Keeping track of MNEs through business group databases: The experience of Banco de Portugal

Transcription

1 Keeping track of MNEs through business group databases: The experience of Banco de Portugal Ana Bárbara Pinto Statistics Department 9th IFC Conference on Are post-crisis statistical initiatives completed? 30 th and 31 st August 2018

2 AGENDA DATA SOURCE THE BUSINESS GROUPS DATABASE BRIEF CHARACTERIZATION OF THE DATABASE RELEVANCE OF MNES

3 1. DATA SOURCE Simplified Corporate Information is the legal deposit of accounts ANNEX A: reported by non financial companies Annual data (last year available: 2016) Mandatory electronic format More than nonfinancial companies (all) More than items: Balance-sheet, income statement, statement of changes in equity, cash flow statement and the annex to the financial statements Related parties 3

4 2. THE BUSINESS GROUPS DATABASE 2.1. ARCHITECTURE AND VISUALIZATION (1) Resident Entities IDBP Tax ID LEI Name NACE UCI (2) Equity participations IDBP (Participant) IDBP (Participated) Share Capital (%) Voting Rights (%) Starting date of ownership Ending date of ownership (3) Non-resident Entities IDBP Tax ID LEI Name NACE Country UCI 4

5 2. THE BUSINESS GROUPS DATABASE 2.1. ARCHITECTURE AND VISUALIZATION (1) Resident Entities 1 All 5 IDBP Tax ID LEI Name NACE UCI (2) Equity participations (3) Non-resident Entities IDBP (Participant) IDBP IDBP (Participated) Tax ID Share Capital (%) LEI Voting Rights (%) Name Starting date of ownership NACE Ending date of ownership UCI Country Names and Tax IDs used are fictional and based in the Greek and Roman mythology

6 2. THE BUSINESS GROUPS DATABASE 2.1. ARCHITECTURE AND VISUALIZATION UCI 1: ZEUS, SA (1) Resident Entities HERA, HOLDING IDBP Tax ID LEI 90% Name NACE CENTRAL SGPS UCI POSEIDON SA 39% (2) Equity participations AFRODITE FINANCE SA IDBP (Participant) 49% IDBP UCI 2: HEFESTO IDBP (Participated) SGPS SA Tax ID LEI Share Capital (%) ARES CORP. SA 51% LOCAL COMPANY SA (3) Non-resident Entities Voting Rights (%) Starting of ARTEMISdate SA ownership Ending date of ownership 49% ATENA SA 99%Name S.DEVELOPMENT NACE SA Country HERMES SA UCI APOLO SA 1 All 6 Names and Tax IDs used are fictional and based in the Greek and Roman mythology

7 2. THE BUSINESS GROUPS DATABASE ALGORITHM - NON-RESIDENT ENTITIES The same non-resident entities is reported by different resident NFC. The algorithm compares the attributes of all non-resident entities and if 1 : Situation 1 Non-resident entities are identified by Tax payer identification number (Tax ID), Name and Country. A check digit validation only applies for national tax payer numbers. If it is not possible to unequivocally identify a non-resident entity, manual quality control will apply. Tax ID, Name and Country are equal The entity is considered the same 7 1 All Names and Tax IDs used are fictional and based in the Greek and Roman mythology

8 2. THE BUSINESS GROUPS DATABASE ALGORITHM - NON-RESIDENT ENTITIES The same non-resident entities is reported by different resident NFC. Non-resident entities are identified by Tax payer identification number (Tax ID), Name and Country. A check digit validation only applies for national tax payer numbers. The algorithm compares the attributes of all non-resident entities and if 1 : Situation 12 Country Tax ID, Name is the and same Country & Tax ID are is equal Fuzzy lookup compares the name -> the same entity when similarity > than 55%; EXAMPLE If it is not possible to unequivocally identify a non-resident entity, manual quality control will apply. Name: FLORA SA France Tax ID: Name: FLORA SA Tax ID: Are compared as FLORASAFRANCE and FLORASA and considered the same company; 1 All Names and Tax IDs used are fictional and based in the Greek and Roman mythology 8

9 2. THE BUSINESS GROUPS DATABASE ALGORITHM - NON-RESIDENT ENTITIES The same non-resident entities is reported by different resident NFC. Non-resident entities are identified by Tax payer identification number (Tax ID), Name and Country. A check digit validation only applies for national tax payer numbers. The algorithm compares the attributes of all non-resident entities and if 1 : Situation 12 Country Country Tax ID, is Name is the the same and same & Country & Tax Tax ID ID are is is different equal Fuzzy lookup compares the tax payer identification number and the name (Tax ID, Name) -> similarity > than 70%; EXAMPLE If it is not possible to unequivocally identify a non-resident entity, manual quality control will apply. Name: Ares Corp. SA Tax ID: Name: Ares SA Tax ID: AB (slightly different) Are compared as AresCorpSA and AB AresSA are considered the same company; 1 All Names and Tax IDs used are fictional and based in the Greek and Roman mythology 9

