Alexander Szívós, PhD
Faculty of Law, University of Pécs, Hungary

Sustainability has received more and more attention over the past years and its environmental, social and governance (hereinafter ESG) factors even more so. The theme has long passed the stage of being just about the environment or the climate. The term ESG has a very wide scope. It encompasses an extensive range of considerations, including tax. Major international organizations have recognized the role that taxation could play in achieving the United Nations Sustainable Development Goals. Contributing their fair share to public revenue has become a reputational risk, especially to multinational businesses. Through the lens of ESG factors, aggressive tax optimization and harmful tax strategies are against the sustainable future. In order to give a more realistic view of how the interaction of ESG and taxation can promote economic sustainability, this paper explores the following issues. The fundamentals of ESG in finance underline the emerging role of transparency in taxation by analysing the adopted measures in the reporting frameworks around the globe. The article examines the Balkan region by highlighting and comparing the completed ESG specialised tax measures in Serbia, Croatia and Hungary.

Keywords: sustainability, ESG, taxation, tax compliance, tax evasion.

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