A Tax Transparency Reckoning: Are Corporate Tax Disclosures Entering a New Era?

As outlined in a new Intelligize report, The New Disclosure Challenge: Income Taxes, ASU 2023-09 and Investor Expectations, the Financial Accounting Standards Board’s issuance of ASU 2023-09 is recalibrating how public companies report rate reconciliation and income taxes paid in response to investor scrutiny.

For SEC registrants, the update may signal the end of an era of minimal disclosure. In its place: a heightened expectation that issuers will provide more clarity and consistency. The implications for compliance professionals and legal counsel are substantial, and they’re already taking shape in a shifting landscape.

So, what exactly, does ASU 2023-09 require? The Accounting Standards Update, which “FASB issued in December 2023, requires entities to consistently categorize and provide greater disaggregation of information in the rate reconciliation. They must also further disaggregate income taxes paid.” For more specifics, view the full update.

A Visible Uptick in Disclosure Activity

Our analysis of Form 10-K filings on the Intelligize platform shows a measurable rise in substantive income tax-related risk factor disclosures in the first quarter of 2025 compared with 2024. Topics such as changes in tax law, foreign tax issues, and challenges to tax positions are claiming greater real estate in companies’ filings.

This suggests companies are beginning to internalize a broader shift—recognizing that tax risks, perhaps once buried in boilerplate language, now belong in the foreground. Investors want more information about effective tax rates and where exposure may lie. Registrants are responding in kind.

GRI and the Global Push for Accountability

Regulatory pressure isn’t the only force reshaping this space. More international frameworks are emerging. Chief among them is the Global Reporting Initiative’s (GRI) Tax Standard, which provides a framework for organizations to disclose information about their tax practices publicly. Once the domain of ESG (environmental, social and governance) activists and European multinationals, the GRI’s influence has reached the shores of U.S. markets.

That has become clear in the growing number of shareholder proposals requesting tax transparency reports aligned with the GRI framework. The shareholders of companies such as Amazon, ExxonMobil, and Bristol-Myers Squibb have all fielded such proposals, with mixed outcomes. While some attempts by the companies to exclude proposals have succeeded, the failures of others indicate the Securities and Exchange Commission views some tax disclosure demands as transcending “ordinary business” concerns.

Compliance officers now know shareholders in the U.S. and abroad expect a higher degree of transparency.

Shareholder Proposals as Pressure Valves

The demands of shareholder advocates, who are increasingly focused on how tax strategy intersects with corporate responsibility, are also affecting disclosures. Their proposals are not just about numbers; they’re about values. They’re seeking information about long-term value creation, responsible global citizenship and the integrity of public financial narratives.

In many cases, these proposals echo the spirit of ASU 2023-09. Whether they gain traction during proxy voting or not, they are recalibrating the dialogue around corporate tax behavior as a governance issue.

A Mixed Bag of Registrant Responses

What remains murky for now is how registrants will ultimately characterize the impact of ASU 2023-09. Some, like Jacobs Solutions Inc., have flagged internal control and process changes. Others, such as ZoomInfo and Fresh Del Monte, downplayed the materiality of the impact on financials while acknowledging notable disclosure changes ahead.

This variability could narrow as companies near their first filing deadlines under the new standard. Still, the initial disclosures suggest a wide latitude in how companies are interpreting “material impact,” particularly in the gray zone between compliance costs and disclosure details.

The Bottom Line: Prepare for Deeper Disclosure

FASB’s issuance of ASU 2023-09 is no mere technical update. It signals the Board is emphasizing increased disaggregation, jurisdictional clarity, and increased utility of income tax disclosures for investors to make more informed capital allocation decisions.

The takeaway? Companies should be proactive. Their legal and accounting teams should review tax risk disclosures now, not later. Companies should also re-examine the controls and processes around rate reconciliation and jurisdictional tax payments, given the coming requirements.

From here on out, “just enough” tax disclosure may no longer be enough at all.