Statistics New Zealand, Tatauranga Aotearoa

Introduction

The Guide to completing the Survey of International Trade in Services and Royalties is designed to help you complete the questionnaire.

The purpose of this survey is to get revenue and expense data on services and intellectual property transactions between residents and non-residents. Services are products other than tangible goods. For example, a New Zealand lawyer giving advice to a foreign client is providing a service.

An electronic version of this guide is available on the Statistics New Zealand website. Follow this link to see the guide.

If you want to talk to us about the Survey of International Trade in Services and Royalties, please call 0800 809 464 or email: bop@stats.govt.nz.

Data confidentiality and use of data

What is this data used for?

The information you provide in the Survey of International Trade in Services and Royalties questionnaire is used primarily by Statistics New Zealand to produce New Zealand’s quarterly and annual balance of payments (BoP) and international investment position (IIP) statistics. BoP and IIP statistics are a record of New Zealand’s economic transactions with the rest of the world.

The Survey of International Trade in Services and Royalties data is used to calculate New Zealand’s imports and exports of services. Results are published according to service category (for example, business services). The data is also used to produce the gross domestic product (GDP) statistics.

Confidentiality of your data

Your data will be kept confidential within Statistics NZ. Only authorised people within Statistics NZ will be allowed to see your individual information.

Statistics produced from the results of this survey are published so that no individual or business can be identified. If it is possible that an informed user could approximate an individual’s data from published results then the data is suppressed.

The information you provide can only be released if consent is granted by the companies concerned. Where the consent is not granted, the data in that particular cell, and any related cell, will be suppressed and denoted by C in the published table.

Who uses the BoP statistics?

BoP statistics are used by many different people, both in New Zealand and overseas. They include: 

• economists, financial market analysts, researchers, and academics
• the Treasury and the Reserve Bank of New Zealand
• government departments such as the Ministry of Foreign Affairs and Trade, Ministry of Economic Development, and agencies such as New Zealand Trade and Enterprise and Investment New Zealand
• international credit rating agencies
• international organisations such as the International Monetary Fund, the World Bank, Organisation of Economic Co-operation and Development, United Nations, the United Nations Conference on Trade and Development, and the World Trade Organization
• foreign embassies and consulates in New Zealand.

General instructions

Please read these basic instructions before completing the questionnaire. You can find more detailed instructions for specific sections of the questionnaire from page 10 of this guide onwards

What to report in this questionnaire

Services are products other than tangible goods. For example, a New Zealand lawyer giving advice to a foreign client is providing a service. This table provides some guidelines about what to report in the questionnaire under different service arrangements.

Report revenue and expenditure if the service or royalty was received or paid anytime during the reference quarter.

Only services sales to, and purchases from overseas should be reported in the questionnaire. Include services transactions with your overseas subsidiaries, branches, parent company, or head office. See page 8 for definitions of what is classed as a resident or non-resident and a diagram which illustrates the transactions that you should report.

Please provide information on revenue and expenditure for the New Zealand company named on the front page, and for other New Zealand companies within the company group. If you cannot provide information for other New Zealand companies within your group, then please list these companies on page 5 of the questionnaire.

For revenue, record the country to which you provided the service to, or received royalty from even where this is different to the country which was invoiced for payment. For example, if your company provided engineering consultancy services in Samoa, which were paid for by the Asian Development Bank, then the revenue should be allocated to Samoa (recipient of the service).

For expenditure, record the country which provided the service to you, or which you paid a royalty to even where this is different from the country to which payment was made.

Services that are outsourced to specialist suppliers overseas should be classified according to the type of services provided. For example, call centres that provide computer support should be included as Information Technology (IT) technical consulting and support services.

Exclude profits, interest, or dividends. Exclude the import and export of goods, except for subscriptions to newspapers or periodicals.

What information should I provide in this questionnaire?

1. Report all figures in thousands of New Zealand dollars ($NZ 000s).
2. Report transactions on a gross basis –the total value of services provided and received should be separately recorded even if settled on a net basis. All numbers should be positive, do not report negative numbers from net transactions. Report values inclusive of any withholding tax.
3. Services should be recorded on an accrual basis – transactions should be recorded when the service is performed, not when the payments are made or received. If this is difficult to determine, please record when the service was invoiced.
4. Prepayments for services transactions – if a payment is received in advance of the delivery of services do not record this prepayment in the questionnaire. Record the value when the service is performed. For example, if a payment is received this year for services to be performed next year, do not report any values in the current year.
5. Please report only in New Zealand dollars – Convert all foreign currencies into New Zealand dollars at the exchange rate applicable at the time of the transaction.
6. Reporting data when there is a combination of services and combination of goods and services – if combinations of different services or combinations of goods and services together cannot be separately identified and valued, record the whole amount to the service category that accounts for the majority of their value. Do not report amounts where goods are the major component.
7. Expenses associated with providing services – do not report the cost of any materials purchased, travel, accommodation and other expenses associated with the provision of a service.
8. If a service type is not covered by the categories listed in the questionnaire, please record it in the ‘services not previously listed’ section of the questionnaire and provide a description of the service provided. Please report revenue in the "Revenue" section and expenses in the "Expenditure" section of the questionnaire.

