Vodafone Group Plc Annual Report 2025 147
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Factors affecting the tax expense in the year The table below explains the differences between the expected tax expense, being the aggregate of the Group’s geographical split of profits multiplied by the relevant local tax rates and the Group’s total tax expense for each year. 2025 2024 2023 €m €m €m Continuing (loss)/profit before tax as shown in the consolidated income statement (1,478) 1,620 13,074 (Loss)/profit at weighted average statutory tax rate (729) 363 2,787 Impairment loss with no tax effect 1 1,361 – 18 Disposal of Group investments 2 146 174 (1,718) Effect of taxation of associates and joint ventures, reported within (loss)/profit before tax 28 23 (125) Deferred tax credit following revaluation of investments in Luxembourg – – (393) Previously unrecognised temporary differences and losses we expect to use in the future 3 – (1,021) (16) Previously recognised temporary differences and losses we no longer expect to use in the future 25 – – Current year temporary differences (including losses) that we currently do not expect to use 33 84 81 Adjustments in respect of prior year tax liabilities (108) 89 (29) Impact of tax credits and irrecoverable taxes 108 147 80 Deferred tax on unremitted earnings 27 1 (6) Effect of current year changes in statutory tax rates on deferred tax balances 4 721 (19) 35 Settlement of the VISPL tax cases 185 – – Financing costs and similar not deductible/(taxable) for tax purposes 137 214 (27) Revaluation of assets for tax purposes in T ü rkiye 5 128 (65) (338) Expenses not deductible for tax purposes 184 60 143 Income tax expense 2,246 50 492 Notes: 1. The Group recorded impairment charges of €4,350 million and €165 million with respect to the Group's investments in Germany a nd Romania respectively, which are permanently non-deductible for tax purposes. 2. The amount for 2025 includes €164 million of tax in relation to the 10.33% disposal of Vantage Towers, offset by a €(109) million credit in relation to the non- taxable disposal of Indus Towers reduced by €56 million non-deductible settlement of MSA obligations that resulted in the release of the secondary pledge. The amount for 2024 includes €110 million of tax relating to income of the continuing Group presented in Discontinued Operations, €37 million in relation t o the disposal of M- Pesa Holding Company Limited and €30 million in relation to the Vantage Towers disposal. The amount for 2023 relates to the disposal of Vantage Towers into a joint venture and the tax-exempt disposals of Vodafone Hungary and Vodafone Gh ana. See note 27 ‘Acquisitions and disposals’. 3. The amount in 2024 includes €1,019 million of additional losses recognised in Luxembourg. 4. The amount for 2025 includes €71 9 million in relation to a 1% corporate income tax rate reduction in Luxembourg. 5. The amounts for 2025, 2024 and 2023 relate to inflation adjustments in Türkiye.
6. Taxation (continued) Deferred tax is calculated at the tax rates that are expected to apply in the periods when the liability is settled or the asset realised, based on tax rates that have been enacted or substantively enacted by the reporting period date. The group does not discount deferred tax balances. Tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they either relate to income taxes levied by the same taxation authority on either the same taxable entity or on different taxable entities which intend to settle the current tax assets and liabilities on a net basis. Tax is charged or credited to the income statement, except when it relates to items charged or credited to other comprehensive income or directly to equity, in which case the tax is recognised in other comprehensive income or in equity. 2025 2024 2023 Income tax expense €m €m €m United Kingdom corporation tax expense: Current year 59 70 4 Adjustments in respect of prior years (8) 1 4 51 71 8 Overseas current tax expense/(credit): Current year 997 670 924 Adjustments in respect of prior years (68) 25 (26) 929 695 898 Total current tax expense 980 766 906 Deferred tax on origination and reversal of temporary differences: United Kingdom deferred tax (91) (36) (71) Overseas deferred tax 1,357 (680) (343) Total deferred tax expense/(credit) 1,266 (716) (414) Total income tax expense 2,246 50 492 Tax charged/(credited) directly to other comprehensive income 2025 2024 2023 €m €m €m Current tax (1) 2 3 Deferred tax 49 (579) 305 Total tax charged/(credited) directly to other comprehensive income 48 (577) 308 Tax charged directly to equity 2025 2024 2023 €m €m €m Current tax 4 – – Deferred tax 3 4 7 Total tax charged directly to equity 7 4 7
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