Sustainability is changing tax rules for businesses

Sustainability is becoming an important part of business tax planning. Companies in Europe now face new tax rules linked to the environment, social issues and company management.

The EU Green Deal is bringing new challenges for businesses. Companies may need to prepare for taxes linked to carbon and plastic use.

New reporting rules

The Carbon Border Adjustment Mechanism (CBAM) has required companies to report some carbon data since October 2023. These rules are part of efforts to reduce carbon emissions.

Tax reporting is also becoming part of sustainability reports. The GRI 207 standard asks some companies to share information about their tax policies and payments.

The EU also plans public country by country tax reporting for large companies. This could make tax information more open to the public.

Supply chains may change

Sustainability plans can also affect company supply chains. Changes may impact transfer prices, customs and other taxes.

Companies must understand these changes to follow tax rules in different countries.

Remote work brings new tax issues

Flexible work is another area linked to sustainability. Working from different countries can affect payroll taxes, social security, work permits and company tax rules.

Remote work can also reduce travel. This may help lower the environmental impact of daily trips.

Sustainability is now connected to many parts of business. Companies need to look at tax rules as they plan for environmental, social and business changes.