Implementation of the new recommendations of IMTS 2010 and MSITS 2010

in Hungary

Challenges

Anita Bány

Hungarian Central Statistical Office Foreign Trade Statistics

Department

Things to talk about

Hungary in the world trade

Institutional arrangements

What are the main challenges?IMTSMSITS

Hungary in the world trade

Share in total export Annual growth rate Concentration by products and

partners Role of multinational enterprises

External trade, 1992 - 2009

60%

80%

100%

120%

140%

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Per

cent

(pre

viou

s ye

ar =

100

)

EXPORT IMPORT

Commodity pattern of external trade, 1996-2009

0%20%40%60%80%

100%

1996 2009

Imports

Machinery and transport Manufactured goodsFuels, electric energy Food, beverages, tobacco Crude materials

0%20%40%60%80%

100%

1996 2009

Exports

Machinery and transport Manufactured goodsFood, beverages, tobacco Fuels, electric energyCrude materials

External trade by types of transactions 1996 – 2009

0%

20%

40%

60%

80%

100%

1996 2009

Imports

General turnover of goods Processing0%

20%

40%

60%

80%

100%

1996 2009

Exports

General turnover of goods Processing

Concentration by main traders

Imports, 1996

Other51%

Main traders

49%

Exports, 1996

Main traders

44%Other56%

Imports, 2009

Other40% Main

traders60%

Exports, 2009

Main traders

54%

Other46%

Concentration by partnersImports, 1996

Italy7%

Russia11%

Germany27%

Other countries

40%Austria11%

France4%

Exports, 1996

Austria11% Other

countries39%

Italy7%

Russia5%

United Kingdom

4%

Germany34%

Imports, 2009

Other countries

38%

Austria8%

Russia9%

Germany31%

Netherlands6%China

8%

Exports, 2009

Italy7%

France7%

Germany32%

Romania6%United

Kingdom7%

Other countries

41%

Institutional background

HCSO’s responsibility for the compilation of trade in goods and services statistics

Institutional arrangements National Bank of Hungary Tax Authority Custom Authority Financial Supervisory Authority (ITS/insurance

services)

Institutional arrangements: National Bank of Hungary, since 2002

Goods: In 2003 payment data were replaced by data from the Custom Authority

Services: In 2005 switching from ITRS to direct reporting (quarterly data collection),

Annual working plan: Schedule on the introduction of new recommendation of

BPM6 Consistent treatment of multinational enterprises Joint forum in order to enforce the statistical needs with the

Tax Authority Register building of SPE’s

Institutional arrangements: Tax Authority, since 2004Use of tax data (VAT, VIES, corporate income tax):

Sample selection Data validation Consistency checks Estimation (Intrastat/traders under the reporting

threshold; ITS/construction in Hungary) Data transmission - government services Problems:

No consultation before any modifications on declarations, Insufficient contact information of VAT registrations

Institutional arrangements: Custom Authority, since 2003

Goods: Individual data on trade with third countries according to the Single Administration Document (SAD)

Services: Custom revenues levied for the EU (25% due to Hungary)

Problems: Statistical requirements can not be fully attained (Custom simplifications)

Overlapping issues IMTS, MSITS 2010

Processing

Merchanting

Specific movements of goods

Financial leasing – operational leasing

Processing 1.

Inward processing – processor is in country A, owner of the goods is in other country

Goods crosses

A’s border

Material Finished goods Processing fee

Processing to be

identified

1. Yes, export

acquired in country A (resident-non

resident/non resident-non resident transaction)

sold in country BFee paid by country C

NO- FTS- Export (finished goods)-country B

2. Yes, import acquired in country B

sold in country A (resident-non

resident/non resident-non resident transaction)

Fee paid by country C

YES- FTS- Import (material)- country B

Processing 2.Processing 2.Outward processing – owner of the goods is in country A, processor is in other country

Goods crosses A’s

border

Material Finished goods

Processing fee

Processing to be

identified

3. Yes, import acquired in country B

sold in country A (resident-non

resident/resident- resident

transaction)

Fee paid to country C

NO- FTS - Import (finished goods) - country C

4. Yes, exportFrom country A delivered to country B

sold in country C Fee paid to country B

YES- FTS - Export (material) - country B

5. No acquired in country B sold in country C Fee paid to

country D ITS data collection

Processing 3.FTS is incomplete: ? Data sources:

FTS (country information on processing fee, one leg transactions) ITS (CN) or both

? Transaction codes ? Evaluation of data (complex cases – multi-stage processing

more resident companies, VAT registrations involved). ? Backcasting of time series ? Valuation problems (VAT registrations, high technology

goods) ? Adjustments for national accounts, BOP (holding gains and

losses, overheads – inward processing) ? Additional information:

SBS VAT Corporate income tax Balance sheets

Merchanting

Merchanting is collected on quarterly basis in ITS data collection

Better coverage in DR than in ITRS Data sources: VAT, VIES Definition in BPM6 (new element according to

paragraph 10.48) Adjustments for BOP, NA ? new codes, data at CN level, monthly, quarterly data

needs

Specific movements of goods, financial leasing – operational leasing Reconciliation exercises in intra EU trade (big discrepancies):

country A (producer of the ship/aircraft) records trade in goods exports with country B

country B (operator, lessee) records trade in services imports with country C (lessor)

What kind of transactions are recorded between country A and country C?

Harmonised guidlines are needed Integrated approach: involvement of trade in goods, trade in

services, BOP, national accounts Exchange of information Case studies (different leasing arrangements within a company)

Main challenges, MSITS 2010 The content of these services has changed a lot:

Charges for the use of intellectual property Research and development services Computer services Audiovisual services

Difficult to interprete how to report Data sources:

FTS Capital account of BOP Balance sheets Information from the Patent Office R&D data collection in HCSO

Problem: Services between affiliated enterprises (imports)

Special Purpose Entities

The treatment of SPE’s is different in the statistics of countries

Proposal - Task Force dealing with the multinationals of GNI Committee of Eurostat

? ITS, national accounts Services that are traded (?) by these entities:

R&D Royalties and licence fees Operational leasing Merchanting

Their basic activity is invoicing and the main purpose of their activity is tax reduction.

Thank you for your attention!

anita.bany@ksh.hu