The EU’s Anti-Money Laundering Directive will in the future also include “virtual currencies”

In its press release of 21 December 2017, the Austrian Financial Market Authority (FMA) announced that it welcomed the European Union’s agreement to include “virtual currencies” in the provisions on the fight against money laundering. According to the FMA, this is “an important step so that in the future, these online service providers will also have to identify, check and monitor their customers in the same way as the financial institutions in accordance with the usual due diligence obligations and monitor the transactions on an ongoing basis”.

In accordance with the provisions of the new EU Anti-Money Laundering Directive, exchanges for “virtual currencies” and so-called “wallet providers” (electronic wallets) will henceforth also be subject to the provisions of the Anti-Money Laundering Directive. The changes are to be implemented as followed:

  • The Anti-Money Laundering Directive applies to virtual currency swap exchanges where they offer the exchange of virtual currencies for legal currency. However, the Directive does not cover the exchange of different virtual currencies.
  • Providers of electronic wallets (so-called “Wallet Providers”), which manage the respective cryptographic keys of the holders of virtual currencies, are without exception subject to the provisions of the Anti-Money Laundering Directive. Wallet providers are also obliged to register.
  • The Anti Money Laundering Directive introduces for the first time a legal definition of virtual currencies.

As soon as the European process is finalised, legislators are required to implement and transpose the new Anti-Money Laundering Directive into national laws within 18 months.

Contact Us

Guenther Dobrauz
Leader PwC Legal Switzerland
+41 58 792 14 97

Tina Balzli
Head Banking, Legal FS Regulatory & Compliance Services
+41 58 792 15 54

Mark A. Schrackmann
Assistant Manager
Legal FS Regulatory and Compliance Services
+41 58 792 25 60

MiFID II: ESMA grants 6 months period of grace for LEI requirements

On December 20, 2017 the European Securities and Markets Authority (ESMA) has issued a statement to support the smooth implementation of Legal Entity Identifiers (LEI) requirements under the Markets in Financial Instruments Regulation (MiFIR).

Regulatory requirement

MiFIR obliges EU investment firms to identify their clients that are legal persons with LEIs for the purpose of MiFID II transaction reporting. Trading venues equally are obliged to identify each issuer of a financial instrument traded on their systems with an LEI code when making daily data submission to the Financial Instruments Reference data System (FIRDS).

Issues raised by market participants

In the last weeks, ESMA and national competent authorities (NCAs) learnt that not all investment firms will succeed in obtaining LEI codes from all their clients ahead of the entry-into-force of MiFIR on 3 January 2018. The same may be the case for trading venues’ non-EU issuers whose financial instruments are traded on European trading venues.

Six months grace period

In that context, and to support the smooth introduction of the LEI requirements, ESMA will allow for a temporary period of six months that:

  • Investment firms may provide a service triggering the obligation to submit a transaction report to the client, from which it did not previously obtain an LEI code. This is possible under the condition that before providing such service the investment firm obtains the necessary documentation from this client to apply for an LEI code on his behalf; and
  • Trading venues report their own LEI codes instead of LEI codes of non-EU issuers currently not having their own LEI codes.

ESMA statement

Read more



Guenther Dobrauz
Leader PwC Legal Switzerland
+41 58 792 14 97

Michael Taschner
Senior Manager
PwC Legal FS Regulatory & Compliance Services
+41 58 792 10 87

Peter Wueringer
PwC Legal FS Regulatory & Compliance Services
+41 58 792 17 48

EU-black listed jurisdictions: what you need to know in a nutshell

On 5 December 2017, the ECOFIN Council published the conclusions on the EU common list of (third country) non-cooperative jurisdictions in tax matters, also referred to as the EU ‘blacklist’. In this blacklist 17 jurisdictions are included. For the blacklisted jurisdictions the Council proposes EU Member States to adopt certain non-tax and tax defensive measures. Among the proposed tax measures would be e.g. increased audits, disallowance of deductibility of costs, withholding tax measures, application of CFC rules, reversal of the burden of proof, limitation of participation exemptions and switch-over clauses among others.

