All aboard the tax transparency express
Published date: 06 July 2023
Article by Dave Reubzaet, Director of Global Advisory
The AGM season has seen a flurry of investor-led resolutions calling for multinational companies to disclose public country-by-country reporting (pCbC) on tax in a way that conforms with GRI 207 – the first and only global standard for tax transparency. Recent weeks have seen Amazon, Brookfield Corporation, ConocoPhillips, ExxonMobil and Chevron all face such shareholder motions.
Against this backdrop, GRI’s Dave Reubzaet has written an article for Accounting Today, which makes the case for why companies need to get ahead of incoming policy changes and voluntarily commit to tax transparency now:
Dave explores the significant momentum building around the world towards mandatory tax reporting requirements, including:
- Legislation progressing in Australia that would see the roll-out of pCbC tax rules, based on GRI 207;
- Backing by the EU Competitiveness Council for the introduction of an EU-wide pCbC tax directive to cover all large companies;
- The US Financial Accounting Standards Board advancing a package of tax disclosure rules, including a break-downs at the state and country level;
- France's Forum for Responsible Investing calling for pCbC tax reporting, with GRI 207 as the benchmark.
Dave Reubzaet said:
“Pressure on companies to disclose much and where they pay their taxes isn't going away. And with good reason. Taxes are vital to the smooth running of the global economy, and they underpin the operations of critical infrastructure and services. Taxes are also one of the key ways in which organizations demonstrate how they contribute to the communities where they operate.
The groundswell of policy developments underlines the emerging consensus that tax compliance should no longer be limited to tax evasion but also address tax avoidance. Against this backdrop, a growing number of major companies already disclose their tax practices using GRI 207. Other forward-looking businesses would do well to get on board with tax transparency and commit to public reporting.”
The GRI Tax Standard published in December 2019 and has been in effect for reporting since 2021. It was developed by a multi-stakeholder expert group, which included investors, and encompasses pCbC tax reporting alongside tax strategy, governance and risk management. Freely available for download in nine languages, GRI 207 is already voluntarily used by a growing number of major companies around the world.