# IMMC.COM%282020%29424%20final.ENG.xhtml.1_EN_ACT_part1_v2.docx

european flagEUROPEAN COMMISSION

Brussels, 6.7.2020

COM(2020) 424 final

DRAFT AMENDING BUDGET No 7TO THE GENERAL BUDGET 2020

Update of revenue (own resources)

Having regard to:

–the Treaty on the Functioning of the European Union, and in particular Article 314 thereof, in conjunction with the Treaty establishing the European Atomic Energy Community, and in particular Article 106a thereof,

–Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union (...)
  1
  , and in particular Article 44 thereof,

–the general budget of the European Union for the financial year 2020, as adopted on 27 November 2019
  2
  ,

–amending budget No°1/2020
  3
  , adopted on 17 April 2020,

–amending budget No°2/2020
  4
  , adopted on 17 April 2020,

–amending budget No°3/2020
  5
  , adopted on 17 June 2020,

–amending budget No°4/2020
  6
  , adopted on 17 June 2020,

–draft amending budget No°5/2020
  7
  , adopted on 3 June 2020,

–draft amending budget No 6/2020
  8
  , adopted on 3 June 2020,

The European Commission hereby presents to the European Parliament and to the Council Draft Amending Budget No°7/2020 to the 2020 budget.

CHANGES TO THE STATEMENT OF REVENUE AND EXPENDITURE BY SECTION

The changes to the general statement of revenue and in section III are available on EUR-Lex (

  https://eur-lex.europa.eu/budget/www/index-en.htm

  ).

TABLE OF CONTENTS

1.
     Introduction

2.
     Update of revenue

2.1
     Overall impact of DAB 7/2020 on the distribution of total own resources payments between Member States

2.2
     Revision of the forecast of TOR, VAT and GNI bases

2.3
     2015, 2016, 2017, 2018 and 2019 UK correction

2.3.1
     Introduction

2.3.2
     Calculation of the corrections

2.3.3
     Entry in DAB 7/2020 of the 1st update of the 2019 UK correction, 2nd update of the 2018 UK correction, 3rd update of the 2017 UK correction, definitive amounts of the 2016 ans 2015 UK corrections

2.4
     Exchange rate differences in own resources

2.5
     Fines and penalty payments

EXPLANATORY MEMORANDUM

1.Introduction

The purpose of Draft Amending Budget (DAB) No 7 for the year 2020 is to update the revenue side of the budget to take account of the latest developments:

–to revise the forecast of Traditional Own Resources (i.e. customs duties), value-added tax (VAT) and gross national income (GNI) bases, and to budget the relevant UK corrections and their financing, which all affect the distribution of own resources contributions from Member States to the EU budget.

–to update other revenue such as fines and exchange rate differences.

2.
     Update of revenue

2.1
     Overall impact of DAB 7/2020 on the distribution of total own resources payments between Member States

Following the 178th meeting of the Advisory Committee on Own Resources (ACOR), which was held by written procedure from 19-25 May 2020, two types of adjustments of the revenue side of the budget are required:

–an update of the estimates for Traditional Own Resources (TOR) as well as for the own resources based on the Value Added Tax (VAT) and Gross National Income (GNI) to take account of more recent economic forecasts, and

–an update of the UK correction.

These adjustments are presented in sections 2.2 and 2.3 below.

Moreover, the other revenue are updated to take into account finally cashed fines and penalty payments until June 2020 and also the negative exchange rate differences (see sections 2.5 and 2.4 below).

The overall impact of all the revenue adjustments of this DAB is shown in the summary table below. This table also shows the distribution of total own resources payments between Member States: as budgeted in the 2020 budget, as amended in Draft Amending Budget N°6 (DAB 6/2020)
  9
  , and finally in the present DAB.

Distribution of total own resources payments by Member States (in million EUR)

| | Budget 2020 | DAB 6/2020 | DAB 7/2020 |
| --- | --- | --- | --- |
| | (1) | (2) | (3) |
| BE | 6 313,9 | 6 499,9 | 6 332,3 |
| BG | 641,7 | 665,6 | 659,8 |
| CZ | 2 135,7 | 2 218,8 | 2 290,7 |
| DK | 2 904,5 | 3 029,7 | 3 118,1 |
| DE | 31 032,1 | 32 448,8 | 32 955,7 |
| EE | 277,4 | 288,2 | 302,2 |
| IE | 2 599,7 | 2 706,9 | 2 652,8 |
| EL | 1 825,0 | 1 901,0 | 1 905,6 |
| ES | 12 649,7 | 13 149,6 | 12 577,5 |
| FR | 23 283,6 | 24 261,5 | 24 654,5 |
| HR | 515,6 | 536,8 | 531,2 |
| IT | 17 239,5 | 17 946,0 | 17 751,0 |
| CY | 216,0 | 224,5 | 226,6 |
| LV | 318,9 | 331,5 | 319,3 |
| LT | 512,4 | 531,0 | 525,5 |
| LU | 397,7 | 414,8 | 452,3 |
| HU | 1 429,0 | 1 484,4 | 1 498,4 |
| MT | 128,9 | 134,0 | 131,4 |
| NL | 8 025,0 | 8 344,8 | 8 249,6 |
| AT | 3 536,8 | 3 696,0 | 3 789,0 |
| PL | 5 450,1 | 5 656,5 | 5 782,5 |
| PT | 2 011,6 | 2 092,8 | 2 171,8 |
| RO | 2 057,1 | 2 144,4 | 2 240,4 |
| SI | 522,1 | 541,7 | 526,5 |
| SK | 926,7 | 965,2 | 937,7 |
| FI | 2 245,5 | 2 341,3 | 2 421,9 |
| SE | 3 903,6 | 4 091,9 | 4 313,3 |
| UK | 18 537,9 | 18 359,7 | 17 972,3 |
| EU | 151 637,8 | 157 007,3 | 157 289,9 |

Budget 2020

DAB 6/2020

DAB 7/2020

(1)

(2)

(3)

