Tax disclosure requirements: Appeared transparent, little changed

 London_pxhere_ Katarzyna Bilicka, Elisa Casi, Carol Seregni, and Barbara M. B. Stage.
A new study shows that many companies report more on tax, but use generic language and standard phrases that offer little real insight. This is highlighted in research by Katarzyna Bilicka, Elisa Casi, Carol Seregni, and Barbara M. B. Stage. Photo: London (pxhere)
By Sigrid Folkestad

2 June 2025 09:35

Tax disclosure requirements: Appeared transparent, little changed

A new UK regulation was intended to make large companies more transparent about their tax practices. The result? More reporting and polished language, but not more real insight.

A Greenwashing Mandate?

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The study Tax Strategy Disclosure: A Greenwashing Mandate? is authored by Elisa Casi-Eberhard (NHH), Katarzyna Bilicka (Utah State University), Carol Seregni (Wharton Business school), and Barbara Stage (WHU). It is published in the Journal of Accounting Research, which is listed on NHH’s Bonus list, the Financial Times Research Rank List, and holds a 4✱ ranking in the ABS Academic Journal Guide.

Firms used the new disclosure rule to present themselves as responsible taxpayers — but their actual behavior remained unchanged.

`There is a risk of greenwashing, ´ say the researchers behind the new study.

The article is published in the Journal of Accounting Research, a prestigious academic journals in accounting and finance.

`We find that many companies disclose more information about tax but use generic and standardized language that offers little real insight. It looks transparent on the surface, but is difficult to verify, ´ says Elisa Casi, Assistant Professor at the Department of Business and Management Science.

Increased boilerplate in the narrative

The study uses the 2016 UK tax reform as a natural experiment. The law required large firms to publicly disclose their tax strategy.

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Although the volume of tax reporting increased, the researchers found no evidence of meaningful change in companies’ actual tax planning.

What increased was boilerplates — generic, standardized and non-substantive language.

Are qualitative requirements enough?

`This raises questions about how effective qualitative disclosure mandates really are. When the content cannot be verified, there’s a risk that it serves as greenwashing rather than real transparency, ´ Casi says.

Even among companies with the most to lose from reputational damage, the response was the same: more reporting, no behavioral change.

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