Wiesbaden, 24 October, 2007 Svetlana Shutova Statistics Estonia Implementation of the Statistical Unit “Enterprise” in the Estonian Business Register for Statistical Purposes Wiesbaden, 24 October, 2007 Svetlana Shutova Statistics Estonia

Background information Statistics Estonia created the Statistical Business Register in 1994 Currently the Register includes the following statistical units: legal unit, enterprise, local unit, kind-of-activity unit, local kind-of-activity unit, enterprise group Up to the year 2007 every active enterprise in the Register consisted of one legal unit

Definiton of the Enterprise according to the Council Regulation on Statistical Units The enterprise is the smallest combination of legal units that is an organizational unit producing goods or services, which benefits from a certain degree of autonomy in decision-making, especially for the allocation of its current resources. An enterprise carries out one or more activities at one or more locations. An enterprise may be a sole legal unit

Project to Implement Complex Enterprise 15.04.2019 Project to Implement Complex Enterprise Period of the project — March 2006 – April 2007 Financed by Eurostat

Aim of the Project To implement Complex Enterprise in the Register 15.04.2019 Aim of the Project To implement Complex Enterprise in the Register To integrate the new unit into the process of producing statistics The delineation of Complex Enterprise is practical only in case it is implemented both in the Statistical Register as well as in the production of statistics

Tasks accomplished during Project Implementation Methodology and experience of other NSI’s have been analysed A national approach for forming Complex Enterprises has been developed The methodology of Complex Enterprise was discussed with statisticians and external users The risks associated with the proposed innovation were mapped The structure and principles of implementing Complex Enterprise in the Register and production of statistics were agreed upon A model for recording and maintaining the Complex Enterprise data in the Register was developed

Experience of other NSI’s The automatic rules’ method or manual approach Mass production of CE’s or profiling of single cases

Main criteria to indicate the existence of Complex Enterprise 15.04.2019 Main criteria to indicate the existence of Complex Enterprise Market orientation Sharing factors of production Availability of accounts

Sources of information 15.04.2019 Sources of information Register of enterprise groups Estonian Tax and Customs Board Annual bookkeeping reports

Register of enterprise groups Register created in 2004 Since 2005 — regular enterprise groups’ data production and publication Coverage — all-resident and truncated enterprise groups Sources of information — Commercial Register and Estonian Central Register of Securities

Estonian Tax and Customs Board 15.04.2019 Estonian Tax and Customs Board According to the Value Added Tax Act a parent undertaking and its subsidiaries may be registered as a single taxable person on the basis of a joint application. As a single taxable person can also register taxable persons whose shares or votes (determined by the shares at least 50 per cent) are owned by the same person. Persons registered as a single taxable person submit the value added tax returns separately but are jointly liable for payment of value added tax in time

Annual bookkeeping reports 15.04.2019 Annual bookkeeping reports Annual accounts — balance sheet, income statement, cash flow statement and statement of changes in share capital Management report — an overview of the activities of the enterprise, assessment of the financial position and business activities of the accounting entity, significant events in the financial year and the likely future developments in the following financial year

Criteria to extract the population of potential CE’s 15.04.2019 Criteria to extract the population of potential CE’s Based on the data of ownership links Pairs of legal units were selected, where both units are active and the subsidiary is entirely owned by the parent company Pairs of legal units with 20 or more employees were selected, where parent company has only one subsidiary Annual bookkeeping accounts were used for further in-depth analysis

Delineation of potential Complex Enterprises

Combinations of legal units in enterprises Separate legal unit for factor of production (e.g. employment) Separate legal unit for one single process of production (e.g. intermediate product of footwear) Separate legal unit for ancillary activity (e.g. wholesale) Separate legal unit for one single process of service (e.g. cleanliness and maintenance of cities)

Co-operation with statisticians All the branches of statistics and the methodologists should take part in developing the procedures and rules for treatment of Complex Enterprise as a reporting unit for statistical data collection

Discussion with statisticians The delineation methodology of Complex Enterprises was introduced The main criteria for forming a Complex Enterprise were outlined Factors that might indicate the formation of potential Complex Enterprise were discussed

Concerns expressed by statisticians 15.04.2019 Concerns expressed by statisticians The changes in methodology have to be explained to the users of statistics The commentaries and explanations have to be incorporated into metadata How to match the statistical data and the data from administrative sources Recalculation of data in time series, etc

15.04.2019 Major concern How to produce regional and/or activity-based statistical data, if different legal units were incorporated into one enterprise

Co-operation with external users Bank of Estonia Ministry of Social Affairs University of Tartu Tallinn University of Technology

Risks noticed by external users 15.04.2019 Risks noticed by external users Necessity to amend report forms and manuals Matching of the data received from different sources could be problematic CE should contain only the legal units which are residents of one country From the point of view of labour policy analyses, CE might make the link between an employee and his/her location of employment complicated Important internal aspects of an enterprise group could be lost for economic analysis

Structure of the register

Model for recording the Complex Enterprise data in the Register

Maintaining the Complex Enterprise data in the Register Classification on relations between units includes new components (Head of CE, Member of CE) Brief information on both the structure and the demographic data of CE is recorded in the notes More detailed information on CE is maintaned outside the Register (Report on CE)

Maintaining of Complex Enterprise in the Statistical Info System Supplying data on enterprises for the electronic data collection system (eSTAT) Sending out information letters Sending out reminders Answering queries, etc

Example of CE. Preliminary information

Example of CE. Structure of EG

Example of CE. Changes in the structure of EG

Example of CE. Record in the register

Decrease of statistical burden

Conclusions Implementation of Complex Enterprise is practical only in case it is implemented both in the Statistical Register as well as in the production of statistics In future, the topic of Complex Enterprise could be discussed in Eurostat not only within the area of statistical registers but also in other statistical areas It would be useful to continue the good practice of profiling seminars. It would be a great advantage, if branch statisticians could also be invited

15.04.2019 17.09.2007