Switzerland and Liechtenstein appear on a “grey list”

In addition to the black list there is a “grey” list where Switzerland and Liechtenstein are included. The grey list inclusion means, that such jurisdictions still have certain harmful tax regimes (e.g. Swiss cantonal tax regimes). However, these jurisdictions have been determined as cooperative and committed to amend or cancel such regimes.

Swiss Tax Proposal 17

From a timing perspective, the Council Conclusions mention, that these jurisdictions “are committed to amend or abolish the identified regimes by 2018”. In context of the Tax Proposal 17, the existing cantonal tax privileges for holding, domiciliary and mixed companies will be abolished, but realistically only the legislative process at federal level can be completed during 2018 (but this we consider to be the relevant step). The finalisation of the legislative process at cantonal level will take more time and go well into 2019.

In our view and since the EU acknowledges Switzerland’s efforts to abolish the mentioned regimes we do not expect that the EU Council will include Switzerland into the black list, after an updated dialogue and assuming due progress regarding the Tax Proposal 17 is made during 2018.

Please also refer to the PwC EUDTG newsletter in this respect which you can read here.

For more insights and to understand the implications for your organisation, please contact Armin Marti.

Non-performing loans: Leveraging the right strategy to optimise your company’s balance sheet

The market for non-performing loans (NPLs) has been growing continuously over the past decade because credit quality has been deteriorating across the globe. While there have been positive signs in some markets, such as the EU as a whole, there are still some countries, such as Italy, Portugal and Greece, which are increasingly struggling with NPLs.

• This white paper aims to give you an overview of how you can assess and address your potential challenges relating to NPLs, from NPL strategy to operations, IT, people and change. We summarise our observations, experience and understanding of financial companies’ activities to optimise their NPL management. A key point is elaborating approaches to assess your NPL landscape (portfolio processes, KPIs, staff readiness, etc.), the subsequent NPL strategy design and its implementation.

• We outline our recent experiences with NPL actors in Europe, which have helped us gain a solid understanding of the needs of the NPL market and stakeholders’ expectations and how these interact and interdepend as well as how banks, and other market participants should approach NPLs. We extend the view beyond the simple management of NPLs to implications of current regulation (the European Central Bank’s guidance and IFRS 9) and how these create opportunities that can help institutions improve their overall business.

• We present potential solutions to the challenges of NPL, which we have gathered from our work. We lay out how well-defined quantitative and qualitative long-term objectives under appropriate portfolio segmentation and with specifically developed strategy options and early warning indicators (EWIs) as well as a decision tree for the strategy options and well-trained/experienced staff are all key elements to reduce NPLs successfully.

In this way, we hope to provide you some ideas to help you build expertise in your business to improve NPLs and general loan management. Implementing the suggested options (strategically and operationally) can increase profitability by means of a strategic NPL reduction accompanied by maximum recovery. We also point out the main risks of selecting the wrong strategy and how they can disadvantage your company. We present two case studies to help you understand what the risks are and how taking the right action can make a substantial difference. Finally, we link the NPL market’s and investors’ expectations to individual institution’s activities. This ties into the wider economic impact of the current NPL situation in Europe and the NPL market situation.

Read the full white paper here

Contact Us

Patrick Akiki
Advisory Partner
Tel. +41 58 792 2519

ePrivacy and the standard of data protection for the banking industry

Since some weeks, the European Commission has been working on the finalisation of the ePrivacy Regulation (ePR) which may become effective, together with the EU GDPR (General Data Protection Regulation), in May 2018. The ePR, compared to the existing ePrivacy Directive, is being designed to be “future-proof” and as such it will apply to all existing and future communication technologies.

As ePR will have an extensive scope, we can expect it will have a disruptive effect on companies’ digital set-up, including banks – which will have to redefine their digital strategies in line with the new requirements. And no bank will want to arrive unprepared for the regulation: non-compliance with ePR could cost financial institutions fines of up to 4% of revenues or EUR 20 million (whichever the highest).

One way in which the ePR affects banks is in relation to the considerable volume of electronic communications exchanged daily with their clients: the processing of these communications will be subject to stricter requirements under ePR. Another example relates to applications such as e-banking apps and on other Social Media activities, which will need to be redesigned in line with the new ePR requirements.

