The Luxembourg unit of the Big Four accounting firm PricewaterhouseCoopers has announced that its clients will be able to pay for services in Bitcoin a month from now.
In a press release, PwC Luxembourg indicated that it will begin accepting Bitcoin payments from October 1. The accounting firm will partner with a Luxembourg-based cryptocurrency exchange to integrate the Bitcoin payments.
— PwC_Luxembourg (@PwC_Luxembourg) September 3, 2019
Luxembourg, long considered a tax haven for corporations and ultra-rich individuals around the world, also houses Europe’s second-largest share of ultra-high worth individuals (net-assets above $30 million) after Monaco.
PwC championing mass adoption of Bitcoin
The audit, tax and advisory services firm has said that the move is aimed at meeting the ‘needs of clients’ and supporting the European country’s ‘crypto ecosystem’.
PwC Luxembourg already offers blockchain and crypto-assets advisory services and the firm consequently believes the exposure offered by accepting crypto payments will allow it to better serve its clients. Globally, PwC boasts of over 400 employees focusing on blockchain and crypto-related matters.
According to PwC Luxembourg’s Blockchain & Crypto-assets Leader, Thomas Campione, the exposure will especially help in better understanding the risks and opportunities presented by decentralized currencies:
It is very difficult to properly appreciate the challenges of AML/KYC-enhanced due diligence in a world made of public/private keys, with the complexity and risks of custodial solutions, or to comprehend the decentralized finance ecosystem growing “next door” without being exposed to it in its day-to-day activities.
In a statement that accompanied the Bitcoin announcement, PwC Luxembourg’s CEO John Parkhouse noted that one of the advantages of using cryptocurrencies in payments was that it resulted in ‘dramatic cost-saving[s]’. With cryptocurrencies offering a smooth, cheap and efficient way of transferring funds across borders, this will no doubt be an attractive method of payment for some of PwC Luxembourg’s clients.
Where the rich hide their wealth from their local taxman
Being the largest professional services firm in Luxembourg, a noted tax haven for transnational corporations and the ultra-rich, a significant portion of the firm’s clients have a global reach. Paying for services using Bitcoin and other cryptocurrencies will thus be a no-brainer for some of these clients.
Currently, according to the IMF, Luxembourg is among the world’s eight major pass-through economies. These jurisdictions host over 85 percent of the globe’s investments in special purpose vehicles which are usually created for tax reasons.
Luxembourg with a population and a GDP that is a fraction of the United States is also America’s 3rd-biggest investor due to the habit of corporations sending the money to the tiny country before rerouting it back to the U.S. Funneling profits through Luxembourg results in multinationals being charged a corporate tax rate of 1 percent thereby making huge savings.
By accepting Bitcoin payments, PwC Luxembourg is following in the footsteps of PwC Hong Kong.