Swiss Retail in the Age of Disruption – Total Retail Switzerland 2015

_MG_0210Digital disruption has taken hold of the retail sector. In light of this, for the third consecutive year PwC has asked Swiss consumers about their shopping preferences. Our discoveries are noteworthy.

  • The Swiss are ordering online less frequently. Consumers say they making fewer purchases online than in previous years. For specific product categories such as groceries, they even seem to be returning to brick and mortar retail.
  • New segments are embracing digital. Silver surfers are growing increasingly interested in e-commerce and online social activity. And unlike Digital Natives, this demographic has the purchasing power to make a large impact on Swiss e-commerce.
  • Swiss brands are failing to embrace consumer engagement. Though many retailers maintain brand pages on social media, two-way interaction between customers and retailers in Switzerland has not taken off. Shoppers do not believe that their voices are being heard – and because of this, social media is not yet a major part of the Swiss customer experience.
  • Mobile commerce is yet to gain popularity. Though mobile use is booming, market players have been slow to reap the benefits of this development. Consumer interest in mobile commerce is low. This is largely due to meagre service offerings, which fail to convince consumers who are wary of privacy concerns.

These are some of the key findings of PwC Switzerland’s third annual Total Retail Report. This year’s publication is digital and allows you to export and play around with PwC data on consumer preferences. Visit our website to find out more. You’re in for a fascinating and stimulating experience!

If you have any questions, I’m happy to hear from you.

Agreement between Switzerland and EU for automatic exchange of information in tax matters: signing and consultation

The agreement between Switzerland and the EU for Automatic Exchange of Information (AEOI) in tax matters was signed on 27 May 2015 in Brussels. Switzerland and the 28 EU member states intend to collect account data starting in 2017 and exchange it from 2018 once the necessary legal basis has been created. The agreement was signed by Swiss State Secretary Jacques de Watteville, Finance Minister Jānis Reirs from Latvia, representing the EU Presidency, and EU Commissioner Pierre Moscovici. The agreement on the AEOI in tax matters will apply for all 28 EU member states. The OECD’s global AEOI standard has been included in full in the new agreement.

The agreement signed is a protocol of amendment to replace the taxation of savings agreement between Switzerland and the EU that has been in force since 2005, but it includes the existing withholding tax exemption for cross-border payments of dividends, interest and royalties between related entities. Interestingly, the Federal Council’s press release states that given that various EU member states have launched or enhanced tax regularisation programmes recently, “he regularisation of the past with neighbouring countries and the main EU member states can be considered settled to a large extent”.

In addition, the Federal Council has also started the consultation period regarding the EU AEOI agreement. Interested parties and the cantons have until 17 September 2015 to comment on the AEOI agreement with the EU. Thereafter, the Federal Council will submit the agreement to parliament for approval.

Parallel to this, work is continuing on the legal basis for the automatic exchange of information with foreign countries. The Federal Council will adopt the dispatches on the AEOI Act, the Multilateral Competent Authority Agreement and the OECD/Council of Europe administrative assistance convention for the attention of parliament in the weeks ahead.

Finally, the European Commission is currently concluding negotiations for similar agreements with Andorra, Liechtenstein, Monaco and San Marino, which are expected to be signed before the end of 2015.

We will continue to keep you updated on AEOI events as they occur. If you have any questions in the meantime, please feel free to contact me.

Press release Switzerland

Press release EU

Finally, click here to PwC recent Common Reporting Standard Webcast which you can still view online.

Hunting the network snark

Using entropy to help in hunting anomalies on a network is an approach that has been around for at least the last ten years or so. The trouble is that, by itself, knowing that a certain network flow has an entropy of 7.5 doesn’t help you. It could be a perfectly legitimate SSL session, or possibly a compressed HTTP pipeline of legitimate content.

Wouldn’t it be handy to have some automated process for helping narrow down which flows were suspicious? Well, if you’ve followed my previous articles on instrumenting your network, we can start to do just that.

Recipe for Success?

Start with a bowl containing your raw IPFIX (with AppFlow) data and your full packet capture. Add a dash of logs – DHCP, DNS and network authentication – then blend in some packet entropy with open source data.

Read more here.

If you have any further questions, please contact us.