BE

6 313,9

6 499,9

6 332,3

BG

641,7

665,6

659,8

CZ

2 135,7

2 218,8

2 290,7

DK

2 904,5

3 029,7

3 118,1

DE

31 032,1

32 448,8

32 955,7

EE

277,4

288,2

302,2

IE

2 599,7

2 706,9

2 652,8

EL

1 825,0

1 901,0

1 905,6

ES

12 649,7

13 149,6

12 577,5

FR

23 283,6

24 261,5

24 654,5

HR

515,6

536,8

531,2

IT

17 239,5

17 946,0

17 751,0

CY

216,0

224,5

226,6

LV

318,9

331,5

319,3

LT

512,4

531,0

525,5

LU

397,7

414,8

452,3

HU

1 429,0

1 484,4

1 498,4

MT

128,9

134,0

131,4

NL

8 025,0

8 344,8

8 249,6

AT

3 536,8

3 696,0

3 789,0

PL

5 450,1

5 656,5

5 782,5

PT

2 011,6

2 092,8

2 171,8

RO

2 057,1

2 144,4

2 240,4

SI

522,1

541,7

526,5

SK

926,7

965,2

937,7

FI

2 245,5

2 341,3

2 421,9

SE

3 903,6

4 091,9

4 313,3

UK

18 537,9

18 359,7

17 972,3

EU

151 637,8

157 007,3

157 289,9

2.2
     Revision of the forecast of TOR, VAT and GNI bases

According to established practice, the Commission proposes to revise the financing of the budget on the basis of more recent economic forecasts
  10
  , agreed with the Member States in the ACOR forecast procedure.

The revision concerns the forecast of TOR to be paid to the budget in 2020 as well as the forecast of the 2020 VAT and GNI bases. The forecast in the 2020 Budget was established at the 175th ACOR meeting on 24 May 2019. The revision in the present DAB takes into account the agreed forecasts of the 178th ACOR meeting held by written procedure from 19-25 May 2020. The use of an updated forecast of own resources improves the accuracy of the revenue forecasts and hence of the payments that Member States are asked to make to the EU budget during the budgetary year.

The ACOR projections of VAT and GNI bases are usually determined as a compromise between the Commission’s forecast and the Member State’s forecasts. However, this year all Member States accepted the Commission’s proposal to use its own forecasts for the VAT and GNI bases for 2020 to ensure equal treatment across Member States. The Commission spring 2020 economic forecast provides a horizontally consistent approach, based on a consistent set of data, methodology and assumptions for all Member States, which appears particularly important in the exceptional situation of the Covid-19 pandemic.

The pandemic has drastically changed the outlook for the European economy. The Commission spring 2020 forecast expects the EU economy to contract by a record 7.5 % this year, followed by a rebound of 6.1 % in 2021 – not enough to fully make up for this year’s loss. At the end of the forecast horizon, the EU economy would be about 3 % lower than the output level projected by the autumn forecast 2019. The pandemic will affect all demand components except government consumption and public investment, which play a stabilising role. International trade is expected to collapse unprecedentedly and the rebound next year to remain limited due to disruptions in global value chains.

The worsening economic situation is reflected in the own resources forecast for 2020. Therefore, as compared to the forecast agreed in May 2019, the forecast for 2020 has been revised as follows:

–Total 2020 net customs duties are now forecast at EUR 18 507,3 million (after deduction of 20 % collection costs), which represents a decrease of 16,47 % relative to the forecast of EUR 22 156,9 million included in the Budget 2020. The Commission compared the results of the traditional ACOR forecasting method (based on the Commission Spring 2020 economic forecast) with the results of the extrapolation method based on the latest outturn data for collected customs duties (January – April 2020). As in the past years, it was agreed to apply a conservative approach ensuring sound budget management in a context of high economic uncertainties and potential disruptions in trade patterns. The traditional forecast method, which takes into account possible effects of the pandemic on trade, provides the lowest TOR revenue. Therefore, it was agreed to use it for the revision of the 2020 TOR forecast.

–The total 2020 EU uncapped VAT base is now forecast at EUR 6 764 185,3 million, which represents a decrease of 8,30 % compared to the May 2019 forecast of EUR 7 376 556,2 million. The total 2020 EU capped VAT base
  11
  is forecast at EUR 6 727 739,2 million, which represents a decrease of 8,43 % compared to the May 2019 forecast of EUR 7 347 133,9 million.

–The total 2020 EU GNI base is forecast at EUR 15 480 146,9 million, which is a decrease of 8,88 % compared to the May 2019 forecast of EUR 16 988 025,0 million.

The exchange rates of 31 December 2019 have been used for converting the forecast VAT and GNI bases in national currency into euro (for the nine Member States that are not members of the euro area). This avoids distortions, since this rate is used to convert budgeted own resources payments from euro into national currency when the amounts are called in (as stipulated in Article 10a(1) of Council Regulation No 609/2014).

The revised forecasts of TOR, uncapped VAT bases and GNI bases for 2020, as adopted at the 178th ACOR meeting held by written procedure from 19-25 May 2020, are set out in the following table:

Revised forecasts of TOR, VAT and GNI bases for 2020 (in million EUR)

| | Customs
  (80%) | Uncapped VAT bases | GNI bases | Capped
  VAT bases
  12 |
| --- | --- | --- | --- | --- |
| BE | 1 855,2 | 189 777,7 | 449 226,0 | 189 777,7 |
| BG | 77,0 | 27 165,8 | 56 874,4 | 27 165,8 |
| CZ | 257,6 | 92 345,4 | 201 610,8 | 92 345,4 |
| DK | 316,9 | 113 403,4 | 299 768,7 | 113 403,4 |
| DE | 3 682,9 | 1 379 190,9 | 3 354 899,6 | 1 379 190,9 |
| EE | 36,4 | 12 711,1 | 26 004,9 | 12 711,1 |
| IE | 239,8 | 91 612,0 | 244 502,7 | 91 612,0 |
| EL | 227,1 | 68 974,4 | 170 317,2 | 68 974,4 |
| ES | 1 145,6 | 525 701,4 | 1 139 453,3 | 525 701,4 |
| FR | 1 492,9 | 1 043 797,5 | 2 310 950,4 | 1 043 797,5 |
| HR | 29,5 | 33 212,2 | 49 035,0 | 24 517,5 |
| IT | 1 548,8 | 655 487,7 | 1 640 896,9 | 655 487,7 |
| CY | 25,0 | 15 360,0 | 19 667,9 | 9 834,0 |
| LV | 36,4 | 12 075,5 | 28 582,7 | 12 075,5 |
| LT | 90,5 | 18 210,5 | 43 691,8 | 18 210,5 |
| LU | 17,7 | 30 401,6 | 42 714,0 | 21 357,0 |
| HU | 164,9 | 57 027,0 | 133 530,3 | 57 027,0 |
| MT | 13,4 | 9 182,8 | 11 568,7 | 5 784,4 |
| NL | 2 461,7 | 309 010,0 | 752 515,8 | 309 010,0 |
| AT | 188,0 | 173 737,6 | 379 655,5 | 173 737,6 |
| PL | 734,9 | 254 114,4 | 497 588,8 | 248 794,4 |
| PT | 179,8 | 102 255,7 | 195 586,8 | 97 793,4 |
| RO | 164,9 | 81 445,0 | 210 407,0 | 81 445,0 |
| SI | 71,0 | 21 884,8 | 45 058,8 | 21 884,8 |
| SK | 74,1 | 34 104,4 | 87 990,5 | 34 104,4 |
| FI | 136,7 | 101 842,5 | 228 223,7 | 101 842,5 |
| SE | 436,1 | 204 408,8 | 466 486,2 | 204 408,8 |
| UK | 2 802,5 | 1 105 745,2 | 2 393 338,5 | 1 105 745,2 |
| EU 28 | 18 507,3 | 6 764 185,3 | 15 480 146,9 | 6 727 739,2 |

