8.9.87 Official Journal of the European Communities No C 241/3 
II 
(Preparatory Acts) 
COMMISSION 
Proposal for a Council Decision on the system of the Communities' own resources 
COM(87) 420 final 
(Submitted by the Commission to the Council on 4 August 1987) 
(87/C 241/03) 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European 
Economic Community, and in particular Article 201 
thereof, 
Having regard to the Treaty establishing the European 
Atomic Energy Community, and in particular Article 173 
thereof, 
Having regard to the proposal from the Commission, 
Having regard to the opinion of the European 
Parliament, 
Having regard to the opinion of the Economic and 
Social Committee, 
Whereas the Council Decision of 7 May 1985 on the 
Communities' system of own resources (l) hereinafter 
referred to as 'the Decision of 7 May 1985', raised to 
1,4 % the limit on the rate applied to the uniform value 
added tax base previously set at 1 % by the Council 
Decision of 21 April 1970 on the replacement of 
financial contributions from Member States by the 
Communities' own resources (2), hereinafter referred to 
as 'the Decision of 21 April 1970'; whereas the 1,4 °/o 
limit is no longer sufficient to cover all Community 
expenditure; 
Whereas the Community must be provided with stable 
and guaranteed financial means to be able to operate the 
common policies, improve the present situation and 
ensure a sufficiently lengthy period of budgetary 
security; 
Whereas the signature of the Single European Act opens 
up new possibilities to the Community; whereas Article 
8A of the Treaty establishing the European Community 
provides for the completion of the internal market by 
31 December 1992; 
Whereas, on this date, the Community will have to have 
available a maximum amount of resources corresponding 
to 1,4 % of the Member States' total GNP; whereas this 
O OJNoL128, 14.5. 1985, p. 15. 
O OJ No L 94, 28. 4. 1970, p. 19. ceiling on resources must comprise the own resources 
established under this Decision and the contributions 
provided for in Council Regulation (EEC) No ... on the 
correction of budgetary imbalances; whereas the 
progression towards this ceiling must be gradual, with 
intermediate annual limits being set and used as the 
reference for each year's maximum payment appropri­
ations; 
Whereas observance of this ceiling is based on main­
tenance of a strict relationship between commitment 
appropriations and payment appropriations throughout 
the period 1988/92, with the total allocation of 
commitment appropriations being kept below 1,4 °/o of 
GNP in 1992; 
Whereas, subject to this ceiling and with a view to 
matching the resources paid by each Member State more 
closely with its ability to contribute, the composition of 
Community own resources must be enlarged and a 
greater degree of flexibility introduced; whereas it is 
necessary for this purpose: 
— to include in Community own resources the customs 
duties on products coming under the Treaty 
establishing the European Coal and Steel 
Community, 
— to fix at 1 % the rate to be applied to each Member 
State's uniform VAT base, 
— to introduce an additional type of resource to 
balance budget revenue and expenditure, the base for 
calculation being the difference between total GNP 
and the total actual VAT bases in the Member States, 
— to provide for the possibility of new resources 
connected with economic and tax harmonization in 
the Community; 
Whereas the European Council of 29 and 30 June 1987 
stipulated that final approval of this Decision should take 
place before the end of 1988 with retrospective effect 
from 1 January 1988; 
No C 241/4 Official Journal of the European Communities 8.9. 87 
Whereas provisions must be laid down to cover the 
changeover from the system introduced by the Decision 
of 7 May 1985 to that arising from this Decision, 
HAS LAID DOWN THESE PROVISIONS, WHICH IT 
RECOMMENDS TO THE MEMBER STATES FOR 
ADOPTION: 
Article 1 
The Communities shall be allocated resources of their 
own in accordance with the following Articles in order 
to ensure that their budget is in balance. 
The budget of the Communities shall, irrespective of 
other revenue, be financed entirely from the 
Communities' own resources. 
Article 2 
1. Revenue from the following shall constitute own 
resources entered in the budget of the European 
Communities: 
(a) levies, premiums, additional or compensatory 
amounts, additional amounts or factors and other 
duties established or to be established by the 
institutions of the Communities in resepct of trade 
with non-member countries within the framework of 
the common agricultural policy, and also contri­
butions and other duties provided for within the 
framework of the common organization of the 
markets in sugar; 
(b) Common Customs Tariff duties and other duties 
established or to be established by the institutions of 
the Communities in respect of trade with non-
member countries and customs duties on products 
coming under the Treaty establishing the European 
Coal and Steel Community; 
(c) the application of a rate of 1 % to the assessment 
basis for value added tax which is determined in a 
uniform manner for Member States according to 
Community rules; 
(d) the application of a rate — to be determined under 
the budgetary procedure in the light of the total of 
all other revenue — to an additional base 
representing the difference between: 
— the sum of the gross national product at market 
prices and 
— the sum of the bases referred to in point (c) of all 
member States; 
(e) any new charges introduced within the framework of 
a common policy, subject to the procedure laid down 
in Article 201 of the Treaty establishing the 
European Economic Community or in Article 173 of 
the Treaty establishing the European Atomic Energy 
Community having been followed. 2. The Council, acting unanimously on a proposal 
form the Commission and after consulting the European 
Parliament, may amend the rate fixed in point 1 (c). 
3. The rate fixed in point 1 (d) shall be applied to 
each Member State's additional base representing the 
difference between its gross national product at market 
prices and its base referred to in point 1 (c) above. 
