Tax

We believe it is important to state clearly and precisely our views on tax in the context of corporate responsibility. We believe our obligation is to pay the amount of tax legally due and to observe all applicable rules and regulations in all of the territories in which we operate. Within this agreed obligation, we have a responsibility to our shareholders to legally minimise and control our tax costs. We accept that some may not share this view and believe that transparency regarding our position on this point is the best policy.

In meeting our legal tax obligations, we must operate within clear, agreed ways of working. This includes:

• operating in a manner that is consistent with appropriate conduct and behaviours
• contributing to shaping the tax environment where we operate
• being transparent and accountable.

Our approach to achieving these objectives is outlined below.

Code of conduct
Vodafone is committed to acting with integrity and transparency in all tax matters. We operate within a clearly defined Group Tax Code of Conduct which sets out the principles, responsibilities, conduct and approach to working relationships of all tax professionals working in (and with) Vodafone. We expect our employees and advisers to behave with integrity and maintain the highest professional and ethical standards in line with our Code of Conduct. Vodafone does not condone tax evasion (using illegal means to reduce taxes payable) in any circumstances.

This expectation is reinforced by our Tax Team Behaviours, against which individual performance is evaluated to ensure accountability.

Contributing to the debate
Vodafone is willing to, and frequently does, contribute to both formal and informal consultations with tax authorities on the introduction and clarification of tax law. We engage in dialogue on current or future tax law by presenting our position to inform the debate.

Our main focus is on direct engagement with tax authorities and lawmakers (see performance 2007/08). We also contribute to the funding of the Oxford University Centre for Business Taxation, based at the Said Business School, which undertakes academic research into the structure of business taxation and its economic impacts.

Accountability and transparent communication
Vodafone has developed and operates within a clear governance framework to ensure accountability in tax matters. This framework is communicated to and understood by all individuals and teams responsible for tax at Vodafone from the Board down. Appropriate controls are in place to ensure compliance.

We aim to provide transparent and accessible communication to enable others to understand our tax strategy and the economic impact of taxation on our business. Vodafone has received several awards for tax reporting (see box). We aim to build open and honest relationships in our day-to-day interaction with tax authorities.

For more information on our recent activities, see tax performance 2007/08.