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3.2. BUSINESS UNITS AND NONPROFIT ORGANISATIONS

Definitions

Registered enterprises: units which according to administrative registrations legally exist at the date of survey and have a tax number, including those under bankruptcy, liquidation and dissolution proceedings at the reference date.

Active enterprises: an enterprise is considered as active if in the reference year it has turnover or employment. The definition follows the methodology of the Eurostat business demography statistics. Since 2015 nonprofit business associations have been included in business demography statistics.

Entrepreneur: private persons falling under the competency of the Act on private businesses, and also those who carry out business activity and have tax number (e.g. free-lance professions). In case of active entrepreneurs the definition covers only private persons falling under the competency of the Act on private businesses.

Companies and partnerships: the total number of companies and partnerships contains both the number of companies with legal entity and the number of partnerships without legal entity. The definition "companies and partnerships" contains all enterprises except entrepreneurs.

Real births of enterprises: An enterprise considered as real new enterprise if it is active in a given year and it was not active in the previous two years. Enterprise birth with predecessor is not counted as a real birth.

Real deaths of enterprises: An enterprise considered as real dead in a given year if it is ceased its activities and is not reactivated within two years. Enterprise death with successor is not counted as a real death.

Survivor enterprises: An enterprise is considered to have survived if it is active in the year of birth and the following year(s), or also considered to have survived if it have ceased to be active, but its activity has been taken over by another enterprise.

Applied classification

The applied activity classification of the registered and the active enterprises follows the NACE Rev.2. The enterprises are classified by the HCSO according to their principal statistical activity. The statistical main activity is identified as the activity, which at factor cost contributes most to the total value added of the enterprise concerned.

Size classes: From 1 January 2004 the HCSO uses the number of persons occupied definition instead of the number of employees. In case of sole proprietors the number of persons occupied consists the sole proprietors and the helping family members as well. If a registered sole proprietor has only number of employees data, they are transformed to number of persons occupied data by adding 1. If in case of the companies and partnerships only the number of employees data are available they are currently not transformed.

In case of active enterprises, in line with the methodological recommendations of Eurostat, the way to determine the number of persons employed has been changed from 2007 onwards. According to the recommendation of Eurostat, an enterprise that carries on an economic activity have to have at least 1 employee, therefore, in case of all enterprises with a staff of 0, the staff is increased by 1.

The grouping of business units by legal form (abbreviation: GFO) is based on the classification in force from 15 March 2014. The classification of business units by legal form was published in Regulation 21/2012. (16 April) KIM on the elements and nomenclatures of the statistical code.

Source of data: for registered and active enterprises is the Business Register (BR) of the Hungarian Central Statistical Office. In the case of Business Demography the data the BR are completed with the information of different statistical data collections and with administrative sources (e.g. Tax and Financial Control Administration).

Annual performances and expenses of enterprises

(Description of the methodology of Structural Business Statistics (SBS) by size-class and of SME Statistics)

Reference population: market producers of Nace sections A–J, L–N, P, Q, R, S

Legal forms involved in the observation

1 enterprise with legal entity

2 enterprises without legal entity

7 other business organisations

In addition, from 2015 onwards, the data of nonprofit business associations employing 3 or more persons in sections E, P and Q and of those employing 50 or more persons in sections A–D, F–J, L–N, R and S are included in this survey. In 2015, the weight of nonprofit business associations within the entire population was as follows: number of organisations: 0.1%; turnover and value added at factor cost: both 0.3% and the number of persons employed: 2.7%.

The reference population covers the active enterprises defined in Commission Regulation (EC) No 250/2009.

The purpose of the Quarterly Performance Statistics is to provide short-term indicators to show the development of the market for services. The data are needed on the one hand by the Hungarian users, first of all for the calculation of quarterly GDP. On the other hand regular data transmission are carried out for Eurostat.
– All enterprises are observed if the number of persons employed is greater than 49. They have to fill the "2236 Agriculture, Service and Trade" questionnaire in.
– For enterprises employing between 5 and 49 persons the data collection is based on representative sample survey.

According to the Eurostat regulation the time series are adjusted as well, netting out the seasonality and the calendar effect. Since the January 2002 the time series adjustment has been carried out with TRAMO/SEATS method using DEMETRA software. Currently JDEMETRA+ 2.2.0 is used.

To specify the appropriate categories of SME (micro-, small- and medium sized enterprises and non-SME-s) the criteria referring to the number of persons employed, the financial ceilings (value of turnover and balance sheet total) and the status (autonomous, partner or linked status according to the consolidated amounts of the enterprise(s)) are taken into consideration based on the authorization granted by the Act XXXIV. of 2004 on Small and Medium sized Enterprises and Commission Regulation (EC) 2003/361.
 

Definitions:

Turnover: comprises the totals invoiced by the observation unit during the reference period, and this corresponds to market sales of goods or services supplied to third parties. The sales of goods include the goods produced by the enterprise as well as the merchandise purchased by a retailer. The rendering of services typically involves the performance by the legal unit of a contractually agreed task over an agreed period of time.

Value added at factor cost: is the gross income from operating activities after adjusting for operating subsidies and indirect taxes.