As ePR complements and particularises EU GDPR, banks can build on their existing processes with regard to EU GDPR to start defining strategies for ePR compliance. However, it is key to understand that this new regulation has an extensive scope: GDPR compliance by itself will not ensure compliance with ePR.

If you want to learn more about ePR, how it affects the banking industry and how PwC can help you in achieving compliance, read our newest publication on ePR.

Read the full paper


Please do not hesitate to get in contact with our experts:


Regulatory Transformation:

Patrick Akiki
Partner, Finance Risk and Regulatory Transformation
+41 79 708 11 07

Morris Naqib
Senior Manager, Finance Risk and Regulatory Transformation
+41 79 902 31 45


Günther Dobrauz
Partner, Legal FS Regulatory & Compliance Services
+41 79 894 58 73

Philipp Rosenauer
Manager, Legal FS Regulatory & Compliance Services
+41 79 238 60 20

PwC Digital Services

Reto Haeni
Partner, Cybersecurity and Privacy
+41 79 345 01 24

Nicolas Vernaz
Director, Data Protection and Regulatory Compliance
+41 79 419 43 30

We would like to thank Isabella Sorace and Mateja Andric for their valuable contribution to this publication.

Regulatory developments (TCFD)

Financial Stability Board Task Force on Climate-related Financial Disclosures (TCFD)

The G20’s Financial Stability Board (FSB) Task Force on Climate-related Financial Disclosures (TCFD) was convened to address concerns that companies are not sufficiently disclosing the impacts that climate change poses to their strategy, businesses and financial plans. Without adequate disclosure markets cannot function efficiently and risks are not appropriately priced.

Broadly climate risks can be divided into:

  • Transition risks such as climate policy (e.g. a carbon tax) or technological shifts (e.g. the rise of electric vehicles) which impact demand and costs of supply; and
  • Physical risks such as the impacts of more frequent/extreme weather events on assets, operations or supply chains.

The TCFD’s recommendations were launched in June 2017 and presented to the G20 Summit on 7–8 July. The report’s scope covers all companies with listed equity/debt in the G20.

Additionally, to address where concentrations of risk might lie, the scope also includes asset managers and asset owners e.g. pension funds, so covering the whole investment chain. Shareholders and other capital providers are increasingly looking to understand the resiliency of the companies they are invested in or lend to. Major institutional investors have publicly called for companies to make disclosure of climate risks a priority or face shareholder action.

TCFD recommendations and implications
The TCFD structured its recommendations on climate-related disclosures around four thematic areas:

  • Governance: extent of board and senior management oversight on the issue;
  • Strategy: risks and impacts on strategy, business and forward looking scenario analysis;
  • Risk Management: how climate risks are identified, assessed, managed and integrated into existing risk management frameworks; and
  • Metrics and Targets: how is performance on climate risk being measured.

The TCFD recommends disclosure in mainstream annual reports. It is a major shift away from sustainability reports where climate issues typically currently reside. This means that functions such as Finance and Investor Relations as well as the Audit Committee need to understand the financial implications of climate change and be in a position to explain whether such implications are material and how this is being governed, managed and disclosed.

Strategy functions will also need to consider how to incorporate such implications into long term plans. The TCFD recommends that companies conduct forward-looking scenario analyses to understand how their businesses will be impacted by climate change.


Stephan Hirschi
PwC ADV Consulting | Adv Consulting TIS
+41 58 792 2789

Raphael Rutishauser
ADV Consulting | Adv Consulting TIS
+41 58 792 52 15


EU Direct Tax Group

The following topics are covered in this issue of EU Tax News:

