Tax transparency standards – including GRI207, WEF IBC tax metrics

Last updated: 6/11/2024

In recent years, many tax reporting standards have emerged, primarily created by a range of NGOs. Two of these are starting to have a significant influence:
- GRI207 (Taxation) covers the approach to tax; tax governance, control and risk management; tax stakeholders and country-by-country tax reporting. While on a standalone basis GRI207 is a voluntary standard, it is compulsory for any existing signatories to the wider set of GRI standards for whom tax is a material issue.
- The WEF IBC Core Tax Metric encompasses total tax paid. Expanded Tax Metrics cover additional tax remitted (on behalf of others) and a breakdown of total tax paid and additional tax remitted by country for significant locations.
Other voluntary regimes (such as the Fair Tax Mark in the UK, the global B Team’s “Responsible Tax Principles”) and the recently launched Tax Responsibility and Transparency index (benchmark for business in five key areas of tax conduct) continue to have an impact on the tax transparency disclosures of some groups.
Developments in the EU, such as the public country-by-country reporting (PCBCR), as well as well as the Australian PCBCR bill currently progressing through Parliament, will also drive the broader tax transparency response.
The EU sustainability reporting initiatives, such as the Sustainable Finance Disclosure Regulation (SFDR) and the more recent Corporate Sustainability Reporting Directive (CSRD), while not tax focussed per se, may, in some circumstances, require groups to disclose certain tax information. In October, the European Commission (EC) released a new draft version of the EU PCBCR reporting mechanisms, following a consultation.
UK groups with significant EU presence or operations may be in scope of some or all of the above-mentioned EU reporting initiatives.
A 2024 Deloitte Global Tax Policy Survey revealed that 70% of the respondents expect PCBCR to lead to greater external reporting.
At the same time, there is general recognition of the growing reporting burden on businesses. The EC ran a public consultation on evaluating its Directive on Administrative Cooperation (the DAC), covering DAC1 to DAC6, in line with its promise to declutter reporting requirements in the EU. To follow on this promise, the EC has recently released a draft proposal for the ninth iteration of the Directive on Administrative Cooperation (DAC9), aiming to ease MNEs filing obligations under the EU Pillar Two directive.
Timing: as these are voluntary standards, there is no fixed deadline for adoption, however, groups are increasingly focusing on tax transparency. The EU PCBCR directive applies from the start date of the first financial year beginning on or after 22 June 2024. The Australian PCBCR rules are expected to apply from 1 July 2024. The DAC9 proposal was released on the 28 October 2024. Once adopted by the EU Council, member states would have until 31 December 2025 to implement DAC9.