10 2. THE BUSINESS GROUPS DATABASE ALGORITHM - NON-RESIDENT ENTITIES The same non-resident entities is reported by different resident NFC. Non-resident entities are identified by Tax payer identification number (Tax ID), Name and Country. A check digit validation only applies for national tax payer numbers. The algorithm compares the attributes of all non-resident entities and if 1 : Situation 3 Country is different Similarity of (Tax ID, Name) If it is not possible to unequivocally identify a non-resident entity, manual quality control will apply. > than 70% Entities are selected for manual check < than 70% Entities are considered different 1 All Names and Tax IDs used are fictional and based in the Greek and Roman mythology 10

11 2. THE BUSINESS GROUPS DATABASE ALGORITHM - EQUITY PARTICIPATIONS The algorithm establishes the following hierarchy: The same participation reported by different resident companies Participation involving reporting entity filed as indirect Repeated participations are deleted Indirect participations where the reporting entity is identified are deleted Direct participations prevail over indirect participations Direct downward participations prevail over direct upward participations Situation 1 Situation 1: final If it is not possible to unequivocally identify a participation, manual quality control will apply. ARTEMIS SA ARTEMIS SA ARTEMIS SA 90% 90% X APOLO SA APOLO SA APOLO SA 11

12 2. THE BUSINESS GROUPS DATABASE ALGORITHM - EQUITY PARTICIPATIONS The algorithm establishes the following hierarchy: The same participation reported by different resident companies Participation involving reporting entity filed as indirect Repeated participations are deleted Indirect participations where the reporting entity is identified are deleted Direct participations prevail over indirect participations Direct downward participations prevail over direct upward participations Situation 2 If it is not possible to unequivocally identify a participation, manual quality control will apply. HERMES SA ATENA SA + = 114% 99% 15% ARES CORP. SA 12

13 2. THE BUSINESS GROUPS DATABASE ALGORITHM - UCI UCI inconsistencies - companies tend to wrongly identify themselves as UCI UCI 1: ZEUS, SA 39% The algorithm analyse the chain of voting rights higher than 50% and go up into the group structure to find out the correct UCI The UCI of the group will be the company on the top of the control chain 90% HERA, HOLDING POSEIDON SA AFRODITE FINANCE SA 49% UCI 2: HYPNOS SGPS SA 49% 99% If it is not possible to unequivocally identify a UCI, manual quality control will apply. CENTRAL SGPS 51% ARES CORP. SA ARTEMIS SA ATENA SA S.DEVELOPME NT SA HERMES SA LOCAL COMPANY SA APOLO SA All Names and Tax IDs used are fictional and based in the Greek and Roman mythology 13

14 NATIONALITY PORTUGUESE 2.3. THE IMPACT OF THE ALGORITHM AND THE MANUAL QUALITY CONTROL Number of non-resident entities in IES RESIDENT FOREIGN NON-RESIDENT RESIDENCY 14

15 NATIONALITY PORTUGUESE 2.3. THE IMPACT OF THE ALGORITHM AND THE MANUAL QUALITY CONTROL Number of non-resident entities in IES Number of participations in IES RESIDENT FOREIGN NON-RESIDENT RESIDENCY 15

16 NATIONALITY PORTUGUESE 2.3. THE IMPACT OF THE ALGORITHM AND THE MANUAL QUALITY CONTROL Number of non-resident entities in IES Number of participations in IES Number of UCIs in IES RESIDENT FOREIGN NON-RESIDENT RESIDENCY 16

17 PORTUGUESE 3. BRIEF CHARACTERIZATION OF THE DATABASE: SOME FIGURES (2016) Geographical distribution of UCI with affiliates in Portugal Geographical distribution of Portuguese controlled MNEs Between 100 and groups Between 10 and 100 groups Less than 10 groups More than entities Between and entities Between 100 and entities Between 10 and 100 entities Less than 10 entities RESIDENT FOREIGN 17 NON-RESIDENT

18 PORTUGUESE 4. RELEVANCE OF MNES (2016) Resident NFCs by type of group Number of corporations Turnover Number of employees 5% 1% 2% 37% 13% 24% 13% 14% Non-group firms RESIDENT All-resident Foreign controlled Domestically controlled FOREIGN 59% 14% NON-RESIDENT 92% 27% All-resident enterprise group Domestically controlled enterprise group Foreign controlled enterprise group Non-group firms 40% 20% 0% -20% -40% 17% 13% All-resident enterprise group Share of exports and imports in turnover 4% 3% 26% 30% 22% Domestically controlled enterprise group 37% -7% Foreign controlled enterprise group Exports/Turnover Imports/Turnover Balance 14% 3% 11% Non-group firms 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 26% 21% 25% 35% 17% 5% 13% 37% 2% All-resident enterprise group Liabilities structure 13% 2% 28% 20% 16% Domestically controlled enterprise group 17% 2% 35% 14% 28% 7% Foreign controlled enterprise group Debt securities (A) Bank loans (B) Intra-group financing ( C) Other loans (D) Trade credits Other liabilities 20% 7% 10% 0% Non-group firms (A + B + C + D) = Interestbearing debt

19 CONCLUDING REMARKS Improving the quality of business groups data Close cooperation between statistical authorities at a national and international level Establishment of an effective framework to interchange data LEI mandatory for all entities operating in international markets (used as a key to identify non-resident entities) THANK YOU FOR YOU ATTENTION Ana Bárbara Pinto Statistics Department