CJEU Cases

  • Austria – CJEU’s first judgment as court of arbitration in a double tax treaty dispute
  • Belgium – CJEU judgment on compatibility of interest payment deduction rules with Parent-Subsidiary Directive: Argenta Spaarbank
  • Germany – CJEU referral on compatibility of German limitation of deductibility of special expenses for non-residents with the freedom of establishment: Montag
  • Germany – CJEU judgment on compatibility of German deduction of special expenses with the freedom of movement for workers: Bechtel
  • Netherlands – AG Opinion on compatibility of Dutch fiscal unity regime with fundamental freedoms, and the Dutch Government’s emergency response measures
  • Sweden – CJEU referral regarding final losses in indirectly held subsidiaries
  • Sweden – CJEU referral regarding final foreign losses
  • United Kingdom – CJEU judgment on taxation of transactions for the raising of capital : Air Berlin Plc
  • United Kingdom – CJEU judgment on the application of UK capital gains tax on a deemed disposal of all of the assets of a trust: Trustees of the P Panayi Accumulation & Maintenance Settlements
  • United Kingdom – CJEU judgment on the UK tax treatment of foreign income dividends : Trustees of the BT Pension Scheme

National Developments

  • Norway – EFTA Court advisory opinion opens door to cross-border group contributions with tax effect
  • Norway – Amendment to the group contribution rules
  • Sweden – Dividend tax rule deemed incompatible with EU law
  • United Kingdom – Court of Appeal in Routier v HMRC regarding the UK definition of ‘charity’ and its compatibility with the free movement of capital

EU Developments

  • EU – European Commission issues Communication on the taxation of the digital economy
  • EU – Directive on Tax Dispute Resolution Mechanisms formally adopted
  • EU – European Council President Tusk’s new EU reform plans
  • EU – Tallinn European Council Conclusions of 19 October 2017
  • EU – European Commission adopts Work Programme for 2018

Fiscal State aid

  • EU – European Commission takes next steps against Ireland and Luxembourg in Apple and Amazon State aid cases
  • Netherlands – Court of Appeal refers preliminary questions on possible State aid to the CJEU
  • Spain – Supreme Court resolution about Spanish tax on immovable property
  • United Kingdom – European Commission opens formal State aid investigation into financing income exemption within the UK’s CFC regime

Read the full newsletter

This bi-monthly newsletter is prepared by members of PwC’s pan-European EU Direct Tax Group (EUDTG) network.

To receive this newsletter and our newsalerts automatically and free of charge, please send an e-mail to: with “subscription EU Tax News”. For previous editions of PwC’s EU Tax News see:

Contact Us

Armin Marti
Partner Tax & Legal Services, Leader Corporate Tax Services
+41 58 792 43 43

Emerging Trends in Real Estate

Rethinking real estate

Overall, an optimistic outlook prevails throughout most of Europe’s property industry, with nearly half of this year’s respondents expecting European economic growth to improve over the next five years.

But the geopolitical backdrop is creating a shift in focus, with concerns moving from the regional to the global.

Emerging Trends in Real Estate® Europe 2018 reveals an industry that is becoming more complex, yet more transparent and accessible. Whatever the outcome, it is certain that the industry will need new skill sets, new ways of collaborating outside traditional industry boundaries and new business models to survive and compete in the new real estate ecosystem.

Dive deeper


Kurt Ritz
Partner, Real Estate Advisory
+41 58 792 14 49

Marie Seiler
Director, Real Estate Advisory
+41 58 792 56 69

Regulatory developments

Non-financial reporting – International Integrated Reporting Framework

The International Integrated Reporting Council (IIRC) launched the first version of the Integrated Reporting (IR) Framework in December 2013. The IICR unites representatives from all major international standards setting bodies and regulators with company representatives, investors and other key representatives to develop an internationally recognised framework. The IR Framework identifies investors and capital providers as the primary addressees for an integrated report.

Key elements
The Framework is intended to show how companies create long-term value by incorporating information on the environment, strategy, governance, performance and outlook. Investors should be informed about how a company’s strategy can create value in the long term as well as where a company actually stands regarding the achievement of its goals as defined in the strategy.
The Framework focuses on different types of capital, which are created and used by an entity. Based on the respective business model, the different types of capital (e.g. financial, produced, intellectual, human, social and natural capital) are used to create value (also a type of capital). These types of capital are said to have ‘connectivity’. Such connectivity can be illustrated particularly well in the case of pharmaceutical companies in the field of intellectual capital, the investments it makes in potential products and the sales that are subsequently generated.

It can also be demonstrated in other areas, such as human capital, for example: investing in the development of employees’ competencies has an influence on resource management and, ultimately, on the financial performance of a company. Non-financial objectives can also lead to the achievement of financial objectives.

