Responsible tax landscape

We are pleased to present our new quarterly newsletter, bringing you the most important updates from the responsible tax landscape over the last quarter. We are also excited to present our preliminary report on tax disclosures and application of GRI 207 in Denmark. The full report will be published over the course of Q2 2022.

We hope that this quarterly newsletter will be of value to you. Stay tuned for further updates in our next issue!

The following updates are covered in this first edition:

In this Tax Notes podcast (listen here and find edited transcript here), the new CEO of GRI talks about GRI 207, how the standard came to be, and why he believes companies shouldn’t fear reporting on their tax practices. He also describes what he sees as an evolution for businesses from a shareholder-centric model to a stakeholder-centric model, a view he says is shared by the World Economic Forum and people such as Blackrock CEO Larry Fink. He also delves into why this development calls for sustainability reporting.

He also shares his views on the materiality of tax for sustainability reporting, which is further discussed in the latest GRI Perspective. As Fink sees it, “You can only argue tax is not material if you proceed from the financial materiality principle only and ignore the fact that tax is crucial and therefore material for sustainable development.”

We see various approaches to tax disclosures in Denmark and other Nordic countries, ranging from companies that report their total taxes paid, total tax contributions, to others that report in line with (or inspired by) GRI 207 or the upcoming EU public CbCR directive. Notably, we have seen interesting reports from companies as varied as Coloplast, Ørsted, Mærsk, Pandora, Fortum, Swedbank, SEB, Equinor, and others. As many companies claim to report in accordance with GRI, or to take inspiration from GRI, we have launched, together with KPMG firms in the other Nordic countries, an analysis of tax disclosures across Denmark, Finland, Iceland, Norway, and Sweden.

Back in December 2021, it was reported that two major investors of Amazon had filed a proposal urging Amazon to begin reporting on their tax practices, and specifically on their tax contributions on a country-by-country basis, using the sustainability reporting standard for tax developed by GRI (GRI 207:TAX). The company advising the two shareholders stated that “Investors need greater transparency to evaluate the sustainability of Amazon’s growth. An overreliance on artificial structures to reduce tax obligations in countries around the world creates risks for shareholders and undermines competition for companies to act responsibly.”

The proposal drew support from, among others, the Danish pension fund AkademikerPension (which filed similar proposals in the past two years with five Danish companies), was reported in February that Amazon had barred the proposal from its next AGM. Since then, Amazon has faced renewed calls from twenty-four shareholders who sent a letter to the US SEC (signed by no less than 100 groups, funds, and NGOs) asking for the SEC to intervene and allow a shareholder vote, stating that “Aggressive tax practices can expose a company and its investors to increased scrutiny from tax authorities, adjustment risks, and increase their vulnerability to changes in tax rules.”

In early April, it was then announced that the SEC had decided in favour of the shareholders, meaning that the proposal is scheduled to be voted on at Amazon’s AGM on 25 May. Stay tuned!

Following last year’s call for the establishment of a UN Convention on Tax by the UN High Level Panel on International Financial Accountability, Transparency and Integrity (FACTI), a civil society proposal for a UN Convention on Tax had been put forward by the Global Alliance for Tax Justice (GATJ) and the European Network on Debt and Development (Eurodad). The proposal, which also calls for public country-by-country reporting in line with GRI 207, was strongly welcomed and supported by GRI.

The proposed convention would also serve to:

  • Create an inclusive global tax body
  • Strengthen the fight against illicit financial flows, including tax evasion and avoidance
  • Create global coherence and reduce complexity
  • Replace the transfer pricing system with a system in which MNEs would be taxed on the basis of their global consolidated profits, with taxing rights being allocated between governments based on an agreed formula in a system that is supplemented by a minimum effective corporate tax rate.

While there is some debate on whether the UN is a better forum than the OECD for such debates, this proposal is another indication of what civil society is increasingly expecting with regard to the overall function of taxation and tax reporting by multinationals.

On 24 March 2022, the IFRS Foundation and Global Reporting Initiative (GRI) announced a collaboration agreement under which their respective standard-setting boards (ISSB and GSSB) will seek to coordinate their work programmes and standard-setting activities.

This is a welcome development in what is still a relatively fragmented landscape. With the IFRS’ reporting geared towards investors, and with GRI’s reporting aimed at a wider audience, these two standard setters are complementary. This agreement also solidifies GRI’s position as the go-to sustainability reporting standard on both sides of the Atlantic, as it follows last year’s announcement of cooperation between GRI and the European Financial Reporting Advisory Group (EFRAG), which is responsible for advising the EU Commission and setting ESG standards and mandatory sustainability standards in Europe.

We look forward to reviewing and assessing what comes out of this cooperation agreement, in particular with respect to tax reporting. We believe there are still valuable discussions to be had with respect to “the right place” for tax disclosures to be included and how companies can best report on all their tax contributions with an adequate level of assurance.


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