1. Some elements on compliance actions and threshold setting in the Italian Intrastat system
ADVANCED ISSUES IN INTERNATIONAL TRADE IN GOODS STATISTICS ESTP training course 2 April 2014 Maria Serena Causo & Fernanda Panizon

2. The Italian Intrastat data collection system
Regulation (EC) No 638/2004
Regulation (EC) No 1982/2004
established a close link between the Intrastat system and VAT and VIES systems:
Tax administrations are required to provide monthly VAT and VIES data to NSA, to be used for quality assessments of Intrastat collected data (coverage, non-responses, late-responses, comparing breakdown of taxable amount by partner nationality from VIES data with breakdown of statistical value by partner country in Intrastat data).
NSA are required to build and maintain an operator register based on VAT or VIES data
NSA are required to set appropriate exemption thresholds to be yearly calculated on the basis of collected Intrastat information and VAT data for below threshold trade

3. Back in 1993…
Back in 1993 the Italian Intrastat data collection system was designed in such a way
to exploit as much as possible the fiscal information available for statistical purposes
to relief operators from the double duty of complying to both fiscal and statistical obligations
HOW?
Intrastat data collection system, managed by the Italian Custom Agency, is based on an integrated form, serving both VIES and INTRASTAT data collection
… AND IN 2014 THE SIMSTAT PROJECT BENEFITS OF ALL THAT!

4. Availability of information for maintaining the operator register
PERIODICITY and REFERENCE PERIOD
DECLARANT ID
THIRD DECLARANT ID
SUMMARIZED INFO:
TOTAL NUMBER OF LINES AND TOTAL INVOICED VALUE
Availability of information for maintaining the operator register

5. FISCAL AND STATISTICAL VARIABLES
FORM FOR DISPATCHES:
FISCAL AND STATISTICAL VARIABLES
SUPPLEMENTARY UNIT: STATISTICAL
MODE OF TRANSPORT: STATISTICAL
Member State of the acquirer: FISCAL
CN CODE: STATISTICAL
INVOICED VALUE:
FISCAL
NET MASS: STATISTICAL
PARTNER COUNTRY: STATISTICAL
STATISTICAL VALUE: STATISTICAL
NATURE OF TRANSACTION:
FISCAL and STATISTICAL
PARTNER VAT NUMBER:
FISCAL
PROVINCE OF ORIGIN: STATISTICAL
DELIVERY TERM: STATISTICAL
PSIs below exemption threshold fill quarterly only the fiscal part
PSIs below simplification threshold do not declare statistical value, delivery term, mode of transport
Information on Partner VAT id is available at the single record level

6. Monthly data (fiscal and statistical variables) for
Constraints from the fiscal side to the statistical one: exemption thresholds
Since Intrastat forms are also used to report the fiscal information on trade on intra-EU services
Therefore, the Intrastat exemption thresholds introduced in 2010 where influenced by the fiscal need to have a good monthly coverage on services using a SINGLE THRESHOLD.
Monthly data (fiscal and statistical variables) for
trade > 50,000 EUR in at least one of the previous 4 quarters
Quarterly data (fiscal) for trade < 50,000 EUR in all previous 4 quarters

7. When do traders become Intrastat PSIs?
When and how?
Traders become Intrastat PSIs, i.e. they must fill MONTHLY the Intrastat form both for FISCAL and STATISTICAL variables, on the first month after the 50,000 EUR threshold is exceeded.
Example: 20,000 EUR dispatched in Jan, 40,000 EUR dispatches in Feb ->
monthly Intrastat PSI from March + only fiscal quarterly declaration only for (Jan + Feb)
Traders who did not exceed the threshold can report monthly if they wish to do so.
The deadline for submitting the declaration: 25th day after the reference period (month or quarter)
For how long?
Once the threshold is exceeded, PSIs have to report monthly at least for the next 4 quarters.