Importance and implementation in practice
Within the Framework of the IIRC Pilot Program Business Network, more than 100 companies from 25 countries have implemented the principles of the Framework. However, apart from companies listed in South Africa (where IR is mandatory), almost no companies apply the entire Framework at present, although most of them intend to continue to work towards it.
The same dynamic is visible in Switzerland. To date, no single company has applied the Framework as such. However, more and more Swiss companies are moving towards adopting the Framework, as the implementation of individual elements from the IR concept is becoming evident. Most of the companies are developing the concept by integrating elements of the Framework in their annual reports. Some companies publish a short report (‘review report’), in addition to their annual report, using the Framework as a base. Detailed information on sustainability is generally published in a separate and distinct ‘sustainability report’.

Non-financial reporting – SIX Directive on Sustainability Reports

Key elements
In July 2017, SIX issued new regulations regarding sustainability reporting by amending the Directive on Information relating to Corporate Governance (DCG). Issuers have the opportunity to inform SIX that they issue a sustainability report in accordance with an internationally recognised standard (art. 9 DCG in conjunction with art. 9 para. 2.03 DRRO). SIX will make public the names of those companies that decide to publish sustainability information (‘opting in’) on their websites.

If an issuer decides to opt in, the sustainability report has be produced in accordance with an internationally recognised standard as published by the SIX:

  • Global Reporting Initiative (GRI)
  • Sustainability Accounting Standards Board Standard (SASB Standard)
    United Nations Global Compact (UNGC)
  • European Public Real Estate Association Best Practices Recommendations on Sustainability Reporting (EPRA Sustainability BPR)

The sustainability report must be published on the issuer’s website within eight months of the balance sheet date for the annual financial statements. It must subsequently remain available in electronic form on the issuer’s website for five years from the date of publication.

Companies remain free to issue and publish a sustainability report in line with an internationally recognised standard without reporting this to SIX. It is also permissible to include certain sustainability topics in their annual report.

More and more stock exchanges (about one-third worldwide) provide guidelines for disclosing information on the environment, social and governance (ESG) matters. The UN Sustainable Stock Exchanges Initiative (SSE) recommends exchanges provide companies with principles-based guidelines, whilst the World Federation of Exchanges (WEF) proposes that stock exchanges provide companies with specific ESG indicators. This has already been done by a number of stock exchanges, in particular in emerging economies such as Brazil, South Africa, Singapore and Taiwan. ESG indicators are provided, which are to be reported either on a voluntary or binding basis and which can often be derogated in justified cases (‘report or explain’).

In contrast to this, SIX requires only those companies that opt in on a voluntary basis to adopt an internationally recognised standard.

Non-financial reporting – EU Directive on the disclosure of non-financial and diversity information

EU Directive on the disclosure of non-financial and diversity information
The purpose of the EU Directive as regards the disclosure of non-financial and diversity information is that companies of public interest with more than 500 employees (in particular, listed companies) provide information on environmental, social and workers’ rights topics, respect for human rights and the fight against corruption as well as its strategy, results, risks and business model. If the undertaking does not pursue a strategy on one or more of those topics, this has to be explained (‘report or explain’).

In addition, listed and certain other capital-market-oriented companies must describe their diversity policy with regard to management and control bodies in the corporate governance report. This disclosure should also include information on age, gender, educational background and the objectives of this policy and its implementation and results.

Member States were obliged to transpose the directive into national law by 6 December 2016. The directive applies to financial years beginning after 1 January 2017.

This EU Directive is also relevant to Swiss companies whose subsidiaries are active in the EU and which are regarded as companies with a public interest (such as banks and insurance companies).


Stephan Hirschi
PwC ADV Consulting | Adv Consulting TIS
+41 58 792 2789

Raphael Rutishauser
ADV Consulting | Adv Consulting TIS
+41 58 792 52 15


EU Commission publishes a proposal for the Definitive VAT System for Cross Border EU Trade

As part of the VAT action plan introduced on 7 April 2016, the EU Commission announced a legislative Proposal for the Definitive VAT System for Cross Border EU Trade.

