The GRI Tax Standard has been launched. It is the first global standard for comprehensive tax disclosure at the country-by-country level. It supports public reporting of a company’s business activities and payments within tax jurisdictions, as well as their approach to tax strategy and governance.
The Tax Standard has been developed in response to concerns over the impact tax avoidance has on the ability of governments to fund services and support sustainable development - and to give clarity on how much companies contribute to the tax income of the countries where they operate.
As the latest addition to the GRI Standards - a global sustainability reporting framework - it is now freely available to organisations around the world.
According to the United Nations, taxes play a vital role in achieving the sustainable development goals. They are a key mechanism by which organisations contribute to the economies of the countries in which they operate.
GRI’s new reporting standard on tax enables organisations to better understand and communicate information about their tax practices publicly. The Standard was developed by a multi-stakeholder technical committee under the oversight of the Global Sustainability Standards Board (GSSB) with input from over 250 stakeholders from multiple constituencies.
The features of the standard include:
- Enables organisations to report on tax practices as part of their sustainability reporting.
- Includes disclosures on tax strategy, governance and risk management that meets different stakeholder expectations of reporting.
- Introduces public country-by-country reporting of business activities, revenues, profit and tax.
- Promotes disclosure of the reasons for difference between corporate income tax accrued and the tax due if the statutory tax rate is applied to profit/ loss before tax.
“Payment of taxes is a major way for companies to support the communities where they operate," said Tim Mohin, GRI chief executive. "Yet too many businesses are unwilling to disclose how much, and where, they pay taxes. GRI’s Tax Standard challenges this status quo by outlining clear best practice for disclosure."
Fiona Reynolds is CEO of PRI (Principles for Responsible Investment), the global investor network of over 2,600 signatories who collectively manage in excess of US$89 trillion. She said:
“Tax avoidance is a leading driver of inequality and as such a responsible approach to tax by business is essential. The PRI has been leading efforts to drive more meaningful corporate disclosure. GRI’s new Tax Standard marks an evolution in tax transparency and provides a much-needed and ambitious framework for corporate tax reporting.”
“GRI’s new tax disclosure standard is a vital contribution to address stakeholders’ demand for corporate tax transparency," commented Olivier Boutellis-Taft, chief executive of Accountancy Europe. "Accountancy Europe stands for transparency and trust: we therefore commend GRI for pioneering reporting in this sensitive area with great balance and for providing a global, meaningful and practical format for companies that choose to explain how they handle their tax affairs.”
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