Customs
  (80%)

Uncapped VAT bases

GNI bases

Capped
  VAT bases
  12

BE

1 855,2

189 777,7

449 226,0

189 777,7

BG

77,0

27 165,8

56 874,4

27 165,8

CZ

257,6

92 345,4

201 610,8

92 345,4

DK

316,9

113 403,4

299 768,7

113 403,4

DE

3 682,9

1 379 190,9

3 354 899,6

1 379 190,9

EE

36,4

12 711,1

26 004,9

12 711,1

IE

239,8

91 612,0

244 502,7

91 612,0

EL

227,1

68 974,4

170 317,2

68 974,4

ES

1 145,6

525 701,4

1 139 453,3

525 701,4

FR

1 492,9

1 043 797,5

2 310 950,4

1 043 797,5

HR

29,5

33 212,2

49 035,0

24 517,5

IT

1 548,8

655 487,7

1 640 896,9

655 487,7

CY

25,0

15 360,0

19 667,9

9 834,0

LV

36,4

12 075,5

28 582,7

12 075,5

LT

90,5

18 210,5

43 691,8

18 210,5

LU

17,7

30 401,6

42 714,0

21 357,0

HU

164,9

57 027,0

133 530,3

57 027,0

MT

13,4

9 182,8

11 568,7

5 784,4

NL

2 461,7

309 010,0

752 515,8

309 010,0

AT

188,0

173 737,6

379 655,5

173 737,6

PL

734,9

254 114,4

497 588,8

248 794,4

PT

179,8

102 255,7

195 586,8

97 793,4

RO

164,9

81 445,0

210 407,0

81 445,0

SI

71,0

21 884,8

45 058,8

21 884,8

SK

74,1

34 104,4

87 990,5

34 104,4

FI

136,7

101 842,5

228 223,7

101 842,5

SE

436,1

204 408,8

466 486,2

204 408,8

UK

2 802,5

1 105 745,2

2 393 338,5

1 105 745,2

EU 28

18 507,3

6 764 185,3

15 480 146,9

6 727 739,2

2.3
     2015, 2016, 2017, 2018 and 2019 UK correction

2.3.1
     Introduction

The correction of budgetary imbalances in favour of the United Kingdom (UK correction), to be budgeted in the present DAB, concerns years: 2015, 2016, 2017, 2018 and 2019.

The 2015, 2016, 2017, 2018 and 2019 UK corrections are subject to the rules of Council Decision 2014/335/EU, Euratom on the system of own resources of the European Union
  13
  and its accompanying working document, the 2014 Calculation Method
  14
  . Pursuant to the rules of this Decision, the net TOR “windfall gains” of the UK resulting from the increase since 2001 in the percentage of TOR retained by Member States as a compensation for their collection costs are neutralised and the allocated expenditure is adjusted by the total allocated expenditure in Member States that have acceded to the EU after 30 April 2004, except for agricultural direct payments and market-related expenditure as well as the part of the rural development expenditure originating from the EAGGF, Guarantee section.

Furthermore, the share of Austria, Germany, the Netherlands and Sweden in the financing of the UK correction is reduced to one fourth of their normal share. The reduction is financed by the other Member States, excluding the UK.

In the present DAB, the calculation and financing of the 1st update of the 2019 UK correction, 2nd update of the 2018 UK correction, 3rd update of the 2017 UK correction and the definitive amounts of the 2015 and 2016 UK corrections are entered.

The difference between the definitive amount of the 2015 and 2016 UK correction and the amounts previously budgeted (the 1st update of 2015 UK correction entered in AB 5/2016 and 1st update of 2016 UK correction entered in AB 6/2017) is entered in chapter 35 (Result of the definitive calculation of the financing of the correction of budgetary imbalances for the United Kingdom) of the present DAB.

The difference between the 3rd update of the 2017 UK correction and the amount previously budgeted (the 1st update entered in AB 6/2018) and the difference between the 2nd update of the 2018 UK correction and the amount previously budgeted (the provisional amount entered in Budget 2019) are entered in chapter 36 of the present DAB.

The 1st update amount of the 2019 UK correction is entered in chapter 15 (Correction of budgetary imbalances) of the present DAB, replacing the previously budgeted provisional amount.

2.3.2
     Calculation of the corrections

The update of the corrections for 2015, 2016, 2017, 2018 and 2019 stems mainly from the update of the VAT and GNI bases as communicated by Member States in autumn 2019. In addition the update of the correction for 2018 and 2019 also takes into account the allocated expenditure of 2018 and 2019 respectively.

The following table summarises the updates of the 2015-2019 corrections included in this draft amending budget.

