Tax and Economic Contribution Introduction 2020 Report Our contributions Our business Contributions by country Our beliefs Tax principles UK corporation tax Learn more As a major investor, taxpayer and employer, Vodafone makes significant contributions to the economies of all the countries in which we operate. In 2020, we contributed, directly and indirectly, €12.4billion in cash to governments around the world. 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 2020 report Our report sets out our total contribution to public finances on a cash-paid basis worldwide for the financial year 1 April 2019 to 31 March 2020 and contains new information, including: Our position on the challenges of developing tax regimes for the digital age A review of our alignment with the B Team’s responsible tax principles and the Global Reporting Initiative on tax A comparison of data for the financial year to 31 March 2020 with data for 31 March 2019 An increased focus on the contributions we make in each country, with some content now being published on our website Tax and Economic Contribution Report 2019-20 Previous Tax and Total Contribution Reports (6) In 2020, our contribution to public finances in every country in which we have a legal entity consisted of: Indirect taxes: These are taxes collected by Vodafone on behalf of governments like VAT, employees income taxes and social security, etc. Direct Taxes: These are all type of taxes borne by Vodafone like corporation tax, municipal taxes, stamp duty, employers contribution to social security, etc. Direct non-tax based fees: These are all other form of charges which are collected by government in addition to taxes like telecom license fees, spectrum charges, etc. Our business In 2020, our turnover was €45billion, on which we made a profit before tax of €2.9billion. We have: 415 million mobile customers 25.4 million fixed broadband customers 41.5 million mobile money customers 93,000 employees worldwide €8.9 billion invested 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 and Economic Contribution 2019-20 Swipe across We believe it is possible to achieve a balance between a company’s responsibilities to society and its obligations to shareholders 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 €2.6 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 2020, we paid €2.3 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 2020, we invested more than €8.9 billion in the networks and services relied on by our customers around the world. Vodafone's tax principles and strategy Vodafone operates within a clearly defined governance framework on tax that is designed to provide certainty for all stakeholders with an interest in our tax affairs. Learn more about Vodafone's tax principles and strategy The B Team Responsible Tax Principles Vodafone endorses The B Team Responsible Tax Principles and is committed to reflecting these Principles across our business. Why does Vodafone pay little or no UK corporation tax? Vodafone makes large investments in the UK and in the 2020 financial year spent over €1.2 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. In 2020 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. Learn more about Vodafone and UK corporation tax Learn more Corporate responsibilities and obligations Vodafone, Luxembourg and ‘tax havens’ Multinationals, governments and tax Tax and emerging markets Political engagement and tax policy advocacy Glossary of key terms Types of taxation and contributions Corporate responsibilities and obligations We are committed to acting with integrity, honesty and transparency in the creation and execution of our tax strategy, policies and practices. 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