Commission Implementing Regulation (EU) 2020/1148Show full title

CHAPTER 2 HARMONISED INDEX OF CONSUMER PRICES AND HARMONISED INDEX OF CONSUMER PRICES AT CONSTANT TAX RATES

Article 3 Weights

1. Member States shall derive the sub-index and elementary aggregate weights used in the index for year t as follows:

(a) Until 31 December 2022, national accounts data for year t-2 and any available and relevant information from household budget surveys and other data sources shall be used to obtain subclass expenditure shares and divide them among the elementary aggregates of the subclass. From 1 January 2023, national accounts data for year t-2, which can be complemented with data from a recent household budget survey and other sources, shall be used to obtain subclass expenditure shares and divide them among the elementary aggregates of the subclass;

(b) The expenditure shares for year t-2 shall be reviewed and updated to make them representative of year t-1;

(c) The expenditure shares for the elementary aggregates shall be adjusted with an appropriate price change between year t-1 and December of year t-1.

2. Sub-index weights shall be kept constant throughout the calendar year.

3. The weight of an elementary aggregate shall be kept constant throughout the calendar year, unless the list of elementary aggregates within a sub-class is adjusted to reflect significant changes in the target universe.

4. The sub-index weight for any ECOICOP division, group or class shall be equal to the sum of the sub-index weights of its constituent categories. The sum of all sub-index weights at any ECOICOP level shall equal 1 000.

5. The sub-index weight for any subclass shall be equal to the sum of the weights of the elementary aggregates of that subclass.

6. The sub-index weights that relate to non-life insurance shall be derived from aggregate expenditure by households on implicit service charges.

7. Consumption expenditure financed from non-life insurance claims, including payments made directly by the insurance companies, shall be included in the sub-index weights of the relevant ECOICOP categories.

Article 4 Sampling and representativity

1. Member States shall make a target sample that is representative of the target universe by defining elementary aggregates and selecting individual products for these elementary aggregates.

2. The number of individual products and elementary aggregates shall depend on the weight of the subclass and the variance of price movements of the individual products belonging to it.

3. Member States shall ensure that the target sample remains representative of the target universe over time by conducting at least an annual review and update of the target sample, and selecting replacement products.

4. Products for which the expenditure share is at least one part per thousand shall be represented in the target sample.

Article 5 Treatment of prices

1. Member States shall use observed prices to compile the HICP. They shall use estimated prices only for the purposes laid down in Articles 9, 11 and 14.

2. Observed prices for health, education and social protection products shall be net of reimbursements.

3. Changes in the observed prices or conditions of a tariff shall be shown as price changes in the HICP.

4. If observed prices are index-linked, changes resulting from changes in the index shall be shown as price changes in the HICP.

5. If household income is a condition determining the price, changes in the observed prices resulting from changes in household income shall be shown as price changes in the HICP.

6. Observed prices for insurance shall be actual premiums.

7. If an individual product has been made available to consumers free of charge and a price is charged subsequently, this shall be shown as a price increase in the HICP. Conversely, if a price has been charged for an individual product that is subsequently made available to consumers free of charge, this shall be shown as a price decrease in the HICP.

Article 6 Discounts and inducements

1. Member States shall take account of discounts that:

(a) can be attributed to an individual product; and

(b) can be claimed at the time of purchase.

Where possible, account shall be taken of discounts that are available only to a restricted group of consumers.

2. Inducements shall be treated in accordance with Articles 10 and 11.

Article 7 Service charges proportional to transaction prices

1. The HICP shall include charges that are levied directly on consumers in exchange for the service provided and can be expressed as a flat fee or a proportion of the transaction price. If the price of a service is determined as a proportion of the transaction price, the proportion multiplied by the price of a representative unit transaction shall be used as an observed price.

2. Changes in the service charge that result from changes in the price of a representative unit transaction shall be shown as price changes in the HICP.

3. If a change in the price of a representative unit transaction cannot be measured, it shall be estimated using an appropriate price index.

Article 8 Observation of prices

1. An observed price for a good shall be included in the HICP for the month in which transactions can take place at that price.

2. An observed price for a service shall be included in the HICP for the month in which consumption of the service can commence.

