Definition: Payments to subcontractors

Category: Structural business statistics

Payments to subcontractors are payments made by the unit to third parties in return for industrial goods and services supplied as part of a subcontracting relationship defined as follows.

Two enterprises are linked by a subcontracting relationship whenever conditions A and B are met together:

A. the customer enterprise, also said main-contractor, participates in the conception of the product providing, even partially, technical specifications to the supplier enterprise, also said subcontractor, and/or provides it with the materials to be processed;
B. the customer enterprise sells the subcontracted product, either as such or as part of a more complex product, and takes on the after-sales liability for the product.

Note: The mere stipulation of a colour, size or catalogue number does not constitute a technical specification in itself. The manufacture of a tailor-made product does not of itself necessarily imply a subcontracting relationship. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:1998:344:0049:0080:EN:PDF