Tax transparency—understanding stakeholder expectations

There is increasing pressure on companies to disclose more meaningful information on tax, most notably in the context of the wider ESG agenda. Within this ever-evolving landscape, we publish the second edition of our Tax Transparency Report.

Stakeholders are demanding a greater level of transparency from companies on their tax affairs because tax is increasingly viewed as a powerful indicator of a company’s societal impact.  Tax has become a key component of the broader environmental, social and governance (ESG) movement and is being factored into stakeholder considerations when assessing the sustainability of a business. Investors, customers and the public want to understand companies’ approach to tax, how tax matters are governed, and how much taxes are paid.

In this year’s tax transparency report, we look at the tax disclosures being made by the companies listed on the main market of the Irish Stock Exchange and compare the year-on-year tax transparency trends. What is clear from this year’s review is that voluntary tax transparency is increasing, particularly in terms of the breadth of information disclosed by the companies already engaged. 

The tax transparency journey

Over the past decade, geopolitical and economic crises have fuelled public interest in companies’ tax affairs, resulting in the gradual introduction of various tax disclosure initiatives. However, recent institutional and regulatory drivers have intensified the pace of change in the tax transparency landscape. The trajectory has continued over the last 12 months and we see no sign of it abating.

The most significant changes for companies emanate from recent EU directives, all of which will need to be considered by Irish companies as they define their tax transparency strategies.

Corporate Sustainability Reporting Directive & EU Taxonomy

The CSRD and the EU Taxonomy are two pillars of EU’s sustainability reporting framework which will require large companies to report certain non-financial information across a range of sustainability topics. 

While tax is not currently one of these topics, it will need to be considered. This is because environmentally sustainable economic activities as defined in the EU Taxonomy must comply with certain minimum safeguards, one of which is tax. The Platform of Sustainable Finance’s final report on the minimum safeguards suggests that a company could be considered non-compliant with the taxonomy if the company: 

  • does not treat tax governance and compliance as important elements of oversight, and there are no adequate tax risk management strategies and processes in place or/an
  • has been finally found violating of tax laws.

Companies will need to implement internal tax governance procedures to ensure compliance with the regulation.

Pillar 2

In December 2022, EU member states reached agreement in principle on Pillar 2, which will come into effect from 1 January 2024. Pillar 2 introduces a global minimum effective tax rate (ETR) via a system where multinational groups with consolidated revenue over €750m are subject to a minimum ETR of 15%. In the context of tax disclosures, companies will face increased scrutiny where the ETR is below 15% in certain jurisdictions.

ESG and tax

The ESG movement is causing  companies to reshape their purpose and operating model. This means finding a balance between financial returns, social interests, the environment and transparency. Tax is integral to the ESG conversation. 

While all stakeholders have a close interest in companies’ tax affairs, it is the demands of investors that are driving change within organisations. Action being taken by investors is having a tangible impact for companies. 

For example, several institutional investors have released codes of conduct that set out what they expect from investee companies regarding tax transparency and their broader tax practices. In the past 12 months alone, several high-profile multinational corporations faced much-publicised shareholder motions urging them to publicly disclose tax data.


Our review

Methodology and scope

In undertaking our tax transparency analysis for this year’s report, we reviewed the tax disclosures of all 21 companies listed on the main market of the Irish Stock Exchange (Euronext Dublin).

Our review was strictly limited to publicly available information regarding financial years ending in 2021, as published at 31 December 2022. To the extent that they were published on their websites, we reviewed companies’ tax strategies, annual reports and ESG or sustainability reports.

While companies can use a variety of publicly available documents to make tax disclosures, our review found that substantial tax disclosures were made in a published tax strategy. Therefore, the findings in this report relate to companies with a published tax strategy.

PwC Ireland's tax transparency framework 

In conducting our review, we used PwC Ireland's tax transparency framework, which leverages our home-grown experience and expertise, as well as that of our extensive PwC global network, on tax disclosures. Our framework, which we developed specifically for the Irish market, includes more than 30 tax transparency indicators, which we believe to be good practice in voluntary tax reporting. Our indicators broadly align to the key tax transparency metrics identified by standard-setting bodies and provide even greater depth analysis. These indicators can be grouped into four categories:


❛❛ In our experience, large companies typically have a tax strategy and a robust tax governance framework. A company may decide not to publish details of its tax strategy or its governance arrangements for many reasons. Therefore, it cannot be assumed that the absence of a published tax strategy, or specific disclosures therein, means that these components aren’t in place. Rather, they are not being made publicly available.❜❜

Aidan Lucey, Tax Transparency Leader

Published tax strategy

This helps stakeholders understand a company's key tax principles and its approach to tax.

Tax governance

This provides an understanding of who has responsibility, oversight and accountability for tax - not only on a day-to-day basis, but where the ultimate responsibility for tax rests.

Tax controls and risk management

This helps stakeolders understand the policies, procedures and controls in place to monitor and mitigate tax risk.

Total tax contribution

This provides stakeholders with an understanding of the total taxes paid by a company, often distinguishing between taxes borne and taxes collected on behalf of the exchequer.

The key actions to take now

Engage the board

Increasing investor pressure on tax means tax transparency is now a board-level issue. It is important to have full engagement between the board, the tax function and those responsible for ESG matters. Tax needs to be fully aligned with your organisation’s broader sustainability strategy.

Prioritise your tax strategy

For those companies not yet making disclosures, the priority should be developing a formal tax strategy. This will be the first document stakeholders look for when assessing the company’s approach to tax and its tax transparency. It can help you control the narrative.

Consider what, and to whom, you are reporting

Tax is a broad subject. Understand the material tax matters your stakeholders want to know about and why. Critically review your current disclosures to see if they align with stakeholders’ expectations. Once you have decided what disclosures to make, then you will need to consider whether the target audience will be able to understand each disclosure. Including additional information to help explain the disclosure and provide additional context may be beneficial.

Establish the optimal reporting framework for the company

There is no optimal level or one-size-fits-all approach to tax transparency. Each company’s perspective differs and will be driven by several factors, including your brand values and stakeholder interests. Decide what reporting framework works best for you.

If the company already uses a reporting framework, such as GRI, for its wider sustainability reporting, ensure that your current tax disclosures align with that framework.

Establish processes and procedures for tax disclosures

Regardless of what disclosures you make, establish formal procedures and governance to ensure that the company can stand over both the qualitative and quantitative disclosures it makes.

We are here to help you

The tax transparency landscape is evolving. Companies need to adapt to keep up with stakeholder expectations on tax disclosures. We can support you in defining your tax transparency strategy and understanding your tax disclosure obligations. We can also provide you with your own transparency assessment, so that you can benchmark how your tax disclosures compare to your peers. Contact us today.


[1] Who were listed on Euronext Dublin in 2021 and remain listed as at 31 January 2023.
[2]  Since the publication of our first report, three companies have delisted from Euronext Dublin including two companies with a published tax strategy. For comparative purposes, these companies have been removed from our statistics.

Contact us

Aidan Lucey

Partner, PwC Ireland (Republic of)

Laura Harney

Director, PwC Ireland (Republic of)

Opeyemi Osunsan

Manager, PwC Ireland (Republic of)

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