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Hungarian Central Statistical Office Dpt. of External Trade Statistics

Hungarian Central Statistical Office Dpt. of External Trade Statistics. Goods Sent Abroad for Processing Lídia Bassó. TF on Goods Sent Abroad for Processing, Luxembourg 23-24 February, 2012 . Topics covered. Some figures on processing in HU Different scenarios of processing

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Hungarian Central Statistical Office Dpt. of External Trade Statistics

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  1. Hungarian Central Statistical Office Dpt. of External Trade Statistics Goods Sent Abroad for Processing Lídia Bassó TF on Goods Sent Abroad for Processing, Luxembourg 23-24 February, 2012

  2. Topics covered • Some figures on processing in HU • Different scenarios of processing • Challenges of measuring processing • A case of inward processing • Some conclusions of a HU survey on inward processing • Conclusions

  3. Number of PSIs involved in processing

  4. Share of after processing trade in total value Drastical drop in inword processing unlikely – indicates measurement problem!

  5. Some mirror statistics, 2010 Million EUR Mirror data even more unlikely! Why???

  6. Some methodology • Who has to declare Intrastat? • Economic operators with HU tax number • Declaring above threshold trade value in intra-EU acquisitions/deliveries VAT boxes • PSIs of Intrastat • Enterprises resident in HU • HU VAT-registrations of enterprises resident in other countries • Established for VAT purposes, e.g. for some scenarios of processing • Considered non-resident by NA and BoP(correction of ETS data) • A national characteristics of Intastat in HU – collection of added value (proc. fee) as invoiced value of NoT 51/52

  7. Why is processing underestimated? • Missing from ETS • Included in ETS but under different NoT code

  8. Processing missing from ETS Traditional processing transactions (41/51 from/to principal) • No info in intra-EU acquisitions/deliveries boxes of VAT • Processing fee incl. among services exports (with all other services) • New processor can not be found by the normal method

  9. Processing included under different NoT code Non traditional EU processing – principal should have HU VAT-registration • All materials for processing invoiced to VAT-reg. • from principal – transfer of stock (at transfer prices!) • from other countries – transfer of stock or acquisition • Intra-EU acquisitions in the VAT declaration • to be reported for Intrastat • no indication that it is for processing • Processed goods exported or sold in HU invoiced from VAT-reg. • The same as above (transfer of stock or sale) • No indication of processing One leg via customs! Different concept of processing.

  10. Number of enterprises inward processing & VAT-registrations 1040  460 16  350

  11. Challenges of measuring processing via VAT-registrations • Finding a contact person who declares Intrastat and gives info on activity • Who should declare and what transaction • VAT-reg. declare both flows in VAT – should declare in Intrastat as goods move through HU border. • For VAT-reg. involved in processing – transfer of stock or purchase/sale • For the HU economy – processing • VAT-reg.should declare processing in Intrastat • NoT declared by principal? • HU processor and the whole network of enterprises involved should be calarified – risk of double reporting!

  12. An inward processing case in HU EMS OEM Non-EU sellers EU seller 1 Foreign buyers HU VAT- registration Foreign branch of HU branch of OEM PRINCIPAL HU branch of OEM PROCESSOR HU branch ofEMS HU VAT-registration OEM CH distribution HU VAT-registration HU VAT-registration OEM CH sales Foreign buyers Domestic buyers EU seller 2

  13. HU survey on inward processing – some conclusions • Often significant discrepancy bw calculated and collected added values • Processing takes long time • Arrival of materials in large quantities; processing gradual • Several hundred parts processed into many products – large stock needed • Processed goods stored for a while (optimize transport / find a buyer) • Receives data from mother’s IT system, has no info • Processed goods declared at selling price, which incl. significant profit • No value of material or very low transfer price – value of processed goods estimated well • How to estimate country of principal • Partner country for all NoT 41–51 pairs / dominant 41–51 pair(s) [above 95%] • Definition of NoT 41/51 could be changed

  14. Conclusions • Value of processing underestimated – actions needed • HU processor’s fee in VAT services provided to EU  regular check • VAT-registration PSIs  collect info on activity, declare processing • Trace processing networks (checking data + avoid double counting) • Measurement solutions acc. to BPM6 • Based on ETS data • Classical case inward / outward  ETS value added + country estimation • Through VAT-reg. inward – request declaration of processing  FTS value added + GBR residence of VAT-reg. • Outward processing one-leg (NoT 42)  NBH new data collection • Off-site processing  incl. in ITS data collection • Collection as ITS – increase risk of double counting + lower coverage + increase burden on enterprises

  15. Thanks for your attention!lidia.basso@ksh.hu

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