Key defintions

This section defines some key terms used in the questionnaire.

Resident

Any individual, business, or other organisation located in New Zealand. This includes any New Zealand-based subsidiary, branch, sales office, or other organisation of an overseas-based enterprise. New Zealand residents also include individuals who reside or are intending to reside in New Zealand for a year or more.

Non-resident

Any individual, business, or other organisation located overseas. This includes any overseas-based subsidiary, branch, sales office, etc of a New Zealand enterprise. Non-residents also include individuals who reside or are intending to reside overseas for a year or more.

The diagram below illustrates what is defined as a resident or non-resident. The parent company of the New Zealand company is a non-resident. Likewise, the subsidiary or associate of the New Zealand company is a non-resident.

The Survey of International Trade in Services and Royalties only collects information on the service transactions between residents and non-residents (between NZB, NZC, NZS1, NZS2 and OPE, OS, OA, OB, ONE).

You do not need to provide information on the following transactions in this questionnaire:

• domestic service transactions (between NZC, NZS1 and NZS2)
• transactions between two non-resident parties (between OPE, OS, OA, OB, and ONE)

Revenue and expenditure

When recording revenues earned from, and expenditure paid to non-residents:

Include:

• revenue received for services provided to non-residents, regardless of who has paid for the services. For example, include services to non-residents funded by NZAID, private, or international aid organisations
• revenue for services provided by employees of your business
• revenue from and expenditure to ALL non-residents for service and royalty transactions, including any overseas-based subsidiary, branch, and parent company of your New Zealandbased enterprise
• payments from and to non-residents made via overseas bank accounts
• services transactions conducted with non-residents over the Internet.

Exclude:

• the import and export of goods, except for subscriptions to newspapers or periodicals (report these in sections 12 and 28 of the questionnaire)
• any duties paid on exports or imports
• any packaging and handling
• profits, interest, or dividends received or paid overseas
• any transportation services (passenger or freight) or travel services (accommodation, tours, meals while travelling)
• financial leasing expense
• insurance claims or premiums
• fees paid to New Zealand resident banks by your organisation
• wages and salaries paid to your employees while they are overseas carrying out service contracts
• scholarship funding and grants made available to foreigners.

Operational lease

An operational lease is a lease where the lessor retains ownership of the machinery or equipment and is frequently responsible for maintaining, servicing, and repairing the machinery or equipment. Please provide information on operational leases on pages 18 and 32 of the questionnaire.

Financial lease

A financial lease is a lease where the lessee owns or controls of the leased machinery or equipment, and is responsible for its maintenance, servicing and repair. A financial lease is a debt arrangement where the lessee purchases the machinery or equipment over time. Financial leases are excluded from the Survey of International Trade in Services and Royalties.

Examples and illustrations

This part of the guide provides more detailed instructions of what information you should provide in specific sections of the questionnaire.

Information and Communication Technology (ICT) service

Include revenue from, or expenditure on services provided in this section if the ICT service was the main component of the service.

If ICT was used to provide another service (eg ICT was used to provide geographic information) record the amount as revenue or expenditure on the delivered service (in this example, Technical, testing, and analytical services) and not under ICT services.

Exclude royalty and licence payments to reproduce and distribute software. Please record these in the intellectual property section of the questionnaire.

Where an ICT training course is not specifically designed for a client then record this in the miscellaneous services section of the questionnaire as education services.

Please record operational leasing of computer equipment as the as rental of ICT hardware in the business services section of the questionnaire.

Financial services

Financial services are typically provided by banks, fund managers, nominee companies, custodial companies, stockbrokers, and specialised investment managers. Financial services include revenue from, or expenditure on services provided in relation to transactions of financial instruments.

Include:

• explicit charge fees. For example, a New Zealand stockbroker charges a fee to a foreign client for the trading of shares. This should be recorded as asset management revenue
• margins on buying and selling transactions. For example, buy-sell spread on foreign exchange transactions made by a non-resident bank. This should be recorded as other financial services expense
• asset management costs deducted from income receivable. For example, a foreign fund manager deducts a service fee from dividends income received on a share portfolio. This should be recorded as asset management expense.