2.3.2.1
     2019 UK correction

The following table summarises the changes between the provisional amount of the 2019 UK correction entered in the Budget 2020 and the 1st update of the 2019 UK correction to be entered in the present DAB.

| | 2019 UK correction | 2019 UK correction


  PROVISIONAL


  Budget 2020 | 2019 UK correction


  1st UPDATE


  DAB 7/2020 | Difference |
| --- | --- | --- | --- | --- |
| | | (1) | (2) | (2)-(1) |
| (1) | UK share of uncapped VAT base | 16,3037% | 16,0617% | - 0,2420% |
| (2) | UK share of enlargement-adjusted total allocated expenditure | 7,3015% | 7,6186% | + 0,3171% |
| (3) | = (1) - (2) | 9,0022% | 8,4431% | - 0,5591% |
| (4) | Total allocated expenditure | 130 008 765 143 | 133 761 974 693 | + 3.753.209.550 |
| (5) | Enlargement-related expenditure
  = (5a) + (5b) | 30 694 725 929 | 33 495 190 550 | + 2.800.464.621 |
| (5a) | Pre-accession expenditure | 0 | 0 | 0 |
| (5b) | Expenditure related to Art 4(1)(g) | 30 694 725 929 | 33 495 190 550 | + 2.800.464.621 |
| (6) | Enlargement-adjusted total allocated expenditure = (4) - (5) | 99 314 039 214 | 100 266 784 143 | + 952.744.929 |
| (7) | UK correction original amount = (3) x (6) x 0.66 | 5 900 699 546 | 5 587 332 443 | - 313.367.103 |
| (8) | UK advantage | 690 825 371 | 459 372 003 | - 231.453.368 |
| (9) | Core UK correction = (7) - (8) | 5 209 874 175 | 5 127 960 440 | - 81.913.735 |
| (10) | TOR windfall gains | - 44 494 806 | - 42 372 235 | + 2.122.571 |
| (11) | UK correction = (9) - (10) | 5 254 368 981 | 5 170 332 675 | - 84.036.306 |

2019 UK correction

2019 UK correction

PROVISIONAL

Budget 2020

2019 UK correction

1st UPDATE

DAB 7/2020

Difference

(1)

(2)

(2)-(1)

(1)

UK share of uncapped VAT base

16,3037%

16,0617%

- 0,2420%

(2)

UK share of enlargement-adjusted total allocated expenditure

7,3015%

7,6186%

- 0,3171%

(3)

= (1) - (2)

9,0022%

8,4431%

- 0,5591%

(4)

Total allocated expenditure

130 008 765 143

133 761 974 693

- 3.753.209.550

(5)

Enlargement-related expenditure
  = (5a) + (5b)

30 694 725 929

33 495 190 550

- 2.800.464.621

(5a)

Pre-accession expenditure

0

0

0

(5b)

Expenditure related to Art 4(1)(g)

30 694 725 929

33 495 190 550

- 2.800.464.621

(6)

Enlargement-adjusted total allocated expenditure = (4) - (5)

99 314 039 214

100 266 784 143

- 952.744.929

(7)

UK correction original amount = (3) x (6) x 0.66

5 900 699 546

5 587 332 443

- 313.367.103

(8)

UK advantage

690 825 371

459 372 003

- 231.453.368

(9)

Core UK correction = (7) - (8)

5 209 874 175

5 127 960 440

- 81.913.735

(10)

TOR windfall gains

- 44 494 806

- 42 372 235

- 2.122.571

(11)

UK correction = (9) - (10)

5 254 368 981

5 170 332 675

- 84.036.306

The 1st update of the 2019 UK correction is around EUR 84 million lower as compared to the provisional amount of the 2019 UK correction entered in the Budget 2020 due to the updates of the VAT and GNI bases as agreed by Member States in ACOR forecast written procedure (May, 2020) and the update of the allocated expenditure for 2019 (the provisional amount included the forecast of the allocated expenditure).

2.3.2.2
     2018 UK correction

The following table summarises the changes between the provisional amount of the 2018 UK correction entered in Budget 2019 and the 2nd update of the 2018 UK correction to be entered in the present DAB.

| | 2018 UK correction | 2018 UK correction


  PROVISIONAL


  Budget 2019 | 2018 UK correction


  2nd UPDATE


  DAB 7/2020 | Difference |
| --- | --- | --- | --- | --- |
| | | (1) | (2) | (2)-(1) |
| (1) | UK share of uncapped VAT base | 16,1945% | 16,0805% | - 0,1141% |
| (2) | UK share of enlargement-adjusted total allocated expenditure | 7,3577% | 6,7158% | - 0,6419% |
| (3) | = (1) - (2) | 8,8368% | 9,3646% | + 0,5278% |
| (4) | Total allocated expenditure | 127 599 039 596 | 129 720 353 887 | + 2.121.314.291 |
| (5) | Enlargement-related expenditure
  = (5a) + (5b) | 27 076 886 462 | 31 051 543 542 | + 3.974.657.080 |
| (5a) | Pre-accession expenditure | 0 | 0 | 0 |
| (5b) | Expenditure related to Art 4(1)(g) | 27 076 886 462 | 31 051 543 542 | + 3.974.657.080 |
| (6) | Enlargement-adjusted total allocated expenditure = (4) - (5) | 100 522 153 134 | 98 668 810 345 | - 1.853.342.788 |
| (7) | UK correction original amount = (3) x (6) x 0.66 | 5 862 761 188 | 6 098 379 860 | + 235.618.672 |
| (8) | UK advantage | 854 326 562 | 620 706 683 | - 233.619.879 |
| (9) | Core UK correction = (7) - (8) | 5 008 434 626 | 5 477 673 177 | + 469.238.550 |
| (10) | TOR windfall gains | - 15 094 049 | - 38 961 662 | - 23.867.613 |
| (11) | UK correction = (9) - (10) | 5 023 528 676 | 5 516 634 839 | + 493.106.163 |

2018 UK correction

2018 UK correction

PROVISIONAL

Budget 2019

2018 UK correction

2nd UPDATE

DAB 7/2020

Difference

(1)

(2)

(2)-(1)

(1)

UK share of uncapped VAT base

16,1945%

16,0805%

- 0,1141%

(2)

UK share of enlargement-adjusted total allocated expenditure

7,3577%

6,7158%

- 0,6419%

(3)

= (1) - (2)

8,8368%

9,3646%

- 0,5278%

(4)

Total allocated expenditure

127 599 039 596

129 720 353 887

- 2.121.314.291

(5)

Enlargement-related expenditure
  = (5a) + (5b)

27 076 886 462

31 051 543 542

- 3.974.657.080

(5a)

Pre-accession expenditure

0

0

0

(5b)

Expenditure related to Art 4(1)(g)

27 076 886 462

31 051 543 542

- 3.974.657.080

(6)

Enlargement-adjusted total allocated expenditure = (4) - (5)

100 522 153 134

98 668 810 345

- 1.853.342.788

(7)

UK correction original amount = (3) x (6) x 0.66

5 862 761 188

6 098 379 860

- 235.618.672

(8)

UK advantage

854 326 562

620 706 683

- 233.619.879

(9)

Core UK correction = (7) - (8)

5 008 434 626

5 477 673 177

- 469.238.550

(10)

TOR windfall gains

- 15 094 049

- 38 961 662

- 23.867.613

(11)

UK correction = (9) - (10)

5 023 528 676

5 516 634 839

- 493.106.163

The 2nd update of the 2018 UK correction is EUR 493 million higher as compared to the provisional amount of the 2018 UK correction entered in Budget 2019 due to the updates of the VAT and GNI bases as communicated by Member States in autumn 2019 and the update of the allocated expenditure for 2018 (the provisional amount included the forecast of the allocated expenditure).

