3.1: “ERIC Risk and Opportunity Plan”

The legal framework for a European Research Infrastructure Consortium (ERIC) was introduced by the Council of the EU in 2009 with the aim to help research facilities safeguard scientific excellence on pan-European level, facilitate partnerships, and contribute to the development of the European Research Area. The European Spallation Source (ESS), a multi-disciplinary research facility based on the world’s most powerful neutron source, acquired the status of an ERIC on 1 October 2015. The ESS is the largest ERIC in terms of value and the very first brick-and-mortar research facility to assume this legal form. It is also the first ERIC established in Scandinavia. The fact that ESS has been awarded the ERIC status does not mean, however, that in practice all aspects relating to its implementation have been resolved. Uncertainty still remains regarding the full implementation of several provisions of the ERIC legal framework. Key unsettled issues to realise the full potential of the ERIC legal structure highlighted in this report include:

• Procurement: The ESS Procurement Rules established in 2015 provide a robust and tailored framework that facilitates an efficient procurement and purchasing activity for the Organisation. As the construction of ESS moves further ahead, the Organisation will closely monitor processes related to the procurement rules and assess whether there is a need for further revisions to better accommodate new challenges. The European Spallation Source will continue to share best practice and lessons learned, so that other ERICs can benefit from its experience.

• VAT taxation of In-Kind Contributions: As an ERIC, ESS is exempted from VAT. However, the ERIC Regulation does not provide guidance for in-kind partner institutions. The institutes face uncertainty whether VAT should be included on invoices they receive from suppliers when ordering for IKCs to deliver to ESS. While VAT issues have already affected the ESS schedule, the overall impact on the cost is not yet known. ESS is currently analysing how In-Kind Contributions, and partners, may be assessed for VAT in Sweden and how the status of InKind Contributions is viewed by Swedish tax authorities.

• International staffing profile: The international character of ESS is not only reflected by the number of countries joined in the partnership, but also by the diversity of its employee base. The European Spallation Source is a fast-growing organisation with staff coming from 50 different countries. Swedish authorities maintain a strict taxation regime for anyone working in Sweden, even for a short period of time. This in combination with the existing constraints on time-limited contracts affects the flexibility of the Organisation to attract highly-qualified personnel, collaborate with in-kind partners, and keep the operational costs at a reasonable level.

• Accounting of In-Kind Contributions: In-Kind Contributions are defined as non-cash contributions from Partner Countries to ESS, and may include technical components, R&D work, personnel made available for specific tasks during the construction phase, or other products and services relevant for the completion of the ESS facility. The Organisation still needs to determine what exactly In-Kind Contributions are in accounting terms, i.e. whether or not to treat them as investments/assets, and how to book them. The issues related to accounting of In-Kind Contributions need to be fully assessed in order to determine what accounting standards should be used by ESS.

DOI: https://doi.org/10.17199/BRIGHTNESS.D3.1