Exclude:

• interest earned on deposits loans and debt securities
• dividend income
• insurance service
• gains and losses on the purchase and sale of securities
• non-financial advisory services provided by banks; include these as management and consultancy services
• foreign currency held in deposit accounts.

Trade and sales services

Trade and sales services include revenue from, or expenditure to non-residents related to the buying, selling, and distribution of goods and services.

Exclude revenue and expenses related to the freight and transport of goods such as shipping agent services.

Merchanting

Merchanting is when a good is purchased overseas from a non-resident and then subsequently sold to another non-resident without the good entering New Zealand. The physical form of the good is not changed during the period of ownership (from purchase to sale). For example, a New Zealand company purchases clothes from China and sells these clothes in bulk to retail stores in the United Kingdom. The purchase and sale of the good should be completed during the year.

If a good is purchased at the end of a year and not sold until the following year do not record the purchase in the current year. Please record the purchase in the year in which it is sold.

Contract manufacturing service revenue

Contract manufacturing service revenue includes the fees charged to process and transform goods which are owned by non-residents. This may include activities such as:

• processing raw materials owned by a non-resident into a final product
• assembling parts owned by a non-resident into a final product
• labelling and packaging goods owned by non-residents.

Please provide information about the costs of any materials you purchase on behalf of the nonresident and use during the manufacturing process. Refer to the illustration and example on page 14 for further explanation. If you charge overheads to the non-resident please allocate these to the appropriate service category.

Contract manufacturing service expenditure

Contract manufacturing service expenses include the fees charged by non-residents to process and transform goods overseas that you own. This may include activities such as:

• processing raw materials you own into a final product
• assembling parts you own into a final product
• labelling and packaging goods you own.

Please provide information on the costs of any materials you purchased and used during the manufacturing process. Refer to the illustration and example on page 14 for further explanation. If you are charged overheads by the non-resident manufacturer, please allocate these to the appropriate service category.

Commission agent services

Commission agent services include commission on goods and services transactions paid to commodity brokers and export agents.

Business services

Business services are those related to the day-to-day running of a company.

Accounting, tax, and auditing services – Accounting, tax, and auditing services include financial accounts that are prepared overseas, for example, by a foreign parent company. Please include the cost charged by the foreign parent company to prepare these accounts.

Include accounts and audits prepared by foreign financial accounting firms for the New Zealand branch, when the New Zealand branch is charged a fee for this service. The charges are likely to be included in the income statement as an expense of the New Zealand branch. Please report this amount in the questionnaire as an expense in the period the services take place.

Legal advice and other legal services – Legal advice and other legal services include representation in any legal proceeding, the drafting of legal documents, and legal settlement services. For example, a New Zealand firm provides legal advice to a foreign party, looking to purchase property in New Zealand. This should be recorded as legal revenue.

Exclude other services provided by law firms. For example, management services. These should be reported as Management and consultancy services.

Management fees between your organisation and any foreign parent company, subsidiary, or branch – If your organisation is wholly owned by a foreign company, it is likely that the foreign parent company will charge management fees to your company. If the exact amount is not available until annual accounts are finalised, then please provide an estimate.

Do not bundle other service charges (such as accounting and audit fees) with management fees. If you are unable to unbundle these services please report them according to the service that makes up the largest proportion of revenue or expenditure. For example, if accounting services are 90 percent of total service charges, include the amount of revenue or expenditure under accounting, tax, and auditing services.

Consultancy services – Consultancy services include revenue from, or expenditure on operational assistance, business policy, business strategy, planning, and management of a company. Exclude management fees paid to related parties. These are to be included as management fees between this organisation and any foreign parent company, subsidiary, or branch.

Exclude specialised consultancy services. These should be recorded in the appropriate service category. For example, financial consulting should be recorded as financial advisory services.

Property management revenue – Property management revenue includes fees received from foreign clients to manage real estate or property on their behalf. For example, a New Zealand company manages a residential subdivision on behalf of an Australian investor.

Property management expenditure – Property management expenditure includes fees paid to foreign companies to manage real estate or property on your behalf. For example, an Australian company manages a resort on the Gold Coast on behalf of a New Zealand investor. Other examples include fees paid to non-resident real estate and property agents to look after investment properties overseas.

Technincal and professional services

Technical, testing, and analytical services include:

• Architectural and surveying services – Drafting and design of floor plans. For example, a New Zealand company designs an apartment block for an American company.
• Testing and analytical services – Testing biological, chemical, and physical properties of products and objects. For example, a New Zealand company is contracted to provide DNA testing and analysis in Australia.