3.3.2.3
     2017 UK correction

The following table summarises the changes between the 1st update of the 2017 UK correction entered in AB 6/2018 and the 3rd update of of the 2017 UK correction to be entered in the present DAB.

| | 2017 UK correction | 2017 UK correction
  1st UPDATE 

  AB 6/2018 | 2017 UK correction
  3rd UPDATE
  DAB 7/2020 | Difference |
| --- | --- | --- | --- | --- |
| (1) | UK share of uncapped VAT base | 16,2266% | 15,9063% | - 0,3203% |
| (2) | UK share of enlargement-adjusted total allocated expenditure | 7,0114% | 6,9862% | - 0,0252% |
| (3) | = (1) - (2) | 9,2152% | 8,9201% | - 0,2951% |
| (4) | Total allocated expenditure | 110 827 970 366 | 110 891 011 881 | + 63.041.515 |
| (5) | Enlargement-related expenditure
  = (5a) + (5b) | 20 962 713 989 | 20 917 337 083 | - 45.376.906 |
| (5a) | Pre-accession expenditure | 0 | 0 | 0 |
| (5b) | Expenditure related to Art 4(1)(g) | 20 962 713 989 | 20 917 337 083 | - 45.376.906 |
| (6) | Enlargement-adjusted total allocated expenditure = (4) - (5) | 89 865 256 377 | 89 973 674 798 | + 108.418.421 |
| (7) | UK correction original amount = (3) x (6) x 0.66 | 5 465 655 078 | 5 297 002 140 | - 168.652.938 |
| (8) | UK advantage | 548 929 008 | 147 663 777 | - 401.265.231 |
| (9) | Core UK correction = (7) - (8) | 4 916 726 069 | 5 149 338 362 | + 232.612.293 |
| (10) | TOR windfall gains | - 17 211 574 | - 9 019 736 | + 8.191.838 |
| (11) | UK correction = (9) - (10) | 4 933 937 643 | 5 158 358 098 | + 224.420.455 |

2017 UK correction

2017 UK correction
  1st UPDATE 

  AB 6/2018

2017 UK correction
  3rd UPDATE
  DAB 7/2020

Difference

(1)

UK share of uncapped VAT base

16,2266%

15,9063%

- 0,3203%

(2)

UK share of enlargement-adjusted total allocated expenditure

7,0114%

6,9862%

- 0,0252%

(3)

= (1) - (2)

9,2152%

8,9201%

- 0,2951%

(4)

Total allocated expenditure

110 827 970 366

110 891 011 881

- 63.041.515

(5)

Enlargement-related expenditure
  = (5a) + (5b)

20 962 713 989

20 917 337 083

- 45.376.906

(5a)

Pre-accession expenditure

0

0

0

(5b)

Expenditure related to Art 4(1)(g)

20 962 713 989

20 917 337 083

- 45.376.906

(6)

Enlargement-adjusted total allocated expenditure = (4) - (5)

89 865 256 377

89 973 674 798

- 108.418.421

(7)

UK correction original amount = (3) x (6) x 0.66

5 465 655 078

5 297 002 140

- 168.652.938

(8)

UK advantage

548 929 008

147 663 777

- 401.265.231

(9)

Core UK correction = (7) - (8)

4 916 726 069

5 149 338 362

- 232.612.293

(10)

TOR windfall gains

- 17 211 574

- 9 019 736

- 8.191.838

(11)

UK correction = (9) - (10)

4 933 937 643

5 158 358 098

- 224.420.455

The 3rd update of the 2017 UK correction is around EUR 224 million higher than the 1st  update of the 2017 UK correction entered in AB 6/2018 due to the updates of the VAT and GNI bases as communicated by Member States in autumn 2019.

2.3.2.4
     2016 UK correction

The following table summarises the changes between the 1st update of the 2016 UK correction entered in the Amending Budget 6/2017 and the definitive amount of the 2016 UK correction to be entered in the present DAB.

| | 2016 UK correction | 2016 UK correction
  1st UPDATE
  AB 6/2017 | 2016 UK correction
  DEFINITIVE
  DAB 7/2020 | Difference |
| --- | --- | --- | --- | --- |
| | | (1) | (2) | (2)-(1) |
| (1) | UK share of uncapped VAT base | 17,5900% | 17,3576% | - 0,2324% |
| (2) | UK share of enlargement-adjusted total allocated expenditure | 7,6814% | 7,6922% | + 0,0108% |
| (3) | = (1) - (2) | 9,9086% | 9,6654% | - 0,2431% |
| (4) | Total allocated expenditure | 117 477 286 403 | 117 460 512 555 | - 16.773.848 |
| (5) | Enlargement-related expenditure
  = (5a) + (5b) | 25 506 896 869 | 25 403 051 464 | - 103.845.405 |
| (5a) | Pre-accession expenditure | 0 | 0 | 0 |
| (5b) | Expenditure related to Art 4(1)(g) | 25 506 896 869 | 25 403 051 464 | - 103.845.405 |
| (6) | Enlargement-adjusted total allocated expenditure = (4) - (5) | 91 970 389 534 | 92 057 461 091 | + 87.071.558 |
| (7) | UK correction original amount = (3) x (6) x 0.66 | 6 014 542 348 | 5 872 505 812 | - 142.036.536 |
| (8) | UK advantage | 1 128 635 343 | 851 694 541 | - 276.940.802 |
| (9) | Core UK correction = (7) - (8) | 4 885 907 005 | 5 020 811 271 | + 134.904.266 |
| (10) | TOR windfall gains | - 46 683 873 | - 40 846 944 | + 5.836.929 |
| (11) | UK correction = (9) - (10) | 4 932 590 878 | 5 061 658 216 | + 129.067.338 |

