We recognise and value the benefits for society that arise from fair, effective and predictable tax regimes. We are committed to acting with integrity, honesty and transparency in all matters related to tax and ensure we adhere to the highest standards of corporate governance.
Our 2018 report
Our report sets out our total contribution to public finances on a cash-paid basis worldwide for the financial year 1 April 2017 to 31 March 2018 and contains new information, including:
our position on the challenges of the global digital economy for tax purposes;
our OECD base erosion and profit shifting Country by Country Report; and
our position on the amount of corporate taxes we pay, split out as a subset of the total direct taxes we pay, by country.
In 2018, our contribution to public finances in every country in which we have a legal entity consisted of:
Our business
In 2018, our turnover was €46.6 billion, on which we made a profit before tax of €3.9 billion. We have:
536 million mobile customers
35 million mobile money customers
20 million fixed broadband customers
104,000 employees worldwide
invested €9.2 billion in our network and services
Vodafone’s contributions, by country
We are a multinational company with operations in 25 countries, and Vodafone Business entities or other activities in 38 more.
Tax systems are complex and confusing and can lead to an erosion of public trust. We believe that increasing transparency and improving the understanding of tax systems is vital to help address this issue.
We produce this report in order to explain what taxes and other fees we pay in each country; the principles by which we operate; our views on various matters of significance to the payment of taxes by corporations.
This includes clarifying areas that are often a source of public confusion including:
Corporation tax is only one aspect of taxes paid by a company
We pay more than 85 different corporate taxes a year; corporation tax is just one of them.
Most corporate taxes are paid on profits not revenue
This helps to avoid disproportionate tax demands when profits are low, which can severely damage businesses.
Taxation is local
Taxes generally fall where profits are generated and are determined by the local laws in place in that location. Last year, globally, we paid a total of €3.1 billion in direct taxes.
Taxation is just one way that governments raise revenue from businesses
Taxation is not the only route used by governments to raise revenue from businesses; licensing agreements, production-sharing agreements and spectrum fees and auction proceeds are just some of the other mechanisms used. In 2018, we paid €2.4 billion of non-tax-based fees to governments.
Tax incentives can be used to stimulate employment and investment
These incentives are not loopholes but part of government strategies to stimulate and attract inward investment. In 2018, we invested more than €9.2 billion in the networks and services relied on by our customers around the world.
Vodafone makes large investments in the UK and in the 2018 financial year spent over €1.3 billion building and upgrading the networks and services relied on by millions of people.
Since 2000, Vodafone has paid the UK government more than €10 billion for our 3G and 4G radio spectrum licences, resulting in more than €500 million a year in interest payments to UK banks. Our total contribution to the UK government was €1.1 billion. The UK government allows companies to claim tax (and other) reliefs on capital investments they make in the UK, in order to stimulate investment, encourage skills creation and bring greater employment opportunities to millions of people.
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, including our centralised procurement, financing and roaming activities.
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’.
We provide a list of all legal entities we own and operate in each country and in none of these do we enter into the kind of artificial arrangements that are of concern to the European Commission and many others.
