Economic

Economic performance

G4-EC1

Direct economic value generated and distributed

Telia Company provides network access, telecommunications and other services to our customers, we buy equipment to develop our networks and IT systems, and we purchase mobile handsets and other consumer electronics from our suppliers. We pay salaries, dividends and taxes that benefit our employees, local communities and national economies. These actions all generate monetary flows affecting our key stakeholder groups. For more information, see Our Company, section “Created value.”

Tax is an important sustainability issue, with high expectations from stakeholders. Telia Company is a responsible tax payer, paying the amount of taxes legally due in any territory, in accordance with local legislation and international accepted principles. We promote the importance of transparency and fair, ethical tax practices.

The table below lays out corporate income tax payments by country.

Income taxes paid

SEK in millions

2017

2016

2015

Denmark

-2

0

0

Estonia

123

91

Finland

31

0

0

Latvia

30

27

23

Lithuania

28

38

37

Norway

27

12

264

Russia

41

90

82

Sweden

421

1,773

220

Turkey

138

4

438

Other countries

-4

11

68

Total, continuing operations

710

2,078

1,223

Azerbaijan

515

416

410

Georgia

0

-10

0

Kazakhstan

114

268

685

Moldova

Nepal1

453

661

Tajikistan2

25

73

136

Uzbekistan

0

6

Other countries

60

97

45

Total, discontinued operations

714

1,297

1,943

Total

1,424

3,375

3,166

1)Operations in Nepal were divested in 2016

2)Operations in Tajikistan were divested in 2017

In addition to corporate income tax payments, Telia Company generates billions of SEK in other tax payments throughout our footprint. The total tax contribution, including both taxes borne and taxes collected, amounted to SEK 18 billion in 2017. This includes both continued and discontinued operations, the first accounting for 85 percent of the total tax contribution. The chart below show the total tax contribution by tax category.

Total tax contribution

. Corporate income taxes paid, 8%

. Employer taxes paid, 13%

. Other taxes1 paid, 5%

. Net VAT2 paid, 56%

. Employee taxes paid, 18%

1) Other taxes includes e.g. environmental taxes, property taxes and telecommunication taxes. Other taxes paid, or Total tax contribution as such, does not include customs duties and licenses.

2) If a Telia Company entity was in a recovery position regarding VAT, this has reduced the total amount of net VAT paid. The net VAT paid, or the total tax contribution as such, does not capture our irrecoverable VAT.

G4-EC2

Financial implications and other risks and opportunities due to climate change

See our Carbon Disclosure Project Climate Change Response at www.cdp.net.

Indirect economic impacts

G4-EC8

Significant indirect economic impacts

See G4-EC1 and Our Company, section “Value created.”

Omission: we are unable to completely quantify or report on our indirect economic impacts.