NACE: Statistical Classification of Economic Activities in the European Community

Current Version: NACE Rev. 2.1

NACE Rev. 2.1 was adopted by the European Commission in October 2022. It is expected to be applied by the statistical offices of all EU member countries from 1 January 2025.

Changes between NACE Rev. 2 and NACE Rev. 2.1

NACE Rev. 2.1 maintained the structure of NACE Rev. 2 while expanding in detail with the addition of 36 new classes. Some prominent changes are as follows:

• In section C (Manufacturing), class 16.29 in NACE Rev. 2 was split into three new classes in NACE Rev. 2.1 which are 6.26 (Manufacture of solid fuels from vegetable biomass), 16.27 (Finishing of wooden products), and 16.28 (Manufacture of other products of wood and articles of cork, straw and plaiting materials). In a case of class merger, the NACE Rev. 2.1 class 20.59 (Manufacture of other chemical products n.e.c.) was created by combining the NACE Rev. 2.1 classes 20.51 (Manufacture of explosives), 20.52 (Manufacture of glues) and 20.53 (Manufacture of essential oils).

• Section D (Electricity, gas, steam and air conditioning supply) split the NACE Rev 2 group 35.1 (Electric power generation, transmission and distribution), into new classes: 35.11 (Production of electricity from non-renewable sources) 35.12 (Production of electricity from renewable sources) and 35.16 (Storage of electricity).

• Section G (Wholesale and retail trade; repair of motor vehicles and motorcycles) of NACE Rev. 2.1 stopped applying the distinction between online and in-store mode of delivery as a basis for industrial classification. NACE Rev. 2.1.

• Section J of NACE Rev. 2 was split into two new sections in NACE Rev 2.1 which are Section J (Publishing, broadcasting, and content production and distribution activities) and Section K (Telecommunications, Computer and Information Service Activities). The new section J accounts for the fact that the activities that make up this section are usually carried out together. Due to the above-mentioned split, all other NACE Rev. 2 sections from section K onwards were moved one alphabet forward in NACE Rev. 2.1.

• In addition to the new classes highlighted above, NACE Rev 2.1 recognized the importance of intermediation services with the creation of several new groups and classes across sections. These include, for example, groups 47.9 (Intermediation service activities for retail sale) and 55.4 (Intermediation service activities for accommodation); and classes 68.31 (Intermediation service activities for real estate activities) and 85.61 (Intermediation service activities for courses and tutors).

Structure of NACE Rev. 2.1

NACE Rev 2.1 is hierarchically structured into four levels of aggregation, as follows:

• Sections: 22 sections identified by the English alphabets A to U. This is the broadest level in NACE Rev. 2.1.

• Divisions: 87 divisions identified by two-digit numbers.

• Groups: 287 groups identified by three-digit numbers.

• Classes: 651 classes identified by four-digit numbers. This is the finest level of detail in NACE Rev. 2.1.

The table below shows the number of divisions, groups, and classes in each of the 22 sections of NACE Rev. 2.1.

Previous versions

NACE Rev. 2

NACE Rev. 2 was adopted by the European Commission in December 2006 and became effective across EU member countries from 1 January 2008.

Changes between NACE Rev.1 and NACE Rev. 2

NACE Rev. 2 was a major review of NACE Rev. 1. It was a European adaptation of ISIC Rev. 4, the development of which Eurostat and EU Member States were heavily involved in. The transition from NACE Rev. 1.1 (a minor update of NACE Rev. 1 introduced in 2002) to NACE Rev. 2 reflected significant economic and technological changes in Europe and the world. Focusing on the broad section level, prominent developments were as follows:

• A new section A (Agriculture, forestry and fishing) was created from the combination of the NACE Rev. 1.1 sections A (Agriculture, hunting and forestry) and B (Fishing). The new section also provided much more detail than was previously available.

• A new section E (Water supply; sewerage, waste management and remediation activities) was created in NACE Rev. 2 by combining three sanitation-related divisions from NACE Rev 1.1. The detail on these activities were also expanded.

