Foreign controlled enterprises in The Netherlands

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Description topics

Financial details

Value of output

Value of output measures the quantity actually produced by the entity based on sales, changes in inventories and resales of goods and services.
Production value is defined as sales, plus or minus the changes in inventories of finished goods, work in progress and goods and services purchased for resale, minus the purchases of goods and services for resale, plus capitalized production, plus other operating income (excluding subsidies). Income and expenditure classified as financial or extraordinary in company accounts is excluded from production value.
Purchases of goods and services for resale include purchases of services purchased for resale to third parties in the same condition as received.

Value added at factor cost

Value added at factor cost refers to gross income from operating activities after adjusting for operating subsidies and indirect taxes.
Value-added at factor cost can be calculated as sales plus capitalized production, plus other operating income, plus or minus inventory changes, minus purchases of goods and services, minus other taxes on products that are linked to sales but not deductible, minus non-product taxes. Value added at factor cost can also be calculated by adding personnel costs to gross operating surplus.
Income and expenditure classified as financial or extraordinary in company accounts is excluded from value added. Value added at basic prices is calculated 'gross' because value adjustments (such as depreciation) are not subtracted.

Total purchases of goods and services

Purchases of goods and services include the value of all goods and services purchased during the accounting period for resale or consumption in the production process, excluding capital goods which is recorded as consumption for fixed capital. The goods and services purchased may be resold with or without further processing and can be used entirely in the production process or stored.
These purchases also include materials incorporated directly into the goods produced (raw materials, semi-finished products, components) and small tools and equipment other than capital goods. Also included is the value of auxiliary materials (lubricants, water, packaging materials, maintenance and repair materials, office supplies) and energy products. Purchases of materials for the production of capital goods by the entity are also included in this variable.
Services paid for during the reference period are also included whether industrial or non-industrial. Also included under this heading are payments for all work performed by third parties on behalf of the unit, including current repairs and maintenance, installation work and technical studies. However, it does not include amounts paid for the installation of capital goods and the value of capitalized goods.
Also included are payments for non-industrial services, such as fees for legal advisors and accountants, patent and license fees (if not included in fixed assets), insurance premiums, costs of meetings of shareholders and governing bodies, dues for business and professional associations, expenses for mail,telephone, electronic communications, telegraph and fax, transportation of goods and personnel, advertising costs, commissions (if not included in wages), rent, bank charges (except interest payments) and any other business services performed by third parties. Included are services transformed and capitalized by the unit.
Expenditures classified as financial or extraordinary in company accounts are excluded from the total purchases of goods and services.
Purchases of goods and services are valued at the purchase price excluding deductible VAT and other deductible taxes directly linked to turnover.
Thus, all other product-related taxes are not deducted from the value of the goods and services purchased. For the valuation of these purchases, the treatment of non-product taxes is not relevant.

Purchases of goods and services purch...

Purchases of goods and services purchased for resale in the same condition involve the purchase of goods for resale to third parties without further processing. Included is the purchase of services from companies that provide services for a fee, i.e. companies whose turnover consists not only of the fee they charge as intermediaries for a service transaction (as in the case of brokers), but also the amount involved in the service itself, such as the purchase of transport services by travel agents. The value of goods and services sold to third parties on a commission basis is not considered since these goods are not bought or sold by the Commissionaire.
When services for resale are involved here, it is the output of service activities, rights to use predetermined services or physical support of services.
Purchases of goods and services purchased for resale in their original condition are valued at the purchase price without deductible VAT and other deductible taxes directly linked to sales.
All other product-related taxes are therefore not deducted when valuing purchases of goods and services.
For the valuation of these purchases, the treatment of non-product related taxes is not relevant.