It can be calculated from turnover, plus capitalised production, plus other operating income (including operating subsidies), plus or minus the changes in stocks, minus the purchases of goods and services, minus other taxes on products which are linked to turnover but not deductible, minus the duties and taxes linked to production. The duties and taxes linked to production are compulsory, unrequited payments, in cash or in kind which are levied by general government, or by the Institutions of the European Union, in respect of the production and importation of goods and services, the employment of labour, the ownership or use of land, buildings or other assets used in production irrespective of the quantity or the value of goods and services produced or sold. Alternatively it can be calculated from gross operating surplus by adding personnel costs.

The data is different from the GDP data of National Accounts as it based on the Commission Regulation (EC) No 250/2009.

Number of persons employed: is defined as the total number of persons who work in the observation unit (inclusive of working proprietors, partners working regularly in the unit and unpaid family workers working regularly in the unit), as well as persons who work outside the unit who belong to it and are paid by it (e.g. sales representatives, delivery personnel, repair and maintenance teams). It includes persons absent for a short period (e.g. sick leave, paid leave or special leave), and also those on strike, but not those absent for an indefinite period. It also includes part-time workers who are regarded as such under the laws of the country concerned and who are on the pay-roll, as well as seasonal workers, apprentices and home workers on the pay-roll.

The number of persons employed excludes manpower supplied to the unit by other enterprises, persons carrying out repair and maintenance work in the enquiry unit on behalf of other enterprises, as well as those on compulsory military service.

Unpaid family workers refer to persons who live with the proprietor of the unit and work regularly for the unit, but do not have a contract of service and do not receive a fixed sum for the work they perform. This is limited to those persons who are not included on the payroll of another unit as their principal occupation.

Nonprofit organization

Nonprofit organization: according to the international definition an organization must fundamentally comply with five criteria to be unambiguously classified as nonprofit:

 1.institutionalization (separate legal personality);
 2.organizational independence from the government sector;
 3.public orientation;
 4.prohibiting dividend payments (or profit sharing);
 5.voluntariness, autonomy.

Political parties or similar organizations are excluded.

Organization features: nonprofit organizations – by their features – may be classified into three types.

 1.Classical civic organizations: private foundations, associations
 2.Interest representation organizations: public bodies (boards), trade unions, professional employer interest representations, professional associations;
 3.Other nonprofit organizations: public foundations, public benefit companies.

Calculated number of full-time employees: full-time (main job holder) employees plus the half of part-time (main job holder) employees and one tenth of non-main job holder employees. This indicator translates different employment types (full-time, part time employees) into full time employee units.

Calculated number of contract employees: a ratio of contracted and paid annual assignment fees to calculated full time employee average salary paid in the nonprofit sector. This calculated indicator expresses outsourcing (assignment contracts) related labour savings by replaced full time positions.

Calculated number of volunteer employees (CNVE): ratio of estimated annual volunteer working hours to annual working hours associated with a full time employee. Estimated wage saving: multiplying CNVE with the annual average wage paid for a calculated full time employee in the nonprofit sector. These calculated values express – through replaced full time positions and wage amounts – volunteering related labour substitution.

 

 

Activity of foreign affiliates (FATS)

Foreign AffiliaTes Statistics (FATS) are intended to measure the effects and extent of ultimate foreign control over economic branches in a particular country. Inward FATS observe companies conducting business in Hungary under foreign control, while Outward FATS include data on companies operating abroad and controlled by Hungarian entities. FATS facilitate the comparison of the management and efficiency of Hungarian and foreign-owned affiliates. Foreign-controlled companies are to be classified according to the country of the ultimate controlling institutional unit.

Inward FATS statistics contain the number of enterprises as well as indicators of performance, investment, employment and R&D. Outward FATS comprise the number of enterprises and indicators of performance and employment.

For the compilation of inward FATS data activity and geographical breakdowns are used, based on the regulation on NACE Rev.2 and the regulation of the European Council on statistics of foreign affiliates. The basis of the geographical breakdown is the country register, the usage of which is regulated by Direction No. 2/1997 (SK 1.) of the President of the Hungarian Central Statistical Office (HCSO).

The compilation of inward FATS statistics is mainly based on secondary data processing. There are two ways to define foreign ownership. For large enterprises the 'Annual report on capital investment' (questionnaire No. 2168 in OSAP (National Programme for Statistical Data Collection)) is used, issued by the Central Bank of Hungary, while in the case of the others we use tax returns.

We take over the values of data from statistics on the annual performances of enterprises, investment statistics (annual integrated business statistics, 9 OSAP questionnaires and R&D statistics (OSAP questionnaire No. 1074).

The country codes of enterprises having ultimate control over resident affiliates are available in different ways. First we take the information from the EuroGroup Register (EGR) or we collect them through the annual integrated business statistics questionnaires. We either search the missing data on the internet, or for the small enterprises we impute them by mathematical methodology.

We supply inward FATS data to Eurostat and OECD yearly. Eurostat publishes our data on its website.

Eurostat tenders helped our preparations for the obligatory data transmission (from reference year 2007). In the frame of a PHARE project we compiled our first test data of inward FATS for reference years 2003, respectively. Since then we have had inward FATS data every year.

We have compiled inward FATS data from already existing data sources. The only exceptions were the country codes of enterprises having ultimate control on a resident affiliate, which we searched for the data on internet. We could not find for the country codes of the whole population, so till 2006 the coverage is not 100%.

We used two voluntary surveys (OSAP questionnaires No. 2147 and 2148) for reference years 2004 and 2005 to collect outward FATS data, which had a response rate of 50%. From the reference year 2007 the National Bank of Hungary collets the data by the questionnaire "Annual direct investments".

 

 

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