Services related to mining, and oil and gas extraction – include drilling for oil and gas, repair and dismantling services of oil rigs, mineral exploration, and mining engineering. For example, a European company is contracted to drill a test oil well in the Taranaki basin.

Construction and installation services – include the creation, renovation, or repair of buildings and other constructions such as roads, bridges, and dams. It also includes related installation and assembly work. Construction is valued on a gross basis. Include the value of all goods and services used as inputs to the work.

Exclude project revenues earned by subsidiaries established overseas to perform the project. Research and development services – include revenue from, or expenditure on basic and applied research and the experimental development of new products and processes. This may be in the fields of physical and social sciences and humanities. For example, a New Zealand laboratory conducts research into a new drug on behalf of a foreign firm.

Exclude payments and receipts for licenses to reproduce and use products created from research and development processes. Please report these as ‘royalties and license fees for the use of products created from the research and development process’ (see pages 16 and 30 of the questionnaire).

Environmental services – include revenue from, or expenditure on services that relate to the protection or restoring of the environment. Examples may include the treatment of waste, stripping of contaminated soil, cleaning up of polluted or contaminated areas and sanitation services.

Intellectual property and intangible assets

Intellectual property services include:

• charges for the use of proprietary rights – patents, trademarks, copyrights, industrial processes and designs, trade secrets, and franchises. These are charges for the right to use research and development, marketing, and other creative processes.
• charges for licenses to reproduce and/or distribute the intellectual property embodied in products or prototypes – copyrights on books and manuscripts, computer software, motion pictures, and sound recordings.

The payment of non-resident withholding tax (NRWT) on royalties to Inland Revenue indicates nonresident royalties’ payments are being made. Record the full value of the payment, inclusive of NRWT. Musical royalties includes a wide range of royalty payments/receipts generated from the musical industry.

• Performance royalties – royalties paid/received for the public performance or broadcast of musical works or sound recordings
• Mechanical royalties – royalties paid/received for the purchase of sound recordings and mechanical royalties for the reproduction of musical works
• Other royalties – royalties paid/received for the reproduction of synchronisation of musical works and sound recordings into film and television production.

Sales and purchases of emission units includes the buying and selling of carbon emission rights with non-residents. Record the value of the units, not the quantity.

Miscellaneous services

Miscellaneous services include various services not included elsewhere in the questionnaire.

Operational leasing service include leases where the lessor retains ownership of the machinery or equipment. An operational lease arrangement is common when renting large capital items. For example, a New Zealand company takes out an operational lease on an Airbus 320 to be used for passenger travel.

Education services include services relating to all levels of education whether delivered through correspondence courses, via television, satellite, or the Internet.

Please provide information about service revenues and expenses between the New Zealand parent company and overseas campuses.

Please also provide information on services provided by teachers and lecturers travelling overseas who remain employees of your company. For example, a New Zealand university lecturer travels overseas for three months to deliver a series of workshops at a university based in the USA.

Exclude services provided by campuses overseas and institutions that you own.

Exclude education services provided to non-residents temporarily studying in New Zealand.

Entertainment and recreational services

Motion picture production revenue includes receipts related to the production of foreign-owned films in New Zealand, related animations, and set design. For example, a foreign company contracts a New Zealand film studio to produce a feature-length film in New Zealand. The cost of producing the film should be distributed throughout the production cycle.

Motion picture production expenses include payments related to the production of New Zealandowned films offshore and related animations, and set design. For example, a New Zealand company contracts a foreign film studio to produce a feature length film. The cost of producing the film should be distributed throughout the production cycle.

Exclude the buying and selling of the movie once completed. This should be included as sales/purchases of other intangible assets.

Exclude royalty fees and movie distribution rights. This should be recorded as audio-visual broadcast rights.

Other audio-visual services includes revenue from, or expenditure on the production of TV and radio shows, musical recordings and fees paid to actors, directors, and producers of TV and radio shows.

Exclude royalty fees and distribution rights for TV and radio. This should be recorded as audio-visual broadcast rights.

Other cultural and recreational services include museums, libraries, sporting activities, gambling, and fees and prizes paid to athletes.

Exclude revenue received from foreign tourists in New Zealand. Exclude recreational expenses incurred while travelling overseas as a tourist.

Services not previously listed

Services not previously listed include any expense or revenue from services not listed elsewhere in the questionnaire. Please include a brief description of the service.

Exclude payments/receipts from the import and export of goods.

Country codes 

Please see the dedicated page for country codes.