Greek Draft Bill on Voluntary Disclosure of Undeclared Taxable Income

The Greek Ministry of Finance published a draft bill on the Voluntary Disclosure of undeclared taxable income for public consultation. The key points for Greek tax residents with undeclared funds abroad is that they may legalise these funds by submitting a special tax return and paying a tax of 15% on these funds without any additional taxes or penalties.The final text of the bill is still outstanding and many details and procedural matters still need to be clarified via Ministerial Decision. Click here to read the relevant tax newsletter from PwC Athens.

With respect to deposits in Switzerland, a special procedure is anticipated to be followed involving also the Swiss banks, assuming that a specific agreement between Greece and Switzerland can be signed after the voting of the above mentioned (and currently still in draft) bill.

Recent IRS comments on FATCA, QI and 871(m) and other FATCA developments

Recent Comments from the IRS on FATCA, QI and 871(m)

The IRS has made several interesting comments while speaking at conferences over the last couple of weeks.

  • FATCA – according to the IRS, we can expect a revised version of the form W-8BEN-E sometime late this year or early next year.
  • FATCA – according to the IRS, the process for registering sponsored entities will kick off late this summer and will include options for adding sponsored entities either individually or via a bulk upload.
  • FATCA – according to the IRS, when a client provides a reasonable explanation for his/her loss of citizenship (given in lieu of a Certificate of Loss of Nationality), such a reasonable explanation should be fact based.
  • Qualified Intermediary (QI) – according to the IRS, there are currently no plans to issue a revised version of the current QI agreement.  Instead, the IRS will begin working on the 2017 version of the agreement and may issue a notice in the meantime to address a few issues that were not fully covered in the current agreement.
  • Dividend Equivalent Payments (871(m)) – the IRS is planning to issue the final regulations on withholding on dividend equivalent payments soon.  These regulations will retain the delta standard but will contain significant changes to reflect the feedback received on the proposed rules.  The regulations will also push back the effective date of the regulations to apply to contracts and payments made after 1 January 2017.

Other IRS FATCA Updates

Updated IDES Information

The IRS has recently updated several of the IDES web pages including the IDES Resources, the IDES Technical FAQs and the FATCA XML Schema Recommendations for DocRefId web pages.

Upcoming IDES Testing Period

The FATCA IDES opens on Monday, June 1 2015 for testing and will be available until 12:00 EST on Monday, June 8 2015.  All users that have completed their IDES enrollment by Thursday, May 28 2015 will be able to access the test session.

Recent Developments in IGA Countries


On 20 April 2015, the Federal Public Department of Finance released the Belgian FATCA Guidance Notes in draft format.

Additional information about the implementation of FATCA in Belgium can be found on the Federal Public Department of Finance’s website.

British Virgin Islands

Reporting British Virgin Islands financial institutions that have not already done so need to register with the British Virgin Islands Financial Account Reporting System by 1 June 2015.  Nil reports are not required to be filed but if a financial institution would like to do so, such a financial institution would need to register to be able to do so.  For more information, please see the recent press release.

Cayman Islands

On 20 May 2015, the Cayman Department for International Tax Cooperation issued another update concerning the notification and reporting deadlines for Cayman reporting financial institutions.  Accordingly, notifications may now be submitted on or before Friday, 29 May 2015 and returns may be reported on or before Friday, 26 June 2015, without attracting adverse consequences or enforcement measures.


On 27 April 2015, the French tax authorities released a revised version (1.4) of the IT requirements for FATCA reporting.


The German tax authority (Bundeszentralamt für Steuern) frequently publishes information alerts in the German language for financial institutions and service providers. The information alerts are in the form of non-binding guidance but should be monitored by financial institutions operating in Germany.

In April, the German tax authority released an information alert addressing the publication of a communication handbook. This communication handbook gives detailed guidance on how to register as well as how data should be transmitted to the German tax authority via the “ELMA” procedure. Moreover, the most recent information alert offers the possibility of performing a testing procedure for reporting purposes.


On 29 April 2015, the United States and Kuwait signed a Model 1B Intergovernmental Agreement (IGA) to improve international tax compliance with respect to the Foreign Account Tax Compliance Act and to combat international tax evasion.


On 19 May 2015, the Inland Revenue Board of Malaysia (IRBM) posted an update stating that the date for submission of information in accordance with the draft FATCA guidance notes to IRBM has been postponed from 30 June 2015 as the Malaysia-US IGA is still being finalised.  A new date will be announced in a future posting.


The Mauritius Revenue Authority (“MRA”) has announced that Mauritius-based financial institutions registered with the IRS for FATCA reporting have to report information in respect of the year 2014 to the MRA by 31st July 2015 for onward transmission to the US IRS.


