Public expectations of corporate tax conduct have moved well beyond “are you compliant?” Stakeholders increasingly want to understand how tax decisions are made, where profits and taxes sit, and what that means for society and future value creation. When organisations can tell a clear “tax story,” it signals governance maturity and strengthens stakeholder trust – while vague or fragmented disclosure leaves room for misinterpretation.
Performance is still uneven across markets. Benchmarking work shows that many large companies remain at relatively low levels of tax transparency, and a significant portion score poorly on the breadth and clarity of disclosures. That gap is now becoming more visible because transparency is being pulled into more reporting systems at once.
Why tax transparency is rising on executive agendas
Tax transparency is being reshaped by three overlapping shifts:
A) Governance expectations are hardening
Boards are increasingly expected to show active oversight of tax strategy, risk appetite, and decision-making – especially in “grey areas” where interpretation, judgment, or uncertainty exists. Tax is moving from a technical topic to a governance topic.
B) Sustainability reporting is expanding, but tax is often missing
Stakeholders are treating tax as part of responsible business conduct and long-term value creation. Yet many sustainability statements still do not treat tax as a material topic. This creates a credibility risk: strong ESG language paired with weak tax evidence can look inconsistent.
C) Public reporting requirements are becoming more data-driven
Country-by-country reporting and minimum-tax related disclosures are pushing companies to build clearer datasets, stronger controls, and more consistent narratives. The compliance burden is rising, but so is the opportunity to build trust through more coherent reporting.
Three gaps that create most “trust risk”
1) The sustainability gap
Even where companies publish broad ESG narratives, tax is frequently absent or treated superficially. Investors and other stakeholders increasingly see tax responsibility and transparency as relevant non-financial signals – especially for governance quality.
What to do: explicitly connect tax to governance and long-term value creation. Don’t let tax sit outside the ESG story.
2) The data gap
Many organisations either do not publish public country-by-country reporting, or publish limited elements. At the same time, requirements are becoming more fragmented across jurisdictions, which raises the risk of inconsistent reporting.
What to do: treat public reporting as a “single source of truth” challenge – consistent definitions, consistent datasets, consistent narrative framing.
3) The credibility gap
Some disclosures provide numbers without explaining the “why.” For example, companies may present tax contribution figures without clarifying the drivers of change year-on-year, or publish effective tax rates without a clean bridge to underlying causes.
What to do: pair disclosure with explanation. Stakeholders rarely react to the number alone; they react to what the number implies.
A better way to approach tax transparency: outcomes, not disclosures
Rather than treating transparency as a checklist, treat it as evidence against four outcomes:
Ethical culture
Show how the organisation deals with uncertainty and sets standards for acceptable tax behavior. This is about tone at the top, escalation paths, and disciplined documentation of judgment calls.
Performance and value creation
Explain how tax supports the business model in a responsible way – how tax decisions align with strategy, operating model, and investment priorities.
Controls and conformance
Make compliance and control maturity visible: how data is governed, how positions are reviewed, and how accountability is defined. This is often what differentiates mature organisations from those relying on manual processes and late-stage reconciliation.
Legitimacy
Provide clear evidence of where value is created and where taxes are paid – backed by consistent data and definitions. This is where “trust” becomes measurable.
What strong tax reporting looks like in 2026
The most credible reporting models usually build in stages:
Foundation: publish the “tax constitution”
- A clear tax strategy linked to business strategy
- Explicit governance and board oversight
- Plain-language articulation of tax risk approach and how disputes are managed
Proof: reconcile narrative to numbers
- A clean explanation of effective tax rate changes and cash tax drivers
- Transparent discussion of timing differences and one-offs
- Clarity on what is audited/assured versus management-prepared
Scale: build a Total Tax Contribution dataset
Many organisations use Total Tax Contribution internally first, even before publishing it. It provides a structured way to show the breadth of taxes borne and collected, and creates a reusable foundation for broader transparency obligations.
Visibility: prepare for fragmented public CbCR regimes
As public reporting regimes diverge across jurisdictions, comparability becomes a risk. Companies will need disciplined definitions and governance so that disclosures remain consistent, accurate, and defensible.
Where AI fits – and where it doesn’t
AI can help accelerate reporting workflows (drafting narrative, reconciling datasets, highlighting anomalies). But it doesn’t replace governance. The trust constraint is still the same: data quality, audit trails, and human accountability.
A practical rule: use automation to reduce manual work, but keep decisions and sign-offs human-led and evidence-backed.
An 8-week sprint to strengthen trust through tax reporting
Weeks 1–2: Establish the trust baseline
- Map current disclosures to the four outcomes (culture, value creation, controls, legitimacy)
- Identify the 5–7 stakeholder questions your reporting can’t answer today
Weeks 3–5: Build the minimum viable dataset and narrative
- Consolidate Total Tax Contribution at group level
- Create standard templates for explaining ETR and cash tax changes, including key drivers and timing differences
Weeks 6–8: Make it board-ready and publication-ready
- Formalize governance and approval routines
- Embed tax transparency into the reporting calendar early to avoid last-minute integration failures