This proposal was published on October 4th, 2017 (hereafter referred to as the “Proposal”) and introduces the cornerstones of the Definitive VAT System for Cross Border B2B EU trade[1]. This will be followed by a second proposal which is expected to be published in 2018 which will provide detailed technical provisions and guidelines on the application of the Definitive VAT System and the use of the transitional measure (two-step approach: quick wins in 2019 and definitive VAT regime in 2022).

The current VAT system characterizes each EU B2B cross border supply of goods in (1) an exempt intra-Community supply in the Member State of departure and (2) a taxable intra-Community acquisition in the Member State of arrival of the goods. The Proposal foresees in the introduction of one taxable supply in the Member State of destination of the goods, the so-called intra-Union supply. As a first step of the Definitive VAT System, the Proposal introduces the concept of a Certified Taxable Person or CTP. This concept allows for an attestation that a business can globally be considered as a reliable taxpayer. Only when the intra-Union supply is performed for a CTP, the supplier can apply the reverse charge mechanism. This means that when the buyer is not a CTP, the supplier will be liable for the payment of VAT in the destination country through a one stop shop mechanism.

To meet the request of the Council, as stated in the Council Conclusions of November 2016, the Proposal also foresees further amendments to the VAT Directive (so-called quick wins) in regards to VAT Identification Numbers, Chain Transactions and Call Off Stocks. The Council also requested the Commission to draft a common framework with respect to the documentation required to claim an exemption for intra-Community supplies, the latter is included in the proposal amending the VAT Implementing Regulation.

In respect to Call off Stocks (i.e. the situation where a vendor transfers goods to a warehouse for the disposal of a known acquirer to another Member State and that acquirer becomes the owner of the goods upon withdrawing the goods from the warehouse), the proposed solution considers the Call Off Stock as giving rise to one single transaction i.e. intra-community supply in the Member State of departure and an intra-Community acquisition in the Member State of arrival provided this is performed between two CTPs. In addition the application of the VAT exemption for intra-Community supplies is made conditional upon the valid EU VAT registration of the acquirer.

That said, in the case where one party in the transaction to Call Off Stocks is not a CTP, it is likely that the vendor will have to obtain a VAT registration in the country where the warehouse is located and to account for the VAT in the destination country. Given this added complication introduced as part of the Proposal, it is unlikely that the Member States will be able to maintain their existing specific regimes in their respective territories.

Last but not least, the Proposal foresees that in cases involving Chain Transactions the transport is to be assigned to the first leg of the chain transactions if (i) the intermediate supplier has a VAT registration in another Member State than the Member State of departure, (ii) this intermediate supplier communicates to the initial supplier that the name of the Member State of arrival and (iii) both the intermediate supplier and the initial supplier are CTPs. When one of the conditions (i) or (ii) is not met the transport is allocated to the second leg of the chain transactions.

In the event that a non-CTP is involved, the automatic allocation of the transport will not apply and, thus, the parties will still have to document and demonstrate to which transaction the transport is allocated and apply the related VAT regime to the said transaction (domestic supply, intracommunity supply, etc.).

The Proposal for implementing regulations requires the Member States to apply the provisions as of 1 January 2019. Although there is still more than a year to go, companies should already be planning and evaluating what implications this can have on their supply chains.

In addition if these provisions focus primarily on the cross border EU trade of goods, one cannot exclude that the concept of Certified Tax Person will be extend to the B2B supply of services taking into account the existing background and the fact that such concept was discussed and considered during the implementation of the VAT package in 2010.

Within the next three months, companies should take the following actions:

  • Map Intra-Union Flows

    Detailed mapping of intra-Union flows will allow you to measure potential impacts of the change on your business and adopt an action plan (e.g., update IT systems, adjust invoice templates, manage VAT registration requirements, train your staff, review offers, contracts and agreements, etc.)

  • Assess Applying for Certified Tax Person Status

    Depending on your business flows and organisation, obtaining Certified Tax Person status could be required.

Download full newsletter

We look forward to supporting you in enabling your employees, IT systems and processes to deal with the new intra-Union VAT regime and managing your VAT position.


Patricia More
Partner VAT, PwC Geneva
Tel. +41 58 792 95 07