Creating a safety net

Dhruv Chawla, Partner, Forensic Services, PwC India

Forensics Blog Pic

Over the past few years, financial crime has not only grown in its extent and scope, it has also become increasingly specialised with the use of technology. Today, ATM malware attacks, hacking of online accounts, trade-based money laundering and terrorist financing are just some of the many crime trends that financial institutions have to reckon with. Very recently in 2015, a bank based in India suffered huge losses in a cyber security attack. One of the employees colluded with external parties to use information of 100 customers and siphon off funds from their accounts using online banking application and duplicate SIM cards. Approximately Rs 25,00,000 was siphoned off from these accounts.

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Indian Real Estate – A growth story or a lost prospect?

By Bhairav Dalal, Partner, Financial Services

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National Capital – New Delhi
Commercial Capital – Mumbai
Real Estate (RE) Capital - ?

The question was answered in the recent release of PwC - ULI annual survey on Emerging Trends in Real Estate – Asia Pacific 2016. The survey seeks to decode the behaviour and patterns of this most unique sector. It also reveals that continuing with the past records both Mumbai and Delhi have sustained ranking within the range of 11 to 17 amongst the top 20 cities of Asia Pacific; Tokyo topping the charts once again! The only change in 2016 prospects is that Bengaluru is emerging to be an investor’s eye candy for real estate in India over other cities.

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Top 5 trends for Telecom in 2016

Arpita Pal Agrawal, Leader, Telecom, PwC India

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As another year passes and we prepare to usher in 2016, the Telecom sector in India in 2015 has been a mixed bag in terms of outcome. Spectrum auctions and the much awaited spectrum trading and sharing mandates spurred forward movement in the sector. 4G/LTE remained the buzzword but the actual rollouts have moved to next year.

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Is your money safe?

Sivarama Krishnan, Leader, Cyber Security, PwC India

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The financial services sector is now completely digital – and protecting it from cyber threats is imperative.

What makes cyber security particularly challenging in the sector is the vast attack surface that needs to be protected. Consequently, the nature of attacks in the financial services is also very diverse – it ranges from hacking, social engineering, to more recently, ATM skimming. Further, attacks focus on both, employees and customers, and unfortunately the chain is only as strong as its weakest link. A mistake by either one, could leave everyone compromised.

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COP21 Paris: the week gone by

Arvind Sharma, Executive Director, Sustainability

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What is the significance of the climate change talks at COP21 in Paris?

Since the climate change talks are being held in Paris, it is apt to reflect upon a quote by the French philosopher, Voltaire, where he stated, “Men argue. Nature acts.” The unprecedented flooding in Chennai and the dangerous smog levels in China, which began almost simultaneously with the launch of COP 21 in Paris, earlier this week, bears testament to this insight and reminds us of the urgency to decisively act.

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The road ahead for the BEPS project

 

This concluding video gives a perspective of where the BEPS project is headed and what steps are required to implement this project. The speakers also discuss the likely changes that the Indian government may bring to implement the BEPS project in keeping with the overall objective of 'ease of doing business in India' and finally, what it means for MNCs doing business in India.

A journey towards substance

 

Transfer pricing rules have never been as high on the political agenda as they are today. Given the growth in the volume and value of intra-group trade, transfer pricing rules can be misapplied so that they result in outcomes in which the allocation of profits is not aligned with the economic activity that created the profits. 

The work under Actions 8-10 of the BEPS Action Plan has targeted this issue to ensure that transfer pricing outcomes are aligned with value creation and the operational profits are allocated to the economic activities which generate them.

BEPS on Substance and Transparency

 

BEPS Report on Action Plan 5 focusses on the concern of preferential tax regimes that risk being used for artificial profit shifting. The report seeks to address the concern through suggesting the methodology for ‘substantial activity requirement’ separately for IP and other regimes and also improving the transparency through compulsory spontaneous exchange of certain rulings.

From an impact standpoint, it needs to be seen, how the OECD guidance on substance requirements and transparency is locally adopted and implemented by various countries. However, it certainly is a call to companies with cross-border multi-tier structures to review their structures in the backdrop of the ‘substantial activity requirements’ laid down by OECD.

Value creation through intangibles

 

The OECD final report on BEPS in relation to value creation through intangibles requires that a taxpayer would benefit from IP regime only to the extent the taxpayer itself has incurred the R&D expenditure that gives rise to IP income. This will require changes in business models, significant people functions, etc. to be performed in the country providing tax benefits. This will necessitate the tax payer to review the existing IP structures and evaluate the overall tax impact in the case of a change in the structures/regimes under which it is currently operating.

Prevention of treaty abuse

 

Treaty abuse, and in particular treaty shopping, was one of the main concerns of the BEPS project. Treaty shopping refers to the case when a taxpayer claims a tax treaty benefit when they are not really entitled to. Anti-abuse provisions have therefore been agreed upon by countries to be introduced in their tax treaties.

The opinions expressed in the blogs are personal.


 

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