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Banking 26 Mar 2019

BBVA paid €4.5 billion to cover its own taxes in 2018, a 10 percent year-on-year increase

BBVA Group paid €4.5 billion in worldwide tax on its own business activities in 2018, 10 percent more than in 2017. According to BBVA’s Total Tax Contribution Report, its total contribution (which is the total of the bank's taxes and those made on behalf of third parties) rose to €9.8 billion. Since 2011 BBVA, in accordance with its commitment to transparency with customers, shareholders, employees, and society as a whole, has voluntarily released its tax information.

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With this report, BBVA wishes to simply and transparently communicate information about the tax payments made by the Group for fiscal year 2018. BBVA also wants to communicate the tax control and governance steps it has taken in its steadfast commitment with the BEPS Actions (a joint OECD – B20 project combating base erosion and profit shifting).

In its 2018 report, BBVA underscores its involvement on the technical subcommittee responsible for developing the legislation, UNE 19602, which establishes a standard for tax compliance. Furthermore, the Group points out that its fiscal approach has been recognized, receiving 100 points out of 100, earning the bank a spot on the Dow Jones Sustainability Index.

BBVA’s tax contribution headline figures

BBVA Group's worldwide tax contribution rose to €9.75 billion in 2018: €4.5 billion paid for its own taxes, and €5.3 billion arising from third party tax obligations. 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 pays as a result of its own business activities and those that it pays as an intermediary to the tax authorities in each of the countries where it operates.

Specifically, €2.8 billion of the €4.5 billion that it paid for its own taxes was for worldwide corporate tax, representing 61.15 percent of the total; value-added tax represented 14.15 percent of the total; employee-related contributions stood at 15.84 percent; and the remaining 8.86 percent went to other taxes such as property tax, tax on economic activities, and local taxes.

BBVA's 2018 tax payments broken down by region equate to 27 percent in Spain, 27 percent in South America, 23 percent in Mexico, 16 percent in Turkey, and 5 percent in the United States. The remaining 2 percent corresponds to tax payments in Eurasia. Specifically, last year in Spain BBVA paid €1.3 billion for its own taxes, with an additional €1.37 billion for third party tax obligations, resulting in a total tax contribution of €2.67 billion.

The guiding principles behind BBVA’s fiscal activity

The report points out that “BBVA is committed to providing the best solutions to its customers, profitable and sustained growth for its shareholders, and to collaborating in the progress of the communities where it operates.” This is also the vision that guides BBVA's approach to taxes and is why its policies are aligned with the corporate principles of integrity, prudence, and transparency.

BBVA's fiscal strategy is also aligned with the BEPS Actions and hinges around four essential aspects:

  1. BBVA's tax payments are tied to the actual performance of its economic activity and the generation of value in the jurisdictions where it operates.
  2. The bank has also taken measures to actively adapt tax matters to the new digital environment.
  3. BBVA has established a collaborative relationship with tax agencies based on transparency, mutual trust, good faith, and loyalty.
  4. BBVA promotes clear, responsible, and transparent communication about the nature and extent of its tax affairs.

Furthermore, the Group is resolute in its compulsory commitment to ensure that its different franchises comply with the laws and tax regulations of their respective jurisdictions.