Accounting
Tax reporting transparency reaches a tipping point
Transparency is a critical component of sustainability that is foundational across the environmental, social and governance pillars: transparency in the supply chain, transparency in employee management and transparency in business decision-making.
To achieve sustainable business models and greater long-term value creation, transparency with stakeholders is fundamental. Tax is one of the items that businesses need to consider within this broader transparency trend.
We have reached a tipping point in global corporate tax reporting and disclosure. Regulators, investors and the public are demanding ever greater tax transparency, and companies must navigate evolving, complex reporting requirements around the globe. From expanded Financial Accounting Standards Board disclosures in the U.S. to public Country-by-Country Reporting legislation in the EU and reporting requirements under countries’ new Base Erosion and Profit Shifting 2.0 Pillar Two global minimum tax rules, companies face an array of new tax information responsibilities.
Many of these tax reporting and disclosure regimes are coming online imminently. By proactively assessing these changes, highlighting the global tax footprint and managing the level of tax transparency in ESG agendas, companies can position themselves to tell their own story. Those that proactively adapt to this rapidly changing tax reporting and disclosure landscape will be better equipped to address risks, embrace opportunities and effectively communicate their tax narrative to the wide range of different stakeholders.
Tax reporting here, there and everywhere
In the United States, in the EU and around the world, tax transparency is becoming commonplace, as governments and regulatory bodies seek additional visibility into corporate tax profiles. In a recent move that reflects the new corporate tax reporting environment, FASB late last year approved expanded income tax disclosures for U.S. companies that file under U.S. GAAP.
At the same time, more widespread public CbCR disclosure obligations are being enacted around the globe. Within the EU, 21 member states currently have either proposed or enacted public CbCR legislation following the approval of an EU CbCR directive in December 2021. Differences in local rules, reporting requirements and timing can present challenges to multinational entities headquartered outside the EU and operating in multiple EU jurisdictions.
Additionally, the BEPS 2.0 Pillar Two initiative of the Organization for Economic Cooperation and Development is creating new, complex tax reporting requirements for MNEs. Many countries are beginning to implement Pillar Two legislation, but the specifics and timing differ from country to country. Pillar Two calls for a global minimum tax of 15% for multinational corporations with group revenue of more than €750 million, and the necessary calculations require a substantial volume of data, some of which has not been maintained by tax departments for other purposes.
The details of these various initiatives differ, but taken together, they share common themes and signal a broad shift in expectations about tax disclosures and reporting. In order for companies to keep up, they must transform their systems, processes and overall frameworks for tax reporting.
Opportunities and risk in a more transparent world
Greater tax transparency is quickly becoming the norm, and tax authorities around the globe are increasing their reporting requirements. Understanding the gaps and overlaps between the various tax reporting and disclosure regimes presents an opportunity to re-examine and leverage existing data and systems. Doing so can reveal ways to streamline cross-functional processes and can provide stakeholders with a more complete view of the financial impact on communities and society.
While regulators around the globe are heavily focused on income tax disclosures, those represent only one element of companies’ total tax contributions. Income taxes are significant, but the amount of non-income taxes companies pay similarly is often very significant. Companies also play a role in tax collection when they collect value-added taxes, sales and use taxes and payroll taxes, potentially alleviating some of the burden of governmental entities.
Adapting to this world will require addressing new data and technology needs associated with addressing the above-mentioned tax disclosure and reporting requirements (e.g., FASB, public CbCR and Pillar Two reporting requirements). Collecting and analyzing the necessary data for reporting will require an in-depth process review and level of granularity not previously required. By proactively addressing these potential barriers and investing in suitable technology tools, companies can help facilitate more accurate, efficient, consistent and timely reporting and disclosures.
While this may entail new costs, being able to collate data globally for all tax types allows for enhanced analytic capabilities and enables companies to make their societal contributions clearer, a key element of the ESG agenda. Companies will be better able to explain their tax situations to interested parties and demonstrate how their tax contributions support their communities.
In this way, companies can take ownership of their tax narrative, which enhances trust with investors, customers and the public. This, in turn, can create a competitive advantage. Those that fall behind in responding to global trends calling for a more complete view of companies’ corporate tax profiles risk forfeiting control of their tax narrative and, in the process, losing stakeholder and public trust.
