A sophisticated hack can be catastrophic for a company. If executed with skill and precision, companies can lose sensitive product information to corporate espionage, reams of consumer information to malicious hacking syndicates and potentially a significant chunk of its share price once the world finds out — and find out it will.
For tax departments, data loss is particularly dangerous. Company data will contain tax information which is only required to be disclosed to tax authorities. Companies do not want this commercially sensitive information stolen and disclosed publicly. The tax world has recently seen the leakage of confidential documents, first in Hong Kong and then later in Luxembourg. Both leaks triggered extensive press coverage, much of it negative for companies.
As if the threat of data loss were not enough, companies operating in the European Union (EU) will soon have to contend with harmonized legislation designed to protect consumers from having their data lost, stolen or exploited.
Companies now need to invest in the best technology, not only to guard against hackers, but to ensure compliance with new EU data protection regulation.
Read more in issue 14 of Tax Insights, which explores both the challenges and opportunities for businesses presented by new and innovative technologies, and our Law Alert covering The European Court of Justice’s recent ruling on data protection Safe Harbor principles. For more information and advice please contact Fabrice Naftalski or Peter Katko.