GRI 207 Tax
GRI 207 is the global standard for public tax transparency — covering tax strategy, governance, country-by-country reporting, and country-level tax data. Published in 2019, it is the most comprehensive public tax reporting framework available and is increasingly expected by investors and civil society.
GRI 207 is the global standard for public tax transparency — covering tax strategy, governance, country-by-country reporting, and country-level tax data. 207-1 Approach to tax: Tax strategy — the organisation's approach to tax, including attitude to tax planning, relationship with tax authorities, and how tax strategy is linked to business and sustainability strategy.
The four GRI 207 disclosures
207-1 Approach to tax: Tax strategy — the organisation's approach to tax, including attitude to tax planning, relationship with tax authorities, and how tax strategy is linked to business and sustainability strategy.
207-2 Tax governance, control and risk management: Governance body responsible for tax; internal controls; risk management approach; compliance with applicable laws and regulations.
207-3 Stakeholder engagement and management of tax-related concerns: How the organisation engages with stakeholders on tax matters; participation in public policy discussions on tax.
207-4 Country-by-country reporting: For each tax jurisdiction — revenues, profit before tax, income taxes paid (cash basis), income taxes accrued, employees, tangible assets other than cash. This is the public CbCR disclosure.
GRI 207-4 country-by-country reporting in practice
GRI 207-4 requires public disclosure of financial data by tax jurisdiction — effectively the public version of the OECD BEPS Country-by-Country Report (CbCR) that large multinationals already file confidentially with tax authorities.
For each jurisdiction where the organisation operates: revenues from related and third parties separately; profit or loss before income tax; income tax paid on a cash basis; income tax accrued on current year profit; stated capital and accumulated earnings; number of employees; tangible assets.
This data reveals mismatches between where profit is reported and where economic activity occurs — a key indicator of aggressive tax planning. Jurisdictions with high profits but low employees and low taxes attract scrutiny.
Large EU companies are also subject to mandatory public CbCR under the EU Accounting Directive amendment — GRI 207-4 satisfies this requirement.
Tax transparency and ESG ratings
Tax transparency is an increasingly weighted factor in ESG ratings and investor due diligence. PRI (Principles for Responsible Investment) signatories are progressively integrating tax governance into their engagement and voting policies.
ESG rating agencies — MSCI, Sustainalytics, ISS ESG — score tax transparency based on: publication of a public tax strategy; disclosure of effective tax rate vs statutory rate; and country-by-country data availability.
Companies with significant gaps between their headline tax rate and effective tax rate, or with operations in tax havens, face increasing NGO scrutiny. GRI 207-4 disclosure provides the data for this analysis — companies with nothing to hide gain reputational benefit from proactive transparency.
Frequently asked questions
Is GRI 207 mandatory for CSRD reporters?
CSRD does not mandate GRI 207 specifically. However, ESRS G1 (Business Conduct) requires disclosure of significant fines for non-compliance and anti-corruption policies. Tax governance disclosure under GRI 207 complements ESRS G1 and is increasingly expected by investors.
Does GRI 207-4 conflict with tax confidentiality obligations?
GRI 207-4 requires public disclosure of jurisdiction-level financial data — the same data that is privately reported to tax authorities under OECD BEPS CbCR. This data is not itself confidential. Individual tax rulings and advance pricing agreements may be confidential — GRI 207 does not require disclosure of these.
What is the difference between income tax paid and income tax accrued?
Income tax paid (cash basis) is the actual tax payments made during the reporting year — including prior year tax settlements. Income tax accrued is the tax charge on current year profits. The difference reveals timing effects from deferred tax positions and prior year adjustments.