4. If, at the beginning of the financial year, the budget 
has not been adopted, the previous rate applying to the 
additional base shall remain applicable until the entry 
into force of the new rate. 
5. By way of derogation from paragraph 1 (c) and (d) 
if, on 1 January of the financial year in question, the 
rules determining the uniform basis for assessing value 
added tax have not yet been applied in all Member 
States, the financial contribution to the budget of the 
Communities to be made by a Member State not yet 
applying this uniform basis shall be determined according 
to the proportion of its gross national product at market 
prices to the sum total of the gross national product of 
the Member States at market prices. The balance of the 
budget shall be covered by revenue accruing from value 
added tax and the additional base in accordance with 
paragraph 1 (c) and (d) and collected by the other 
Member States. This derogation shall cease to have 
effect as soon as the rules for determining the uniform 
basis for assessing value added tax are applied in all 
Member States. 
Article 3 
1. The total amount of own resources assigned to the 
Communities may not exceed: 
— 1,20 % of the Community's total GNP in 1988, 
— 1,22 % of the Community's total GNP in 1989, 
— 1,24 % of the Community's total GNP in 1990, 
— 1,27 °/o of the Community's total GNP in 1991, 
— 1,30 % of the Community's total GNP in 1992. 
These annual ceilings are within an overall limit on own 
resources of 1,4 % of GNP. 
2. Observance of this ceiling shall be based on a strict 
relationship between commitment appropriations and 
payment appropriations throughout the period 1988/92. 
8.9.87 Official Journal of the European Communities No C 241/5 
This shall involve an orderly progression in commitment 
appropriations culminating, in 1992, in a total allocation 
of commitment appropriations of less than 1,4 % of 
GNP. 
3. The ceiling of 1,4 % shall apply until this Decision 
is amended. Before the end of 1991, the Commission 
shall present a report on the operation of the own 
resources system and the application of budgetary 
discipline. 
Article 4 
The revenue referred to in Article 2 shall be used 
without distinction to finance all expenditure entered in 
the budget of the Communities. This provision shall be 
without prejudice to the treatment of contributions by 
certain Member States to supplementary programmes 
provided for in Article 130 L of the Treaty. 
Article 5 
Any surplus of the Communities' own resources over the 
actual expenditure during a financial year shall be 
carried over to the following financial year. 
Article 6 
1. The Community resources referred to in Article 2 
shall be established and collected by the Member States 
in accordance with national provisions imposed by law, 
regulation or administration action, which shall, where 
necessary, be adapted to meet the requirements of 
Community rules. Member States shall make these 
resources available to the Commission. 
2. Without prejudice to the auditing of accounts 
provided for in Article 206a of the Treaty establishing 
the European Economic Community, or to the 
inspection arrangements made pursuant to Article 209 (c) 
of that Treaty, the Council shall, acting unanimously on 
a proposal from the Commission and after consulting the 
European Parliament, adopt the provisions necessary to 
apply this Decision and to make possible the inspection 
of the collection, making available to the Commission 
and payment of the revenue referred to in Article 2. 
Article 7 
The mechanism for the graduated refund of own 
resources accruing from value added tax or GNP-based 
financial contributions introduced for the Kingdom of 
Spain and the Portuguese Republic up to 1991 by 
Articles 187 and 374 of the Act concerning the 
conditions of accession of the Kingdom of Spain and the 
Portuguese Republic and the adjustments to the Treaties 
shall apply to the own resources accruing from VAT and the additional resource referred to in points (c) and (d) 
of Article 2 (1) of this Decision. 
Article 8 
1. Member States shall be notified of this Decision by 
the Secretary-General of the Council of the European 
Communities; it shall be published in the Official Journal 
of the European Communities. 
Member States shall notify the Secretary-General of the 
Council of the European Communities without delay of 
the completion of the procedures for the adoption of this 
Decision in accordance with their respective 
constitutional requirements. 
This Decision shall enter into force on the first day of 
the month following receipt of the last of the 
notifications referred to in the second subparagraph. It 
shall take effect on 1 January 1988. 
2. (a) Subject to points (b) and (c) below, the Decision 
of 7 May 1985 shall be repealed on the same date. 
To the extent necessary, any reference to the 
Decision of 21 April 1970 or to the Decision of 
7 May 1985 shall be understood as referring to 
this Decision. 
(b) Article 3 of the Decision of 7 May 1985 shall 
continue to apply to the calculation and 
adjustment of revenue accruing from the 
application of rates to the uniform assessment 
basis for value added tax in 1987 and earlier 
years. 
For 1988 the correction in favour of the United 
Kingdom and the shares for financing it shall be 
calculated in accordance with points (b) and (c) 
of Article 3 (3) of the Decision of 7 May 1985. 
The corresponding amounts shall be assigned to 
the amounts due from each Member State in 
respect of the additional own resource referred to 
in point (d) of Article 2 (1) of this Decision and, 
where necessary, to the amounts due in respect of 
the VAT own resources referred to in point (c) of 
Article 2 (1). When Article 2 (5) has to be 
applied, the value added tax payments shall be 
replaced by financial contributions in the calcu­
lations referred to above for any Member State 
concerned. This system shall also apply to the 
payments of adjustments of corrections for 
previous years. 
(c) Article 4 (2) of the Decision of 7 May 1985 shall 
continue to apply to the financial contributions 
needed to finance the completion of the sup­
plementary programme for the operation of the 
HFR reactor 1984/87.