Making transparency work — meeting the challenge
Many companies have already started the tax transparency journey as part of their ESG agenda and are highlighting how tax obligations reflect societal commitments. One potential method is global tax footprint reporting, which can bridge the transparency gap and provide a more complete and holistic view of a company’s tax contributions.
Reassessing data and technology needs and reporting practices in light of increasing transparency trends and reporting requirements allows companies to connect the tax function in a more meaningful way to ESG practices. By promoting a greater understanding of the complete tax picture, the tax function can add clear value to the ESG agenda.
Proactively addressing transparency and reporting requirements can help companies establish themselves as forward-looking, engaged contributors to communities and society, able to balance business and strategic objectives with obligations to tax authorities, regulatory bodies, investors and the broader public. Below are some questions that can help start the process.
Questions to consider
- How does tax currently fit into the company’s ESG reporting framework, and how might this plan need to change given expanding reporting obligations to tax authorities and public expectations for transparency?
- What is the company’s approach to showcase its global tax footprint and access the data and technology platforms needed across various tax jurisdictions to comply with new tax reporting requirements?
- What is the communication strategy for helping internal and external stakeholders understand the nuances of the tax data disclosed to the public?
Tax transparency is here to stay, and companies need to develop action plans to respond.
Kevin Dehner is EY Americas sustainability tax deputy leader. Other contributors to this article include Kristen Gray, EY Americas sustainability tax leader; David Campbell, EY Americas tax technology and transformation senior manager; and Colleen Sebra, EY Americas tax technology and transformation partner.
Jody Padar, an author and speaker known as “The Radical CPA,” and Katie Tolin, a growth strategist for CPAs, together launched a training and technology platform called XcelLabs.
XcelLabs provides solutions to help accountants use artificial technology fluently and strategically. The Pennsylvania Institute of CPAs and CPA Crossings joined with Padar and Tolin as strategic partners and investors.
“To reinvent the profession, we must start by training the professional who can then transform their firms,” Padar said in a statement. “By equipping people with data and insights that help them see things differently, they can provide better advice to their clients and firm.”
The platform includes XcelLabs Academy, a series of educational online courses on the basics of AI, being a better advisor, leadership and practice management; Navi, a proprietary tool that uses AI to help accountants turn unstructured data like emails, phone calls and meetings into insights; and training and consulting services. These offerings are currently in beta testing.
“Accountants know they need to be more advisory, but not everyone can figure out how to do it,” Tolin said in a statement. “Couple that with the fact that AI will be doing a lot of the lower-level work accountants do today, and we need to create that next level advisor now. By showing accountants how to unlock patterns in their actions and turn client conversations into emotionally intelligent advice, we can create the accounting professional of the future.”
“AI is transforming how CPAs work, and XcelLabs is focused on helping the profession evolve with it,” PICPA CEO Jennifer Cryder said in a statement. “At PICPA, we’re proud to support a mission that aligns so closely with ours: empowering firms to use AI not just for efficiency, but to drive growth, value and long-term relevance.”
The accountant the world urgently needs has evolved far beyond the traditional role we recognized just a few years ago.
The transformation of the accounting profession is not merely an anticipated change; it is a pressing reality that is currently shaping business decisions, academic programs and the expected contributions of professionals. Yet, in many areas, accounting education stubbornly clings to outdated, overly technical models that fail to connect with the actual demands of the market. We must confront a critical question: If we continue to train accountants solely to file tax reports, are we truly equipping them for the challenges of today’s world?
This shift in mindset extends beyond individual countries or educational systems; it is a global movement. The recent announcement of the
The CIMA/CGMA proposal for 2026 is not just a curriculum update; it is a powerful manifesto. This new program positions analytical thinking, strategic business partnering and technology application at the core of accounting education. It unequivocally highlights sustainability, aligning with IFRS S1 and S2, and expands the accountant’s responsibilities beyond mere numbers to encompass conscious leadership, environmental impact and corporate governance.
The current changes in the accounting profession underscore an urgent shift in expectations from both educators and employers. Today, companies of all sizes and industries demand accountants who can do far more than interpret balance sheets. They expect professionals who grasp the deeper context behind the numbers, identify inconsistencies, anticipate potential issues before they escalate into losses, and act decisively as a bridge between data and decision making.