8. Obligations and Penalties
Not reporting monthly when the threshold is exceeded implies a violation of both fiscal and statistical obligations.
Penalties for fiscal violation:
Non-response: from 516 to 1,032 EUR
Late-response (submitted within 30 days from notification): from 258 to 516 EUR (64 EUR for voluntary reporting)
Partial or irregular or incorrect data: from 516 to 1,032 EUR if no correction or integration is sent, no penalty if a correction or integration is submitted
Penalties for statistical violation:
Partial or incorrect data: from 516 to 5,164 EUR
Partial or incorrect data if timely integrated/corrected after notification: from 258 to 2,582 EUR
Voluntary integration or correction: no penalty

9. Intrastat PSIs register
Monthly Intrastat PSIs are included in the Intrastat register with:
Identification data (VAT number, ID in the business statistical register) and contact details
Start and end of Intrastat activity
Traded values, recorded trade share and associate ranking over the years
Structural business characteristics (main economic activity, employees)
Transformation events (VAT number changes, etc.)

10. Monitoring trade coverage for Intrastat PSIs: who is monitored?
(task performed immediately after first data delivery)
A list of the most relevant PSIs to be monitored is build and maintained as follows
At the beginning of the new reference year the list is renewed/refreshed, selecting:
The top 300 PSI according to total traded value of the previous year +
The top 300 PSI according to average traded value in the months of activity (in order to detect very important PSIs who did not trade in all the 12 months, e.g. new VAT codes)
The top 300 PSI according to the total traded value of the IV quarter of the previous year (in order to detect PSI recently increasing their traded volumes)
The top 300 PSI according to the maximum monthly observed traded value in the previous year (in order to detect PSI who can account for very localized trading peaks)
For 2014, this procedure selected about 360 PSI to be monitored for each flow (most of them already monitored in 2013), covering 36% of on total 2013 dispatches and 41% on arrivals.
The initial list is investigated by an Intrastat for further fine-tuning
During the year the list is maintained, keeping track of changes in VAT codes, merging or splitting events

11. Which actions are undertaken when possible non-responses are detected?
Time series coherence tests for monitored PSIs are performed
At first, it is checked that no structural change event – splitting or merging has occurred (data source Chambers of Commerce).
In case of no Intrastat reporting, the PSI is contacted (Late report? Is the PSI declaration expected with the second data delivery? Is it necessary to perform a manual data integrations while waiting for an Intrastat report?)
In case of low observed traded value (possible partial response), the PSI is contacted (Incomplete reporting? Decrement in economic activity level?)
In case a structural change took place, after a first contact (in the first month of anomaly), the situation is just kept under control.

12. Distribution of intra-EU traders and threshold calculation
Intrastat regulation requires that a minimum coverage rate is assured On dispatches: 97% (Reg. (EC) No 638/2004) On arrivals: 93% (Reg. (EC) No 1093/2013) The minimum coverage must be reached by minimizing the number of Intrastat reporters (=minimize the statistical burden). HOW? By setting thresholds on traded value (REG. (EC) No 638/2004, Art. 10)

13. Distribution of the PSI population by 2012 total dispatched value

14. Structural differences between the distributions of PSI population on dispatches and on arrivals. (Traded values are expressed in thousands of EUR)

15. Setting the exemption threshold according to the minimum coverage requirement. How many Intrastat reporters?

16. Present IT coverage versus «minimum» coverage

17. The fact that the highly integrated data collection system (both for trade in services and goods) with a single exemption threshold leads to a high coverage/burden on the goods side, can be seen as a disadvantage. However, important economic sub-populations can have different structural characteristics.

18. NACE rev. 2 divisions 14: Manufacture of wearing apparel
Would a threshold set exactly on the 97% minimum coverage requirement properly cover important national economic activities?
Let us link PSI (=VAT numbers) with our business register and select sub-populations with main economic activity related with MADE IN ITALY:
NACE rev. 2 divisions : Manufacture of food products + Manufacture of beverages
NACE rev. 2 divisions 14: Manufacture of wearing apparel

19. It can be desirable to have an appropriate coverage on important national economic activities

20. When additional data sources are needed to be compliant The case of trade in electricity
Coverage ratio between customs data and alternative source (Terna S.p.A.)

21. New data sources TERNA S.p.A.
The national grid operator for transmission and dispatching of electricity and for the secure management of the balance between electricity supply and demand in the whole country
ENTSO-E
The European Network of Transmission System Operator for electricity, provides physical energy flows between European countries measured at the cross-border transmission lines

22. Estimating traded values by partner countries
The methodological approach to estimate traded values is based on the matrix equation:
Quantities from entry points are transformed into quantities by partner countries (using the weight matrix W, built from Entso-E data)
Values by partner countries are estimated by introducing a price diagonal matrix (built from monthly average prices on national European electricity markets)