2016 UK correction

2016 UK correction
  1st UPDATE
  AB 6/2017

2016 UK correction
  DEFINITIVE
  DAB 7/2020

Difference

(1)

(2)

(2)-(1)

(1)

UK share of uncapped VAT base

17,5900%

17,3576%

- 0,2324%

(2)

UK share of enlargement-adjusted total allocated expenditure

7,6814%

7,6922%

- 0,0108%

(3)

= (1) - (2)

9,9086%

9,6654%

- 0,2431%

(4)

Total allocated expenditure

117 477 286 403

117 460 512 555

- 16.773.848

(5)

Enlargement-related expenditure
  = (5a) + (5b)

25 506 896 869

25 403 051 464

- 103.845.405

(5a)

Pre-accession expenditure

0

0

0

(5b)

Expenditure related to Art 4(1)(g)

25 506 896 869

25 403 051 464

- 103.845.405

(6)

Enlargement-adjusted total allocated expenditure = (4) - (5)

91 970 389 534

92 057 461 091

- 87.071.558

(7)

UK correction original amount = (3) x (6) x 0.66

6 014 542 348

5 872 505 812

- 142.036.536

(8)

UK advantage

1 128 635 343

851 694 541

- 276.940.802

(9)

Core UK correction = (7) - (8)

4 885 907 005

5 020 811 271

- 134.904.266

(10)

TOR windfall gains

- 46 683 873

- 40 846 944

- 5.836.929

(11)

UK correction = (9) - (10)

4 932 590 878

5 061 658 216

- 129.067.338

The definitive amount of the 2016 UK correction is around EUR 129 million higher than the 1st update of the 2016 UK correction entered in the AB 6/2017 mainly due to the updates of the VAT and GNI bases as communicated by Member States in autumn 2019.

2.3.2.5
     2015 UK correction

The following table summarises the changes between the 1st update of the 2015 UK correction entered in the Amending Budget 5/2016 and the definitive amount of the 2015 UK correction to be entered in the present DAB.

| | 2015 UK correction | 2015 UK correction
  1st UPDATE
  AB 5/2016 | 2015 UK correction
  DEFINITIVE
  DAB 7/2020 | Difference |
| --- | --- | --- | --- | --- |
| | | (1) | (2) | (2)-(1) |
| (1) | UK share of uncapped VAT base | 19,2145% | 19,1419% | - 0,0726% |
| (2) | UK share of enlargement-adjusted total allocated expenditure | 7,5910% | 7,5894% | - 0,0016% |
| (3) | = (1) - (2) | 11,6235% | 11,5525% | - 0,0710% |
| (4) | Total allocated expenditure | 129 194 773 448 | 129 135 893 336 | - 58 880 112 |
| (5) | Enlargement-related expenditure
  = (5a) + (5b) | 31 733 179 803 | 31 639 878 296 | - 93 301 507 |
| (5a) | Pre-accession expenditure | 0 | 0 | 0 |
| (5b) | Expenditure related to Art 4(1)(g) | 31 733 179 803 | 31 639 878 296 | - 93 301 507 |
| (6) | Enlargement-adjusted total allocated expenditure = (4) - (5) | 97 461 593 645 | 97 496 015 040 | + 34 421 395 |
| (7) | UK correction original amount = (3) x (6) x 0.66 | 7 476 753 663 | 7 433 724 758 | - 43 028 905 |
| (8) | UK advantage | 1 496 521 393 | 1 381 345 015 | - 115 176 378 |
| (9) | Core UK correction = (7) - (8) | 5 980 232 270 | 6 052 379 743 | + 72 147 473 |
| (10) | TOR windfall gains | -76 109 576 | -74 320 246 | + 1 789 330 |
| (11) | UK correction = (9) - (10) | 6 056 341 847 | 6 126 699 989 | +70 358 142 |

2015 UK correction

2015 UK correction
  1st UPDATE
  AB 5/2016

2015 UK correction
  DEFINITIVE
  DAB 7/2020

Difference

(1)

(2)

(2)-(1)

(1)

UK share of uncapped VAT base

19,2145%

19,1419%

- 0,0726%

(2)

UK share of enlargement-adjusted total allocated expenditure

7,5910%

7,5894%

- 0,0016%

(3)

= (1) - (2)

11,6235%

11,5525%

- 0,0710%

(4)

Total allocated expenditure

129 194 773 448

129 135 893 336

- 58 880 112

(5)

Enlargement-related expenditure
  = (5a) + (5b)

31 733 179 803

31 639 878 296

- 93 301 507

(5a)

Pre-accession expenditure

0

0

0

(5b)

Expenditure related to Art 4(1)(g)

31 733 179 803

31 639 878 296

- 93 301 507

(6)

Enlargement-adjusted total allocated expenditure = (4) - (5)

97 461 593 645

97 496 015 040

- 34 421 395

(7)

UK correction original amount = (3) x (6) x 0.66

7 476 753 663

7 433 724 758

- 43 028 905

(8)

UK advantage

1 496 521 393

1 381 345 015

- 115 176 378

(9)

Core UK correction = (7) - (8)

5 980 232 270

6 052 379 743

- 72 147 473

(10)

TOR windfall gains

-76 109 576

-74 320 246

- 1 789 330

(11)

UK correction = (9) - (10)

6 056 341 847

6 126 699 989

+70 358 142

The definitive amount of the 2015 UK correction is around EUR 70 million higher than the 1st update of the 2015 UK correction entered in the AB 5/2016 mainly due to the updates of the VAT and GNI bases as communicated by Member States in autumn 2018.

2.3.3
     Entry in DAB 7/2020 of the 1st update of the 2019 UK correction, 2nd update of the 2018 UK correction, 3rd update of the 2017 UK correction, definitive amounts of the 2016 ans 2015 UK corrections

2.3.3.1
     2015 UK correction (chapter 35)

The amount of the UK correction to be budgeted in chapter 35 of the present DAB is the difference between the definitive amount of the 2015 UK correction (i.e. EUR 6 126 699 989) and the 1st update of the 2015 UK correction (i.e. EUR 6 056 341 847 entered in the AB 5/2016) amounting to EUR 70 358 142.

