perspective realignment of corporate tax reporting. The first step is to create 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 such a way that they meet the requirements of transparency and sustainability. At the same time, processes and measures need to be continuously developed to ensure that tax transparency and sustainability aspects are effectively integrated into the company's operations. A key part of this process is defining how to deal with tax sustainability reporting and identifying opportunities and risks in order to be able to respond proactively to potential challenges.
The integration of these requirements presents the tax function with new challenges and requires a variety of measures. In order to effectively and efficiently implement tax sustainability reporting, a digitalization strategy for the operationalization of data collection and visualization as well as the willingness to make the necessary process adjustments is necessary.
Other recommended frameworks for sustainability reporting in addition to the GRI Standards are the German Sustainability Code, the UN Global Compact and the OECD Guidelines for Multinational Enterprises. The GRI is now an established partner of the EFRAG (European Financial Reporting Advisory Group) and is therefore significantly involved in the development of a core standard for sustainable business reporting at European level. Whether and to what extent the GRI 207 will establish itself 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 in the pipeline that is intended to supplement the environmental taxonomy known to date. The comments on tax planning and transparent tax reporting are interesting. It remains to be seen which measures will be used to implement these criteria in practice in the future.
We support you in fulfilling the following tasks:
Definition and integration of tax sustainability and transparency into the corporate culture and tax strategy
Impact analysis to fulfill the reporting requirements according to the report 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 through the use of various global sustainability rankings to optimize the company's individual ESG or CSR rating
With our support, you can already familiarize yourself with the requirements.
This offers you the following advantages:
GRI 207 readiness as soon as internal stakeholders decide to report according to GRI
Forward-looking proactive management of tax sustainability criteria
Agile response to future binding legal regulations at national or EU level on tax ESG reporting
Contribution to a "lived" tax compliance management system
Avoidance of reputational damage
Strengthening the trustworthy relationship with tax authorities
Public presentation of the good citizen
Attractiveness on the increasingly difficult job market
Easier access to crisis-related subsidies or state aid
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