Tax transparency increases but needs more stakeholders involvement in tax topics

• Upward trend since beginning but stagnating scores this year
• Impact of CSRD
• Differences between sectors and countries
• Stakeholder engagement

For the second year in a row, three companies have been selected as joint winners of the Tax Transparency Benchmark. Enel, Repsol and Philips were all awarded with 43 out of 44 points (98%) and were complimented by the jury for their detailed tax reporting, especially regarding the integration of tax within their sustainability strategies and their country-by-country reporting. 

All three winners missed just one point on training and knowledge programs for audit committee or supervisory board members. The jury encourages the winners to not only implement training for tax staff, but also for audit committee and/or supervisory board members, as they have an important oversight function on tax matters. 

Although the results of the Tax Transparency Benchmark 2025 show the general progress that companies have made on tax transparency reporting, this year also records the first decline of companies that publicly disclose a tax strategy. Some companies have withdrawn their public tax strategy and therefore score zero on this indicator, which may be a result of tax not being considered material under the Corporate Sustainability Reporting Directive (CSRD). 

Furthermore, differences between the various countries and sectors in scope remain considerable. Companies in the Netherlands, specifically in the dutch financial and technology sectors, achieve top scores in the benchmark, whereas other countries (Belgium, Sweden) and sectors (pharma) are lagging behind. 

Finally, the benchmark results show that the insights that companies give on stakeholder engagement are stagnating. Only a few companies provide details on how different stakeholders are involved in tax policy and tax transparency, whereas this seems an increasing demand in the market. Actively involving stakeholders at an early stage would be beneficial for companies aiming to meet the escalating expectations regarding tax transparency.

As the regulatory landscape is evolving quickly and stakeholders are still interested in tax transparency, it is crucial to remain abreast of developments in the area in this field. When engaging in tax transparency reporting, the following actions should be considered:

• develop or reassess your tax policy and have it publicly accessible
• illustrate how your company’s tax approach interacts with other business strategies (e.g. sustainability strategy)
• align tax reporting with voluntary tax standards (e.g. GRI 207)
• engage both internal and external stakeholders at an early stage in tax transparency topics
• consider obtaining 'limited assurance' for your tax report
• embrace technology and AI to streamline tax reporting processes

The Tax Transparency Benchmark is an initiative of the Dutch Association of Investors for Sustainable Development (VBDO) that evaluates, in collaboration with PwC, the transparency of tax reporting of (predominantly) listed companies in the Netherlands and the European Union (Belgium, Denmark, Germany, France, Italy, Spain and Sweden). As in 2024, for this year’s edition a total of 116 companies across various sectors (financial, energy, pharmaceutical, technology, and consumer goods) were assessed on six principles of ‘good tax governance’.

Companies can score a total of 44 points within these six principles, in particular for the depth of their tax strategy, the alignment with other (economic/sustainability) strategies, their reporting on tax risks, tax risk management and assurance. This year, additional focus was placed on stakeholder engagement and concrete examples that companies provide in this respect. Ultimately, an independent jury reviews the results and nominates the company that demonstrates the highest level of tax transparency.