Merchanting

1
Merchanting
Agenda item 9

• Comments by Anne Harrison

2
Merchanting of goods

• Pass the parcel problem
• What happens when only half the transaction
  complete when the accounting period ends?

3
Solution

• Treat as negative exports on acquisition,
  positive exports on disposal
• BOP same but moves from services to goods

4
Benefits

• Goods for all countries
• Inventories sorted and hgl
• Financial accounts and balance sheets OK
• Input output OK

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6
?
7
A
B
A includes delivery in price
B collects from A
A pays C to move to B
B pays C to collect from A
8
A
B
A includes delivery in price
B collects from A
A pays C to move to B
B pays C to collect from A
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Merchanting of services

• Has the move from services to goods closed an
  option for merchanting of services?

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Example 5

• 10.145. Services, particularly business services,
  may be subcontracted, which is similar to their
  being purchased and resold. Thus, subcontracting
  is similar in some ways to merchanting of goods.
  For example, a specialist service arranger may be
  paid to provide back-office functions for a
  customer, which the service arranger subcontracts
  to another contractor. Service merchanting of
  this kind is a small but growing activity in some
  economies. The value of services exported and
  imported in the economy of the service arranger
  are recorded on a gross basis. (This treatment is
  applicable because the arranger buys and sells
  the services if the arranger acted only on a
  commission basis, then only the commission would
  be recorded as the service provided by the
  arranger.) However, if the activity is
  significant for an economy, net data could be
  provided on a supplementary basis.

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Example 6

• Might this be originals and copies?
• Might this be transfer pricing?