To meet these expectations, a radical mindset shift is essential. There are firms still operating on autopilot, mindlessly repeating tasks with minimal critical analysis. Likewise, many academic programs continue to treat accounting as purely a technical discipline, disregarding the vital elements of reflection, strategy and behavioral insight. This outdated approach creates a significant mismatch. While the world forges ahead, parts of the accounting profession remain stuck in the past.
The consequences of this shift are already becoming evident. The demand for compliance, transparency and sustainability now applies not only to large corporations but also to small and mid-sized businesses. Many of these organizations rely on professionals ill-equipped to drive the necessary changes, putting both business performance and the reputation of the profession at risk.
The positive news is that accountants who are ready to thrive in this new era do not necessarily need additional degrees. What they truly need is a commitment to awareness, a dedication to continuous learning, and the courage to step beyond their comfort zones. The future of accounting is here, and it is firmly rooted in analytical, strategic and human-oriented perspectives. The 2026 curriculum is a clear indication of the changes underway. Those who fail to think critically and holistically will be left behind.
In contrast, accountants who see the big picture, understand the ripple effects of their decisions, and actively contribute to the financial and ethical health of organizations will undeniably remain indispensable, anywhere in the world.
Congressional Republicans are siding with Donald Trump in the messy divorce between the president and Elon Musk, an optimistic sign for eventual passage of a tax cut bill at the root of the two billionaires’ public feud.
Lawmakers are largely taking their cues from Trump and sticking by the $3 trillion bill at the center of the White House’s economic agenda. Musk, the biggest political donor of the 2024 cycle, has threatened to help primary anyone who votes for the legislation, but lawmakers are betting that staying in the president’s good graces is the safer path to political survival.
“The tax bill is not in jeopardy. We are going to deliver on that,” House Speaker Mike Johnson told reporters on Friday.
“I’ll tell you what — do not doubt, don’t second guess and do not challenge the President of the United States Donald Trump,” he added. “He is the leader of the party. He’s the most consequential political figure of our time.”
A fight between Trump and Musk exploded into public view this week. The sparring started with the tech titan calling the president’s tax bill a “disgusting abomination,” but quickly escalated to more personal attacks and Trump threatening to cancel all federal contracts and subsidies to Musk’s companies, such as Tesla Inc. and SpaceX which have benefitted from government ties.
Republicans on Capitol Hill, who had — until recently — publicly embraced Musk, said they weren’t swayed by the billionaire’s criticism that the bill cost too much. Lawmakers have refuted official estimates of the package, saying that the tax cuts for households, small businesses and politically important groups — including hospitality and hourly workers — will generate enough economic growth to offset the price tag.
“I don’t tell my friend Elon, I don’t argue with him about how to build rockets, and I wish he wouldn’t argue with me about how to craft legislation and pass it,” Johnson told CNBC earlier Friday.
House Budget Committee Chair Jodey Arrington told reporters that House lawmakers are focused on working with the Senate as it revises the bill to make sure the legislation has the political support in both chambers to make it to Trump’s desk for his signature.
“We move past the drama and we get the substance of what is needed to make the modest improvements that can be made,” he said.
House fiscal hawks said that they hadn’t changed their prior positions on the legislation based on Musk’s statements. They also said they agree with GOP leaders that there will be other chances to make further spending cuts outside the tax bill.
Representative Tom McClintock, a fiscal conservative, said “the bill will pass because it has to pass,” adding that both Musk and Trump needed to calm down. “They both need to take a nap,” he said.
Even some of the House bill’s most vociferous critics appeared resigned to its passage. Kentucky Representative Thomas Massie, who voted against the House version, predicted that despite Musk’s objections, the Senate will make only small changes.
“The speaker is right about one thing. This barely passed the House. If they muck with it too much in the Senate, it may not pass the House again,” he said.
Trump is pressuring lawmakers to move at breakneck speed to pass the tax-cut bill, demanding they vote on the bill before the July 4 holiday. The president has been quick to blast critics of the bill — including calling Senator Rand Paul
As the legislation worked its way through the House last month, Trump took to social media to criticize holdouts and invited undecided members to the White House to compel them to support the package. It passed by one vote.
Senate Majority Leader John Thune — who is planning to unveil his chamber’s version of the bill as soon as next week — said his timeline is unmoved by Musk.
“We are already pretty far down the trail,” he said.
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