CSO Frontier Series outputs may use new methods which are under development and/or data sources which may be incomplete, for example new administrative data sources. Particular care must be taken when interpreting the statistics in this release.
Learn more about CSO Frontier Series outputs
One of the challenges of compiling statistics on the digital economy is gathering information on online purchases by households. Payments can be frequent and small, and may also fall outside some reporting requirements. For this publication we have developed an approach combining administrative data and several publicly available sources to improve the statistics on cross-border and domestic purchases of digital services by households.
Administrative sources
The VAT MOSS scheme (recently replaced by VAT OSS) came into operation in the EU on 1 January 2015. The scheme facilitates business providers of telecommunications, broadcasting and electronic (TBE) services to declare and pay the VAT due on these services by submission of a return via a mini-one-stop shop in the Member State where they have registered. Although companies are not obliged to use VAT MOSS for the collection of VAT on TBE services, the data collected under this scheme are a rich source of information on payments for digital services and are used by some national statistics institutions in the estimation of cross border expenditures on online services.
The estimates of gambling are based on a separate data source on the duty paid on online gambling made available to the CSO from the Revenue Commissioners.
Other estimates
A second approach, similar to a method used in the compilation of the balance of payments in Germany, is to research the provision of online services through freely available sources. We have obtained information from various articles, studies, reports from private companies and researchers. We have looked, in particular, for the provision of online services by companies not already included in the VAT MOSS data.
Benefits and limitations to the approach taken
The VAT MOSS is a reliable source that gives information on many of the smaller and some of the larger cases of online services. It is not complete as companies are not obliged to use this system.
Using publicly available data ensures that the main providers of online services are included in the estimates. This method is adaptable and allows the CSO to react to new developments. Some of the limitations are that correct country detail can be hard to establish, the method is not exhaustive and even where information is available, assumptions may need to be made.
The combined approach here attempts to give a more complete picture than either the VAT MOSS which is used by some EU states or the research method used in other countries. It was made possible by the availability of detailed VAT MOSS data for 2020 that ensured no duplication between the two sources.
Gambling services
The value of gambling services is the estimated margin between amounts wagered and winnings. Information on online gambling is available from the Revenue Commissioners with further estimates made using data from the European Gaming and Betting Association.
The Balance of Payments
The results are used in the compilation of the balance of payments statistics, which measures all economic transactions conducted between residents and non-residents over a given period. Although the online purchases of services by households comprises just 0.2% of the total imports of services to Ireland in 2020, this research makes sure that these imports are not missing from the balance of payments statistics.
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