3. If the price of a service depends on the time between the purchase and the commencement of the service, Member States shall take into account the prices that are representative for purchases of the service.

4. Observed prices shall refer to at least 1 working week at, or around, the middle of the month.

5. If prices for an individual product are known to be volatile within a month, the observed prices shall refer to more than 1 week.

Article 9 Estimation of prices

1. If the price of an individual product in the target sample cannot be observed, an estimated price shall be used for no longer than 2 months, after which a replacement product shall be selected. This paragraph shall not apply to seasonal products or other individual products that are expected to become available again.

2. A previously observed price shall not be used as an estimated price unless it can be justified as an appropriate estimate.

Article 10 Replacements

1. Member States shall select a replacement product that is similar to the disappearing product, while ensuring that the target sample remains representative.

2. Member States shall not select replacement products on the basis of a similar price.

Article 11 Quality adjustment

1. If there is no quality difference between a replaced product and its replacement, Member States shall compare the observed prices directly. Otherwise, Member States shall make a quality adjustment.

2. Member States shall make a quality adjustment equal to the whole price difference between the replaced product in month m-1 and its replacement in month m only if this can be justified as an appropriate estimate of the quality difference.

Article 12 Elementary price indices

1. The prices of individual products shall be aggregated to obtain elementary price indices using either of the following options:

(a) an index formula that ensures transitivity. The price index of prior periods shall not be revised when using transitive index formulae; or

(b) an index formula that ensures time reversibility and compares the prices of individual products in the current period with the prices of those products in the base period. The base period shall not be changed frequently if such change leads to significant violation of the transitivity principle.

2. An index formula that is consistent with those described in paragraph 1 shall be used to obtain a price index for an elementary aggregate from two or more elementary price indices.

Article 13 Integrating sub-indices after the index reference period

Any sub-index that is integrated into the HICP after the index reference period shall be linked to December of a particular year and used as from January of the following year.

Article 14 Seasonal products

If seasonal products are sampled in an elementary aggregate, Member States shall use the seasonal imputation method or the seasonal weights method to compile a price index for that aggregate.

Article 15 Breakdown of the flash estimate

Member States whose currency is the euro shall transmit to the Commission (Eurostat) flash estimates for all sub-indices in their HICP.

Article 16 Finalisation of provisional data

Where a Member State transmits sub-indices or their weights as provisional, it shall finalise them with the following month’s transmission.

Article 17 Revisions due to mistakes

1. Member States shall correct mistakes and transmit the revised sub-indices or sub-index weights to the Commission (Eurostat) without unjustified delay.

2. Member States shall provide the Commission (Eurostat) with information on the cause of the mistake at the latest with the transmission of the revised data.

Article 18 Other revisions

1. The timing, length and integration into the HICP of revisions other than those pursuant to Articles 16 and 17 shall be coordinated with the Commission (Eurostat).

2. Member States shall provide the Commission (Eurostat) with estimates of the revised HICP sub-indices no later than 3 months prior to the planned implementation of the proposed revision.

Article 19 Release of revisions

Except for revisions pursuant to Article 16, any revision of the all-items HICP shall be made public, together with an explanation, on the website of the national body responsible for compiling the HICP.

Article 20 Revision of sub-index weights

Without prejudice to Articles 16 and 17, sub-index weights shall not be revised.

Article 21 Harmonised index of consumer prices at constant tax rates

1. An individual tax in scope for the HICP-CT shall be taken into account if its annual revenue represents 2 % or more of the sum of all individual taxes in scope collected by general government sector.

2. The annual revenue from taxes taken into account in the HICP-CT shall cover at least 90 % of the sum of all individual taxes in scope collected by general government sector.

3. The HICP-CT shall be compiled in the same way as the HICP, except that observed prices are adjusted so that the tax rates on products are kept constant in the observation period, as compared with the price reference period.

4. Changes in tax rates shall be reflected in the HICP-CT:

(a) in the month for which the new rate is applied to the individual product and included in the observed price; or

(b) in the first entire month for which the new rate is applicable. Rate changes that enter into force on the first day of the month shall be reflected in the HICP-CT for that month. Rate changes that enter into force later that month shall be reflected in the HICP-CT for the following month.