The Mexico-US intergovernmental agreement to implement FATCA requires financial institutions which are located or resident in Mexico such as banks, asset managers, insurance businesses or fiduciaries (among others) to report financial information on certain accounts owned directly or indirectly by U.S. persons, to the Mexican Tax Authorities (Servicio de Administración Tributaria or SAT).

The filing deadline for the first of these reports was originally set at 31 May 2015, however, the Mexican tax authorities have this week announced on their website a revised deadline of 15 September 2015. This will shortly be published in the Official Gazette.

The first FATCA reports must now be submitted by 15 September 2015 and will include information such as:
· Name, address and tax reference number of the client
· Average monthly account balance or value and account number

Both entities and individuals will need to be reported. So, if the financial institution has any clients who are a) US individuals; b) US entities; or c) non-US entities controlled by US individuals or US entities (“US clients”), such financial institutions will need to be ready to report by 15 September 2015.


The deadline for reporting to the Dutch authorities is 1 June 2015.  By then, financial institutions in the Netherlands need to provide a specific set of data to the Dutch tax authorities (DTA) based on the FATCA IGA concluded between the Netherlands and the US.  For more information about how PwC Netherlands can assist you with this reporting, please see the attached flyer.


On 4 May 2015, President Bronislaw Komorowski signed a bill ratifying the agreement with the United States concerning enforcement of the Foreign Account Tax Compliance Act (FATCA), which provides a basis for the exchange of information about income and accounts of tax residents between the United States and Poland. The implementation process has not been finalised as the bill implementing the IGA (which is different from the bill on ratification) is still in the legislative process.

United Kingdom

On 15 April 2015, the UK’s International Tax Compliance Regulations 2015 came into effect.  These supersede the previous FATCA regulations that came into force on 20 June 2014.  For more information regarding the changes, please see our recent PwC UK News Release.

The UK has also published an updated FATCA Schema, updated guidance regarding registration and reporting, and guidance around the recent changes for the classification of holding companies and treasury companies.


If you have any questions to the recent comments, please feel free to contact me.

“Gilded Age” 2.0 – Billionaires Study 2015

billionairesBillionaires: Master architects of great wealth and lasting legacies

The majority of today’s self-made billionaires have built their wealth – totalling over USD 3.6 trillion – within the last two decades. Within Europe about half of all billionaires come from the consumer industry. The new UBS and PwC “Billionaires” study also shows that Asia is on the road to becoming the billionaire hub of the future.

Find out more about the study here.

A different energy future

14th PwC Global Power & Utilities Surveyenergy

We are witnessing considerable disruption in the power sector arising from a combination of policy, technological and customer change. It’s creating a transformation in how we think about, produce and use electricity. In some parts of the world, disruption is already taking a strong hold. In other parts of the world, it is just beginning. It comes on top of the already considerable existing challenges companies face in providing energy security, affordability and sustainability.

The PwC Global Power & Utilities Survey goes to the heart of boardroom thinking in utility companies across the globe. In this, our 14th edition, we look at the major changes facing the sector as it gets to grips with the prospect of a very different energy world ahead. We look at the way companies expect their markets and business models to change in the period to 2030 and get their viewpoint on the outlook for the energy trilemma and risks facing them in the short term. For many, the current way of doing business is at stake and survey participants give their insight on what operational changes lie ahead and whether the future will bring success or failure.

Read more here.

The FTA can forget its percentage calculations – Federal Court judgement on the 25/75% practice

With unusual clarity the Federal Court has found against the Federal Tax Administration (FTA). At issue was the tax liability of a foundation, which operates a museum. The FTA struck the foundation off the VAT Register as of 1.1.2010, because „the costs of an activity are not covered in the long-term as to at least 25% by revenues from supplies and services (excluding investment and interest income), but more than 75% by non-considerations, such as subsidies, donations, cross-financing, contributions of capital, etc.“.

Continue reading…

A new Internet tipping point – consumers getting more power… and responsibility

I’ve recently come of age in the world of the Internet, it’s 21 years since I first signed up for my Demon Internet account. Using a modem at speeds we wouldn’t recognise these days, I was just grateful to get online! The ability to email people outside of my organisation and to find pieces of code (yes I did purport to write code all those years ago) was invaluable.

