Fiscal Transparency at Telefónica: commitment and responsibility

Fiscal transparency is a fundamental pillar in Telefónica’s corporate responsibility strategy. The company understands that clear and responsible tax management not only strengthens its reputation, but also contributes significantly to the economic and social development of the communities in which it operates. In this context, Telefónica has published its 2024 Fiscal Transparency Report, reaffirming its commitment to openness and regulatory compliance in tax matters. 

The approach: Fiscal Transparency at Telefónica 

Telefónica’s tax policy is based on its Responsible Business Principles, always acting with integrity, legality and tax transparency. The company adheres to the OECD guidelines for multinational companies, ensuring rigorous compliance with its tax obligations in all the territories where it operates.  

Taxation is understood as a key contribution to economic and social development, in line with the UN Sustainable Development Goals (SDGs). In addition, Telefónica publicly reports its total tax contribution, and does so in accordance with the GRI 207 international standard, which reinforces its commitment to sustainability and transparency. 

Fiscal Governance Structure at Telefónica 

Fiscal governance at Telefónica is designed to ensure effective and transparent tax management. The Board of Directors is the body responsible for determining and approving the Group’s tax policy and strategy, reflecting the importance that the company attaches to this area. The Group’s Tax Department, together with the Regional Divisions, develops and supervises the implementation of the tax strategy, periodically reporting to the Audit and Control Committee on tax policies, associated risks and operations of tax relevance. This structure allows for effective oversight and seamless communication between the various levels of the organization, ensuring regulatory compliance and tax risk mitigation. 

Fiscal Policies and their Implementation

Telefónica’s Fiscal Control Policy, approved by its Board of Directors, establishes the fundamental principles that guide its tax actions. Its objectives include:

• The correct compliance, in a timely manner, of tax obligations. 
• The effectiveness and efficiency of operations from a tax perspective. 
• The taking of positions or the fiscal strategy duly supported and documented. 
• The reliability of tax information. 
• Transparency before third parties, especially before the Tax Administration. 
• Managing tax risks

Impacts, Risks and Opportunities in Tax Matters  

Telefónica’s fiscal management is not without its challenges. The company continuously identifies and evaluates the impacts, risks and opportunities associated with its tax activity. This includes analyzing legislative changes, managing tax disputes, and identifying opportunities to optimize its tax contribution responsibly. This management is articulated through a Risk Management Model based on the COSO (Committee of Sponsoring Organizations of the Treadway Commission) framework, which allows a structured and effective methodology to be applied to anticipate and mitigate possible risks. 

By proactively addressing these aspects, Telefónica seeks to minimize risks and take advantage of opportunities that contribute to its sustainability and that of the communities where it operates. On the other hand, as a result of the entry into force of DAC 6 (Directive on Administrative Cooperation), the Company has developed a procedure to detect and report the mechanisms subject to notification. 

Action Plan and Fiscal Commitments 

Telefónica has outlined an action plan focused on the continuous improvement of its tax policies, the training of its team and the promotion of a culture of integrity. As part of its commitment to tax transparency, it maintains an open dialogue with tax authorities, both nationally and internationally, and has adhered to the Code of Good Tax Practices since 2010. In addition, it actively participates in national and international forums, contributing to legislative initiatives and fostering relationships of trust with key stakeholders, such as NGOs, business associations and public bodies. 

Progress achieved in 2024 

During 2024, Telefónica has made significant progress in its commitment to tax transparency. The company’s total tax contribution amounted to €8,447 million, of which €2,583 million correspond to taxes borne directly and €5,864 million to taxes collected on behalf of tax administrations. These data reflect the positive impact and commitment of the company to the local economies in which it operates. 

For every 100 euros of turnover, we spend 20.4 euros in taxes (6.2 on taxes borne and 14.2 on taxes collected). 

Telefónica’s tax contribution is not limited to Corporate Income Tax, but also covers fees, local taxes, social security payments and taxes collected on behalf of third parties, such as withholdings and indirect taxes. This broad view is reflected in its Country by Country Report, which details its tax presence in each jurisdiction. In 2024, for example, the company contributed €2,808 million in Spain and received the “t for transparent” seal from the Haz Foundation for its high level of fiscal responsibility. 

Telefónica’s commitment to Fiscal Transparency 

The publication of the 2024 Fiscal Transparency Report underlines Telefónica’s firm commitment to ethical, transparent and responsible tax management. Telefónica has been one of the 39 companies that have voluntarily submitted the Transparency Report for the 2023 financial year to the Tax Authorities in Spain.  

The company understands that its tax contribution is essential for the sustainable development of the societies in which it operates and, therefore, continues to strengthen its policies and practices in this area. To learn more about Telefónica’s initiatives and results in terms of tax transparency, we invite you to download the full report available at the following link: