PwC's Short Reads - March 2024 Edition
1. Guidelines on the application of the 12% VAT rate
Following the introduction of the new 12% VAT rate applicable to certain supplies as from 1 January 2024, the Commissioner for Tax and Customs (CfTC) has issued guidelines to better explain the circumstances in which such a reduced rate is applicable.
The guidelines issued by the CfTC apply specifically to assessing the VAT treatment of the respective supplies when these are subject to Maltese VAT.
2. Amendments to the Solvency II Directive
A provisional agreement on the proposed updates to the Solvency II Directive has been reached, and whilst the implementation date is still uncertain, the expectation is that implementation will be in early 2026. The changes predominantly relate to addressing previous criticisms regarding the size and sensitivity of the risk margin (reducing the cost of capital from 6% to 4.75%), together with amendments to the calculation of the Solvency Capital Requirements (SCR) involving interest rate risk, symmetric adjustment and long-term equities.
3. Climate adaptation and its implications on organisations
In 2015, world leaders signed the Paris Agreement intending to limit the long-term global average temperature rise to 1.5°C, which is seen as crucial to help avoid the most damaging impacts. Crossing this threshold could lead to severe consequences, including but not limited to extremely hot days, higher sea levels increasing the risk of floods, significant loss of coral reefs and biodiversity loss, increased climate-related risks and poverty, and the potential of triggering irreversible tipping points such as the collapse of the Greenland Ice Sheet.
4. Empowering Digital Evolution
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In the ever-evolving landscape of business, companies are under constant pressure to adapt and innovate. This is where the Transformation Management Office (TMO) can help to successfully implement the actions needed for a digital transformation. It is a specialised entity designed to oversee and guide the complex process of transformation across an entire organisation.
5. Unravelling the makings of a good leader
Exploring what makes a good leader reveals traits that go beyond titles, position and power, focusing more on character and one’s belief system. Integrity is at the core of great leadership, guiding and role modelling behaviour even when no one’s watching. True leaders value honesty, respect, and responsibility. In an article by PwC on the Six paradoxes of leadership, effective leadership is described as being similar to walking a tightrope.
6. The Resilience Revolution
As businesses face a rapidly changing world, the challenges of geopolitical upheaval, soaring inflation and economic uncertainties have become ever more prevalent. Moreover, the disruptions from cybercrime, supply chain challenges and climate crises have emerged as daunting and unpredictable challenges. In such an environment, business leaders need to anticipate and respond to disruption proactively – not only to survive but to thrive.