This amount is to be financed along the revised 2015 GNI bases as known at the end of 2018. The budgeting of this amount in chapter 35 is summarised below:

| 2015 UK correction — Chapter 35 |
| --- |
| BE | 1 267 154 | LU | 866 089 |
| BG | 3 148 896 | HU | 2 764 651 |
| CZ | 4 903 895 | MT | 310 080 |
| DK | 6 556 672 | NL | -260 138 |
| DE | 4 385 985 | AT | 1 362 429 |
| EE | 303 635 | PL | -9 542 201 |
| IE | 20 284 145 | PT | 476 355 |
| EL | 504 408 | RO | 1 609 226 |
| ES | 1 272 857 | SI | 123 083 |
| FR | 5 838 257 | SK | 1 555 233 |
| HR | 1 207 446 | FI | 4 733 265 |
| IT | 19 287 491 | SE | -2 400 255 |
| CY | 627 536 | | |
| LV | -619 579 | UK | - 70 358 142 |
| LT | -208 473 | Total | 0 |

2015 UK correction — Chapter 35

BE

1 267 154

LU

866 089

BG

3 148 896

HU

2 764 651

CZ

4 903 895

MT

310 080

DK

6 556 672

NL

-260 138

DE

4 385 985

AT

1 362 429

EE

303 635

PL

-9 542 201

IE

20 284 145

PT

476 355

EL

504 408

RO

1 609 226

ES

1 272 857

SI

123 083

FR

5 838 257

SK

1 555 233

HR

1 207 446

FI

4 733 265

IT

19 287 491

SE

-2 400 255

CY

627 536

LV

-619 579

UK

- 70 358 142

LT

-208 473

Total

0

2.3.3.2
     2016 UK correction (chapter 35)

The amount of the UK correction to be budgeted in chapter 35 of the present DAB is the difference between the definitive amount of the 2016 UK correction (i.e. EUR 5 061 658 216) and the 1st update of the 2016 UK correction (i.e. EUR 4 932 590 878 entered in the AB 6/2017) amounting to EUR 129 067 338.

This amount is to be financed along the revised 2016 GNI bases as known at the end of 2019. The budgeting of this amount in chapter 35 is summarised below:

2016 UK correction — Chapter 35

| 2016 UK correction — Chapter 35 |
| --- |
| BE | 12 381 389 | LU | -272 563 |
| BG | 1 683 717 | HU | 2 362 157 |
| CZ | 6 602 363 | MT | 310 901 |
| DK | 3 769 035 | NL | 3 455 636 |
| DE | 5 007 499 | AT | 855 227 |
| EE | 892 527 | PL | 15 053 623 |
| IE | 3 060 816 | PT | 2 825 093 |
| EL | -239 791 | RO | 5 438 400 |
| ES | 4 704 411 | SI | 821 604 |
| FR | 26 115 146 | SK | 454 399 |
| HR | 1 550 836 | FI | 3 348 353 |
| IT | 26 775 334 | SE | 128 390 |
| CY | 893 340 | | |
| LV | 185 011 | UK | - 129.067.338 |
| LT | 904 487 | Total | 0 |

BE

12 381 389

LU

-272 563

BG

1 683 717

HU

2 362 157

CZ

6 602 363

MT

310 901

DK

3 769 035

NL

3 455 636

DE

5 007 499

AT

855 227

EE

892 527

PL

15 053 623

IE

3 060 816

PT

2 825 093

EL

-239 791

RO

5 438 400

ES

4 704 411

SI

821 604

FR

26 115 146

SK

454 399

HR

1 550 836

FI

3 348 353

IT

26 775 334

SE

128 390

CY

893 340

LV

185 011

UK

- 129.067.338

LT

904 487

Total

0

2.3.3.3
     2017 UK correction (chapter 36)

The amount of the UK correction to be budgeted in chapter 36 of the present DAB is the difference between the  3rd update of the 2017 UK correction (i.e. EUR 5 158 358 098) and the 1st update of the 2017 UK correction (i.e. EUR 4 933 937 643 entered in AB 6/2018) amounting to EUR 224 420 455.

This amount is to be financed along the revised 2017 GNI bases as known at the end of 2019. The budgeting of this amount in chapter 36 is summarised below:

| 2017 UK correction — Chapter 36 |
| --- |
| BE | 15 856 715 | LU | 374 066 |
| BG | 3 231 445 | HU | 3 692 230 |
| CZ | 3 814 138 | MT | 265 690 |
| DK | 10 232 027 | NL | 4 759 697 |
| DE | 12 286 393 | AT | 1 361 203 |
| EE | 1 271 298 | PL | 5 297 081 |
| IE | 5 263 528 | PT | 6 203 836 |
| EL | 4 209 140 | RO | 5 382 461 |
| ES | 23 937 729 | SI | 765 633 |
| FR | 58 977 709 | SK | 1 500 046 |
| HR | 1 777 843 | FI | 5 572 775 |
| IT | 45 010 069 | SE | 257 162 |
| CY | 752 318 | | |
| LV | 741 095 | UK | - 224 420 455 |
| LT | 1 627 128 | Total | 0 |

2017 UK correction — Chapter 36

BE

15 856 715

LU

374 066

BG

3 231 445

HU

3 692 230

CZ

3 814 138

MT

265 690

DK

10 232 027

NL

4 759 697

DE

12 286 393

AT

1 361 203

EE

1 271 298

PL

5 297 081

IE

5 263 528

PT

6 203 836

EL

4 209 140

RO

5 382 461

ES

23 937 729

SI

765 633

FR

58 977 709

SK

1 500 046

HR

1 777 843

FI

5 572 775

IT

45 010 069

SE

257 162

CY

752 318

LV

741 095

UK

- 224 420 455

LT

1 627 128

Total

0

2.3.3.4
     2018 UK correction (chapter 36)

The amount of the UK correction to be budgeted in chapter 36 of the present DAB is the difference between the  2nd update of the 2018 UK correction (i.e. EUR 5 516 634 839) and the provisional amount of the 2018 UK correction (i.e. EUR 5 023 528 676 entered in Budget 2019)  amounting to EUR 493 106 163.

