Tax transparency and sustainability reporting in 2023

Tax is an inescapable part of our lives, and is fundamentally vital to supporting the delivery of services that enable citizens, economies, and, if we get it right, our planet, to thrive.

At PwC we have been at the forefront of tax transparency developments for many years, from the developments of the Total Tax Contribution framework to the development of the environmental, social and governance (ESG) tax metrics for the International Business Council (IBC) and the World Economic Forum (WEF). We continue this work in our “Tax Transparency and Sustainability Reporting in 2023” study, which we are publishing for the 3rd year in a row and for the first time with an international scope in 2023.

Companies are increasingly willing to report on their tax strategy. Quantitative disclosures - such as a Public country-by-country reporting (CbCR) or a Total Tax Contribution - are expected not only by the pioneers, but in broad application for upcoming reporting periods. 

Taxes are no longer just a financial issue. As the largest source of government revenue, they serve to finance the social community. Therefore, they are an important option for companies to make visible their "fair" contribution to society, public services and infrastructure, economic development and social welfare. 

The landscape of tax reporting has been evolving over many years. Recent developments include the Corporate Sustainability Reporting Directive (CSRD), Public CbCR Directive, Global Reporting Initiative (GRI), Standard & Poor's Global Corporate Sustainability Assessment, the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct and the WEF Metrics. Companies increasingly need to demonstrate how their tax strategy and practices align with their ESG goals and the global agenda for sustainable development. 

These frameworks, as well as country- and industry-specific differences in their application, are highlighted and analysed in the study. The study covers 269 listed companies from Austria, Brazil, Germany, Ireland, Switzerland, Spain, South Africa and the United Kingdom, whose public company reports were used to create a dataset of more than 40,000 individual pieces of data. The study thus represents the most comprehensive overview currently available of international tax transparency and sustainability reporting in 2023.

In the study, we focus on:

• Tax strategy and its links with sustainable development goals
• Tax compliance management systems
• Public CbCR
• Total Tax Contribution (TTC)

We assess the quality and completeness of the reporting against four frameworks:

• The GRI 207: Tax 2019 standard
• The tax section of the S&P Global Corporate Sustainability Assessment (CSA)
• The OECD Guidelines for Multinational Enterprises
• The WEF’s white paper on measuring stakeholder capitalism

We also highlight the regional differences, focal points and trends in tax transparency reporting. 

The study reveals: 

• Significant variation in tax transparency and sustainability reporting by country, industry and framework;
• The GRI 207: Tax 2019 standard and the S&P Global Corporate Sustainability Assessment are the most widely used frameworks; 
• Qualitative reporting on tax strategy and tax compliance management system is more common that quantitative reporting on CbCR and TTC; 
• Tax transparency and sustainability reporting are subject to dynamic and evolving regulatory and voluntary frameworks.