• A new section J (Information and communication) was created in NACE Rev. 2, for activities involving production and distribution of information and cultural products, information technology and data processing activities. The specific components of this new section were derived from different sections of NACE Rev. 1.1 resulting in much reduced comparability between both versions.

• New sections L (Real estate activities), M (Professional, scientific and technical activities), and N (Administrative and support service activities) were created in NACE Rev. 2 from the NACE Rev 1.1 section K (Real estate, renting and business activities).

• Many activities of NACE Rev. 1.1 section O (Other community, social and personal service activities) were relocated to NACE Rev. 2 sections E and J, as described above. Others were moved to two new sections, R (Arts, entertainment and recreation), and S (Other service activities).

Structure of NACE Rev. 2

NACE Rev. 2 was hierarchically structured into four levels of aggregation, as follows:

• Sections: 21 sections identified by the English alphabets A to U. This is the broadest level in NACE Rev. 2.

• Divisions: 88 divisions identified by two-digit numbers.

• Groups: 272 groups identified by three-digit numbers.

• Classes: 615 classes identified by four-digit numbers. This is the finest level of detail in NACE Rev. 2.

NACE Rev. 1

NACE Rev. 1 was adopted by the European Commission in October 1990 and became effective across EC member countries from 1 January 1993. A minor update to NACE Rev. 1 called NACE Rev 1.1 was released in 2002. The NACE system originated in the 1970s when the European Community (now known as the European Union) recognized the need for a standardized classification system to facilitate the comparison and analysis of economic data across member states. NACE Rev. 0, inspired by similar systems in use at the time (notably the ISIC), was published in 1970 but had no legal authority and was not uniformly applied. NACE Rev. 1 is therefore recognized as the first fully harmonized EU-wide classification system. The NACE classification was based on statistical principles designed to ensure that economic activities were categorized systematically and consistently across sectors, countries, and over time.

Structure of NACE Rev. 1

NACE Rev. 1 was hierarchically structured into four or five levels of aggregation, as follows:

• Sections: 17 sections identified by the English alphabets A to Q. This was the broadest level in NACE Rev. 1. Two sections were further subdivided into a total of 32 subsections represented by two alphabets.

• Divisions: 60 divisions identified by two-digit numbers.

• Groups: 222 groups identified by three-digit numbers.

• Classes: 503 classes identified by four-digit numbers. This is the finest level of detail in NACE Rev. 1.

Where is it used?

The NACE classification system is widely used across various sectors and applications within the European Union and beyond. Key areas include:

• Economic analysis: NACE is primarily used for collecting, analyzing, and presenting statistical data related to economic activities in EU member states. This includes national accounts, employment statistics, industrial production, and other economic indicators. Eurostat's Structural Business Statistics (SBS) database, for example, provides data on the "Business Economy" which it currently defines as sections B-N, P-R and divisions 95 and 96 of NACE Rev. 2.

• Tax rates and incentives: Some countries use NACE codes for tax administration. In Romania, for example, the 2024 corporate tax rate increased for businesses whose economic activities fall under certain NACE codes. In Greece, being active in certain NACE codes was a factor for enterprises' eligibility for certain government grants.

• Regulation and compliance: NACE codes are often used in EU regulations to define the scope of certain policies and compliance with specific standards. For example, under the new EU Taxonomy Regulation, NACE codes are used to define environmentally sustainable economic activities.

Upcoming versions

Going by the release dates of previous versions, NACE has a roughly 15-year review cycle. With NACE Rev. 2.1 taking effect in 2025, another major review of NACE can be expected by 2040. However minor updates could come much sooner.

Further resources

Download NACE

• NACE Rev. 2.1 (Current version) - Manual

• NACE Rev. 2 - Manual

• NACE Rev. 1.1 - Manual

• NACE Rev. 1 - Manual

Other resources

• Deloitte. R&D and Government Incentives New ESPA 2014–2020 funding programs available.

• European Commission. NACE Implementation.

• PWC. Introduction to EU Taxonomy reporting.

• PWC. Romania: Significant developments.