This amount is to be financed along the revised 2018 GNI bases as known at the end of 2019. The budgeting of this amount in chapter 36 is summarised below:

| 2018 UK correction — Chapter 36 |
| --- |
| BE | 27 909 738 | LU | 3 459 527 |
| BG | 5 747 148 | HU | 9 060 360 |
| CZ | 12 780 811 | MT | 599 078 |
| DK | 17 414 841 | NL | 7 666 480 |
| DE | 26 899 549 | AT | 3 225 174 |
| EE | 2 324 061 | PL | 25 585 020 |
| IE | 13 878 796 | PT | 12 696 708 |
| EL | 7 355 826 | RO | 15 373 126 |
| ES | 58 628 464 | SI | 1 888 602 |
| FR | 132 102 159 | SK | 3 559 433 |
| HR | 3 326 099 | FI | 9 899 420 |
| IT | 80 506 049 | SE | 4 981 835 |
| CY | 1 290 517 | | |
| LV | 1 428 955 | UK | -493 106 163 |
| LT | 3 518 387 | Total | 0 |

2018 UK correction — Chapter 36

BE

27 909 738

LU

3 459 527

BG

5 747 148

HU

9 060 360

CZ

12 780 811

MT

599 078

DK

17 414 841

NL

7 666 480

DE

26 899 549

AT

3 225 174

EE

2 324 061

PL

25 585 020

IE

13 878 796

PT

12 696 708

EL

7 355 826

RO

15 373 126

ES

58 628 464

SI

1 888 602

FR

132 102 159

SK

3 559 433

HR

3 326 099

FI

9 899 420

IT

80 506 049

SE

4 981 835

CY

1 290 517

LV

1 428 955

UK

-493 106 163

LT

3 518 387

Total

0

2.3.3.5
     2019 UK correction (chapter 15)

The 1st update of the 2019 UK correction corresponds to EUR 5 170 332 675 and is EUR 84 036 306 lower than the amount entered in the Budget 2020 (EUR 5 254 368 981).

This amount is to be financed along the revised 2019 GNI bases of the present DAB. The budgeting of this amount in chapter 15 is summarised below:

| 2019 UK correction – chapter 15 |
| --- |
| BE | 2 885 434 | LU | 1 141 987 |
| BG | - 44 283 | HU | 724 119 |
| CZ | 1 799 173 | MT | - 370 341 |
| DK | 555 892 | NL | - 1 400 008 |
| DE | - 4 066 249 | AT | - 186 616 |
| EE | 108 141 | PL | 2 696 724 |
| IE | - 6 718 497 | PT | 1 067 249 |
| EL | - 6 475 934 | RO | 1 113 696 |
| ES | - 31 341 060 | SI | - 945 822 |
| FR | - 14 103 043 | SK | - 2 281 186 |
| HR | - 965 383 | FI | - 330 789 |
| IT | - 26 667 365 | SE | 1 489 533 |
| CY | - 305 489 | UK | 84 036 306 |
| LV | - 956 379 | | |
| LT | - 459 810 | Total | 0 |

2019 UK correction – chapter 15

BE

2 885 434

LU

1 141 987

BG

- 44 283

HU

724 119

CZ

1 799 173

MT

- 370 341

DK

555 892

NL

- 1 400 008

DE

- 4 066 249

AT

- 186 616

EE

108 141

PL

2 696 724

IE

- 6 718 497

PT

1 067 249

EL

- 6 475 934

RO

1 113 696

ES

- 31 341 060

SI

- 945 822

FR

- 14 103 043

SK

- 2 281 186

HR

- 965 383

FI

- 330 789

IT

- 26 667 365

SE

1 489 533

CY

- 305 489

UK

84 036 306

LV

- 956 379

LT

- 459 810

Total

0

2.4
     Exchange rate differences in own resources

The EU budget is established in EURO whereas Member States' contributions are determined in national currency. The annual contributions of Member States are paid in 12 monthly instalments ("twelfths"). Each instalment made in a non-euro currency is recorded in the accounts using the monthly exchange rates of the month in which the payment is made.

For Member States outside the Eurozone the EU budget is converted into national currency using the exchange rate of the last quotation day of the calendar year preceding the budget year
  15
  . Thus for 2020, the exchange rate of 31 December 2019 is used to convert the EU budget from EURO into non-euro currencies.

Therefore any differences in the exchange rates used for calculating the monthly "twelfth" in national currency and the accounting rates applicable in the month of payment of the "twelfth" result inevitably in differences between the own resources amounts in EURO foreseen in the budget and the amount actually cashed in.

Monthly exchange rate fluctuations may cancel each other out during a budget year. However in 2020, from January to June, a total of minus EUR 400,6 million of exchange rate differences has been registered for own resources. This may well increase and poses a risk of a budgetary deficit by year end. Consequently to offset these differences and compensate for the resulting shortfall in own resources cashed in it is proposed to create a new budgetary line in Title 3 – Article 390 – Adjustements related to exchange rate differences for own resources - to enter the accrued exchange rate differences till June.

| EUR |
| --- |
| Revenue line | Name | Amount |
| 3 9 0 | Adjustment related t oexchange rate differences for own resources | -400 600 000 |
| Total | -400 600 000 |

EUR

Revenue line

Name

Amount

3 9 0

Adjustment related t oexchange rate differences for own resources

-400 600 000

Total

-400 600 000

The Commission will keep monitoring the evolution of the differences and will propose, if need be, new budgetary amendments to the Budgetary Authority to update the figure in an autumn draft amending budget.

2.5
     Fines and penalty payments

Taking into account the amounts that have been cashed, it is proposed to increase the initial forecasts introduced in the budget 2020 (EUR 100 million) by EUR 118 million. This will reduce accordingly the own resources contributions from Member States to the EU budget.

The detail by line is shown in the table below.

| EUR |
| --- |
| Revenue line | Name | Amount |
| 7 1 0 | Fines, periodic penalty payments and other penalties in connection with the implementation of the rules on competition | 85 000 000 |
| 7 1 1 | Penalty payments and lump sums imposed on a Member State for not complying with a judgment of the Court of Justice of the European Union on its failure to fulfil an obligation under the Treaty | 33 000 000 |
| Total | 118 000 000 |

EUR

Revenue line

Name

Amount

7 1 0

Fines, periodic penalty payments and other penalties in connection with the implementation of the rules on competition

85 000 000

7 1 1

Penalty payments and lump sums imposed on a Member State for not complying with a judgment of the Court of Justice of the European Union on its failure to fulfil an obligation under the Treaty

33 000 000

Total

118 000 000