As a major investor, taxpayer, employer and purchaser of local goods and services, Vodafone makes significant contributions to the economies of all the countries in which we operate. In 2016-17 we contributed €14.2 billion in cash to governments.

Tax is a vitally important way for governments to raise the revenue needed to help fund reliable public services and civil infrastructure. We recognise and value the benefits for society that arise from fair, effective and predictable tax regimes that are trusted by the public and meet governments’ financing needs. 

As a multinational company, with operations in 26 countries, we adhere to the highest standards of corporate governance in this area, and remain committed to acting with integrity in all matters related to tax. This includes operating under a policy of full transparency with all tax authorities and the payment of all taxes properly due under the law wherever we operate. We also believe that increasing public understanding of, and trust in, the tax system is strongly in the interest of the public and of every business.

 

Our 2016-17 report

In this, our sixth report, we set out our total contribution to public finances on a cash-paid, country-by-country basis. In the 2017 financial year, we contributed more than €14.2 billion in cash to governments in all our countries of operation. We also spent €9.5million on infrastructure and paid €3.7 million to governments in fees and levies, including spectrum rights.

Responding to stakeholder feedback

This year we have:

  • split out the amount of corporate taxes we pay, as a subset of total direct taxes paid, by country
  • shared our views on the challenges for tax authorities in the global digital economy
  • provided more information on our operations in emerging economies

This data supplements our other revenue contributions and is published for every country in which we have a legal entity.

Following the submission of our country by country report to HMRC under the OECD BEPS programme, we are committing to publishing that submission – with supporting explanations – in the next iteration of this report in early 2019.

Key figures for 2016-17

Taxes paid

total contribution, in cash, to governments in our countries of operation

 

Our total contribution to governments of €14.2 billion is made up of:

Financial summary – Vodafone Group Plc

Group revenue

 

Service revenue

 


EBITDA

 


Profit before tax

 


Capital investment

Our business

470 million

Mobile customers
 
470 million

Fixed broadband customers
 
107,000

Employees globally

Vodafone’s contributions, country by country

Clarifying common areas of confusion

We believe it is possible to achieve an effective balance between a company’s responsibilities to society and its obligations to its shareholders. In recent years, however, it has become increasingly difficult to persuade the wider public that many companies can – and do – manage to balance their obligations in this way. 

Five areas that are a common source of confusion are:

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  • ‘Corporation tax’ is not the same as ‘all taxes paid by a company’
  • Most corporate taxes are paid on profits, not on revenues
  • Taxation is local
  • Taxation is not the only route used by governments to raise revenue
  • Governments use tax incentives to stimulate employment and investment

Why does Vodafone pay little or no UK Corporation Tax?

All governments seek to adjust their tax regimes to stimulate investment and encourage job creation, and the UK is no different. The UK Government allows companies to claim various reliefs which have the effect of stimulating investment by businesses.

Vodafone makes huge investments in the UK and spent over €1.4 billion in 2016-17 building and upgrading the networks and services relied on by our customers. Our total contribution to the UK government in 2016-17 was €1 billion.

Vodafone, Luxembourg and ‘tax havens’

Many governments choose to develop tax regimes that offer multinational companies some form of competitive advantage in order to attract inward investment. As a result of the variations between the tax regimes of different countries, some countries have found themselves called ‘tax havens’.

Vodafone has a significant presence in Luxembourg, a country that has been the focus of much scrutiny. Our subsidiaries there are not ‘brass plate’ and play a central role in managing some of the most important aspects of our global operations.