BBVA paid close to €10 billion in taxes in 2017
In 2017, BBVA Group paid €9.9 billion in taxes, a 5 percent year-on-year increase. The amount paid in worldwide taxes for its own business activities was €4.1 billion, 9 percent more than in 2016. For the sixth consecutive year, BBVA has voluntarily disclosed its total tax contribution, consisting of the total of its own taxes and those made on behalf of third parties, thus complying with its corporate principle of transparency and a commitment to social responsibility.
BBVA calculates its total tax contribution for a fiscal year by following PwC's Total Tax Contribution (TTC) model, which totals the different taxes (corporate, VAT, social security contributions) that an organization owes as a result of its own business activities and those paid as an intermediary to tax authorities in each of the countries where it operates.
Each year with its Total Tax Contribution Report, the bank voluntarily itemizes its tax payments for those countries where it has a significant presence. As pointed out by BBVA's Global Head of Tax, José María Vallejo, “Our report on Total Tax Contribution is a good example of how BBVA had the foresight to anticipate initiatives that have now emerged on a local, industry and international level in regard to fiscal transparency. With this report, BBVA Group wants to increase societal awareness of the tax contribution it makes in the countries where it has a presence.”
Of the €9.9 billion (+5 percent from 2016) generated due to BBVA's taxable business activities, €4.1 billion correspond to its own taxes, while €5.8 billion arose from third party tax obligations.
By region, most taxes were paid in South America (€3.1 billion), Spain (€2.7 billion), and Mexico (€2 billion).
With respect to BBVA's own 2017 tax contribution, corporate tax represented the largest portion (55.07 percent), followed by employee-related contributions (17.88 percent), and VAT (16.44 percent). The remainder (10.62 percent) is associated with taxes on economic activities and local taxes, among others.
In 2015, BBVA approved its new fiscal strategy, which reflects its guiding principles related to tax matters and represents an additional step in its policy of transparency and social responsibility. The following points are among those included: to embrace the obligation to pay taxes on amounts generated by the business activity in each country; establish a relationship based on mutual cooperation with the tax authorities; and pro-actively take measures to adapt to a new digital environment for fiscal management.
In 2017 BBVA continued to enhance its model of fiscal governance and control.
Two fundamental aspects are stressed:
- The voluntary production and presentation of the “Annual Report on Fiscal Transparency for Companies affiliated to the Code of Good Tax Practice” to the Spanish tax agency as a sign of BBVA's compliance with the obligations assumed as a result of this affiliation.
- Adherence to the fiscal governance standards recently approved by the UK government and published on the Group's UK website.