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Fiscal transparency

The current economic environment has put the tax contribution of large multinationals at the centre of the debate (fair share). At Telefónica, the value of our tax contribution is a priority and a matter of prestige. The total tax contribution rose to 12,057 million euros.

Transparency above all. With this aim, we have developed Business Principles for tax compliance, based on which we commit to acting with honesty and respect for the law in the management of fiscal affairs.

Furthermore, in 2010 the Board of Directors approved our adherence to the Code of Good Tax Practices developed by the Large Businesses Forum along with the Spanish Tax Authority, in order to avoid the use of opaque structures for fiscal purposes.

Therefore, we do not use corporate structures to conceal or reduce the transparency of our activities from tax authorities or any other interested party. Nor are we present in any of the jurisdictions included in the list of tax havens legally established by Spain according to the 1st additional provision of Law 36/2006 on Measures for the Prevention of Fiscal Fraud in the wording updated by the Final Provision 2 of Law 26/2014 of 27 November.

Taxes in 2014

In 2014, our total tax contribution has risen to 12,057 million euros. Brazil and Spain were the jurisdictions that contributed most to tax payments. This shows that for every 100 euros of our turnover, 23.9 euros were allocated to the payment of taxes, of which 7.1 euros were taxes incurred and 16.9 euros were taxes levied.

Based on the methodology of the distributed value produced by the CTT of PwC, for every 100 euros of value distributed by Telefónica in the 2014 fiscal year, 50 euros were allocated to tax payments. According to the CTT methodology by PwC, a company's distributed value is the sum of the following elements: shareholder value (eg. dividends, reserves, etc.), wages and salaries (net of taxes collected from employees), net interest and taxes (incurred and levied).

Contribution to society

(1). Taxes incurred: taxes paid by Telefónica to administrations of the different states in which it operates and that cause the Company to assume an effective cost.
(2). Taxes levied: taxes managed by Telefónica that have been entered on behalf of other contributors as a result of the economic activity of the Company; that is, tax revenues obtained due to the economic value generated by this economic activity.

Breakdown of Telefónica's global tax contribution​

In thousands of euros

Country​

Taxes incurred (1)

Taxes levied​ (2)

Total contribution (3)

Brazil 1,087,052 3,922,561 5,009,613
Spain 944,386 2,129,657 3,074,043
Argentina 383,429 593,779 977,208
Germany 172,131 505,419 677,550
Peru 292,773 294,968 587,741
United Kingdom 82,107 424,839 506,946
Colombia 167,771 178,792 346,563
Central America 185,302 122,519 307,821
Chile 55,040 165,121 220,161
Mexico 28,094 101,292 129,386
Ecuador 65,455 15,823 81,278
Ireland 29,218 16,707 45,925
Uruguay 23,537 16,311 39,848
Czech Republic 1,502 1,035 2,537
Other 36,913 13,780 50,724
TOTAL 3,554,710 8,502,603 12,057,344

(1). Taxes incurred: taxes paid by Telefónica to administrations of the different states in which it operates and that cause the Company to assume an effective cost.
(2). Taxes levied: taxes managed by Telefónica that have been entered on behalf of other contributors as a result of the economic activity of the Company; that is, tax revenues obtained due to the economic value generated by this economic activity.
(3). Total contribution: the total contribution measures the total impact represented by the payment of taxes to the different administrations in a direct or indirect manner as a result of the Company's economic activity.