PwC Luxembourg reports jump in revenues

Accounting giant PwC, the sixth-largest employer in Luxembourg, has reported an 8% jump in revenues year on year.

The company's Luxembourg branch said revenues had grown to €404 million for the year ended 30 June 2017, compared with €374 million for the previous year.

"Our strategy of investing in technology, quality, innovative new services and recruiting top talent paid off, with strong revenue growth across all our lines of business in 2017," said John Parkhouse, CEO at PwC Luxembourg.

Parkhouse warned, however, that there were "signs of a new world order" and rising protectionism that could hit global growth.

"Protectionism is on the rise, and with it comes slower growth because of the friction it adds to the free movement of people, capital, goods and ideas, as well as increased regulatory complexity," he said.

"Despite this global uncertainty, Luxembourg remains determined to create new paths of growth and to adapt to stay relevant for the long term."

Earlier this month, the PwC network reported total global gross revenues of $37.7 billion (€32.1 billion) – an increase of 7%.      

Luxembourg revenues

PwC Luxembourg said it generated 39.9% of its gross revenues from audit services, 32.7% from tax services, 22.6% from consulting and 4.8% from other assurance services.

It audits 52.4% of the Luxembourg asset and wealth management market in terms of assets under management.

The company expects to employ 2,850 people by January 1, 2018. During the course of the year to June, it added 250 more professionals and 500 graduates to its staff.

Women make up 47% of PwC Luxembourg's workforce, while 27% of the Luxembourg company's partners are women, compared with 19% globally.

The company said it was focusing on technological change, including using artificial intelligence, and establishing joint business relationships with a dozen companies, including tech companies Lifeware and Talkwalker.

It also aims to digitise tax and accounting services.

Legitimacy and ethics

In a consultation with its stakeholders, PwC Luxembourg found 'legitimacy and ethics' was the key challenge facing the company.

It said "legality is not sufficient to justify offering services, which would question our added-value or be perceived as not conforming to recognised principles or accepted rules and standards in society".   

In its report, the auditor said it was "conscious" that it may have lost part of its stakeholders' trust during LuxLeaks. 

In November 2014, the LuxLeaks scandal erupted when whistleblowers at PwC leaked thousands of documents that revealed the Luxembourg government had offered huge tax breaks to major international companies. 

It prompted a global push against generous tax deals for multinationals, including the European Commission's anti-trust inquiries into Apple, McDonald's and Amazon, among others.

Amazon was ordered to pay €250m in back taxes to Luxembourg earlier this month, after the Commission concluded it received undue tax benefits, which it said amounted to illegal state aid.

"We are conscious about the current tax climate and the shift in the public sentiment around tax planning," said Wim Piot, Managing Partner and Tax Leader at PwC Luxembourg. 

"We wish to be proactive and forward-looking, and we want to change where needed.

"This is reflected in various ways. One of the indicators of this change is that nearly 70% of the hours we produce in our tax department are dedicated to compliance."

(By Hannah Brenton, hannah.brenton@wort.lu, +352 4993 728)