It wasn’t long before we started to do minimal ecommerce, buying from Amazon and the like. For me this included discovering the wide range of books online that I could buy and learn from. As the ‘Information Super Highway’ – as it was then called – got more popular, so we were enticed onto the highway with a simple trade: our data in exchange for free access to content. And we all want something for free, thinking that it won’t ever cost us!

Read more…

If you have any further questions, please contact us.

5 Growing Pains for Chief Data Science Officers

The role of The Chief Data Science Officer (CDSO) is new and evolving – and with evolution comes opportunities and challenges. We’re finding that CDSOs are faced with growing pains on several fronts – and if businesses can’t find a way to properly address some of these issues, the role of the CDSO could be at risk.

CDSOs are joining companies where the business case for their role is left ambiguous. This makes it difficult for them to demonstrate their value the organization. In an effort to define role and responsibilities, CDSOs must work with multiple stakeholders to forge strategic partnerships and carve a pathway to success.

Here’s where to start:

1) Avoid perpetuating “ivory tower” perceptions

The first order of business for CDSOs is to justify their existence and establish how they can contribute value to the organization. Start by building relationships. CDSOs need to work with business owners and subject matter experts to get deep into the business decisions and problems, and identify opportunities where they can use data and analytics to generate insights that enhance decision making. Failure to demonstrate value to the business can raise doubts about the legitimacy of the role.

Often, CDSOs are stepping into companies where there are multiple teams of functional analytics experts managing their data and technology platforms across multiple business units. CDSOs need to work with these existing groups to determine the right organization and operating model that can enhance the value they bring, while not slowing down the existing initiatives of business units.

2) Build Relationships with the C-Suite

Historically, enterprises have focused on traditional data warehousing, reporting and business intelligence in their use of data. But, now that every business function wants to use technology to advance their business goals, the enterprise needs to use data in new ways to make better decisions. Enterprises should use data exploration to inform business analytics. Tapping data to prepare for a possible future is the CDSO’s specialty and everyone’s interest. The CDSO should work with the CIO to educate the C-Suite and beyond on the importance of putting more organizational emphasis on predictive analytics. According to our 5th Annual Digital IQ Survey, C-Suite executives who effectively collaborate are far more likely to outperform their peers.

3) Find the funding

The governance mechanisms for funding in most organizations often confer power to those with the funds – typically P&L owners – and C-level committees. Given the role CDSOs and teams play as a “shared service” traversing IT and business functions, it is important for them to be able to make a direct request for funds as opposed to through one of the many groups they work with or support. To secure funds, CDSOs should pull out all the stops with visualizations, demos and prototypes to “make it real” to business owners how they can enhance their performance with improved analytics.

4) Navigate the vendor landscape

As with any emerging area, the field of data science is filled with a host of start-ups and established companies claiming to offer just the ‘right’ solution for the company. CDSOs must carefully evaluate products based on the organization’s business case – and that’s no easy feat given the multitude of options in today’s crowded marketplace.

Some tools are designed as horizontal offerings that are shallow and not as deep, but more easily integrated across business units. Other solutions plunge into a particular industry or functional area, but are ‘special-purpose’ tools that aren’t versatile nor can be easily integrated with existing solutions.

By the time the company realizes they need something different, executives can sometimes invest a lot of time and money trying to make the product work. It’s a chore trying to move onto something different, especially explaining the shift to senior management. Decisions around when to use proprietary vendor solutions versus open-source alternatives is also a challenge that CDSOs need to grapple with.

5) Change the decision-making mindset of executives

In our recent global Big Decisions Survey, more than 58% of executives made decisions based on their own intuition or experience or those of others. Only 29% relied on data-driven decisions. Executives say they want to use analytics and data, but it’s still not prevalent at companies, in the C-Suite or beyond. Technology companies and younger employees are much more accustomed to using data to steer the ship, but most executives make decisions based on their gut reactions.

Executives can be hesitant to use more advanced data and analytics techniques to inform their actions, especially if the data contradicts what they feel is the right way to go. CDSOs must break deeply ingrained habits using an “art” and “science” approach to data. Creating compelling, visual proof-of-concepts/prototypes with simulation and gaming elements can allow executives to combine their intuition and experience with data & analytics to improve decision making.

We’ve only scratched the surface of the many issues that CDSOs are struggling with as they navigate uncharted waters. We’ll delve into each of these areas more and explore how CDSOs can chart a course for success. In the meantime, let us know if you have any other additions to our list.