Telefónica Group Fiscal Strategy

Telefónica’s all-encompassing Fiscal Strategy is a fundamental element that underscores our devotion to ethical commerce, full disclosure, and fostering trust with our stakeholders. This strategy, approved by our Board of Directors, serves as a guiding framework for our tax-related actions and decisions across all jurisdictions where we operate.

The strategy aligns with international guidelines, including those the OECD sets forth, and aims to ensure not only compliance with all tax obligations but also a positive contribution to the economic and social progress of the countries in which we operate. By sharing this document, we aim to underscore the importance we place on fiscal responsibility as an integral part of our corporate governance and our broader commitment to creating long-term value for our shareholders and society at large. Here’s a summary of the most important sections of the document.

The objective of our Fiscal Strategy

The document outlines the objectives of Telefónica Group’s Fiscal Strategy, as well as the guiding principles for tax-related actions. It aligns with the company’s corporate strategy and Responsible Business Principles.

The Fiscal Strategy is applicable to all employees of Telefónica, S.A. and all the companies within its commercial Group, both nationally and internationally.

Tax Policy Guidelines

Telefónica’s Fiscal Strategy outlines comprehensive tax guidelines that are in line with OECD recommendations and the Code of Good Tax Practices. Next, we point out some of the key elements:

• Compliance: Telefónica commits to fulfilling all tax obligations in every country it operates in. This includes the payment of both direct and indirect taxes, and providing accurate and timely information.
• Efficient tax management: The strategy emphasises the use of technology for efficient tax management and control procedures. It aims to ensure the quality and accuracy of data in tax returns and other reports.
• Business-driven tax positions: All tax positions are taken for commercial and business purposes. Aggressive tax planning is avoided, and when multiple tax alternatives exist, the most efficient one is chosen.
• Transparency and documentation: Telefónica will document its tax positions adequately. In cases of uncertain tax positions, it will seek third-party opinions or consult with tax authorities.
• Avoidance of tax havens: The company commits to avoiding the use of artificial structures and tax havens. Any exceptions would require Board approval.
• Tax risk management: Clearly established procedures are in place for identifying, assessing, and managing tax risks. This is approved by the Board of Directors.
• Stakeholder confidence: The tax governance framework aims to build confidence among internal and external stakeholders regarding the identification and management of tax issues.

This comprehensive Fiscal Strategy aims to ensure compliance, efficiency, and transparency in Telefónica’s tax affairs, thereby building stakeholder confidence.

Compliance and supervision of our Fiscal Strategy

The Group’s Tax Department annually reviews the Fiscal Strategy, and the Board of Directors may approve amendments. The Internal Audit Directorate will report annually to the Board of Directors on the degree of compliance with the Fiscal Strategy.

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The Fiscal Strategy will be made available to all Group personnel via Telefónica’s Intranet. It will also be accessible to people outside the organisation through Telefónica’s corporate website.

If you wish to learn more, we invite you to read the complete document at the following link: