Tax Sustainability and Transparency - The Role of Tax Disclosures as An Arbitrator for Tax Avoidance

Sustainability has assumed a central role for companies in recent years. The inclusion of sustainability or non-financial reporting (NFR) or, more recently, even integrated reporting (IR) is now a widespread reality. Profit maximisation is no longer perceived as the only contribution expected from the company to increase societal welfare, and stakeholders are currently focused on value creation and sustainable behaviour. This change in paradigm drives companies to act as socially responsible actors, ensuring that their activity has a net positive impact on society.However, if in the past information like environmental protection, social responsibility, human rights, and diversity seems to be already disclosed by companies regularly, the same cannot be said about taxation. This mindset is quickly changing. The pressure of interest group to ensure that companies are paying their fair share and the awareness that regulators and policymakers start to show to the relevance of NFR in the fight against tax avoidance led to a significant increase in voluntary tax CSR disclosures by companies as well as the introduction of mandatory transparency measures (such as the proposal for a public CbC reporting proposed recently by the European Union). The path to the introduction of public NFR tax disclosures seems to be now irreversible. However, several questions are still being posed on the role that CSR and tax transparency may play in taxation and on the effectiveness of such measures in the fight against tax avoidance.Our essay aims to perform a literature review targeted to understand CSR and tax transparency's role in the fight against aggressive tax positions or tax evasion and how effective these practices can actually fulfil this purpose. To do so, we will structure our essay in three chapters; one dedicated to the analysis of the dynamics between tax policy and tax avoidance, the other dedicated to the role that CSR and tax transparency may assume in the fight against tax avoidance, and the last one devoted to the analysis of the path that CSR and tax transparency initiatives are gradually trailing to ascertain its role as a relevant and reliable tool of tax policy in the fight against tax avoidance