Common Position (EC) No 37/2000

adopted by the Council on 26 June 2000

with a view to adopting a Regulation of the European Parliament and of the Council of ... modifying the common principles of the European system of national and regional accounts in the Community (ESA 95) as concerns taxes and social contributions and amending Council Regulation (EC) No 2223/96

(2000/C 245/01)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 285 thereof,

Having regard to the proposal from the Commission(1),

Having regard to the opinion of the Economic and Social Committee(2),

Acting in accordance with the procedure laid down in Article 251 of the Treaty(3),

Whereas:

(1) Council Regulation (EC) No 2223/96 of 25 June 1996 on the European system of national and regional accounts in the Community(4) (ESA 95) contains the reference framework of common standards, definitions, classifications and accounting rules for drawing up the accounts of the Member States for the statistical requirements of the Community, in order to obtain comparable results between Member States.

(2) Article 2 of Regulation (EC) No 2223/96 sets out the conditions under which the Commission may adopt amendments to the ESA 95 methodology which are intended to clarify and improve its content.

(3) It is therefore necessary to refer the clarifications concerning the recording of taxes and social contributions in ESA 95 to the European Parliament and to the Council as these clarifications modify basic concepts.

(4) Article 2 of the Protocol on the excessive deficit procedure relating to Article 104 of the Treaty states that the government deficit means net borrowing of the general government sector as defined in the European system of integrated economic accounts (ESA).

(5) The Statistical Programme Committee (SPC), set up by Council Decision 89/382/EEC, Euratom(5), the Committee on Monetary, Financial and Balance of Payments Statistics (CMFB), set up by Council Decision 91/115/EEC(6), and the Gross National Product Committee (GNP Committee) can state their opinion on the country-specific accounting treatment of taxes and social contributions whenever they consider it relevant.

(6) The SPC and the CMFB have been consulted.

(7) The measures necessary for the implementation of Regulation (EC) No 2223/96 should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission(7),

HAVE ADOPTED THIS REGULATION:

Article 1

Purpose

The purpose of this Regulation is to modify the common principles of ESA 95 as concerns taxes and social contributions so as to ensure comparability and transparency among the Member States.

Article 2

General principles

The impact on the net lending/borrowing of general government of taxes and social contributions recorded in the system shall not include amounts unlikely to be collected.

Accordingly, the impact on general government net lending/borrowing of taxes and social contributions recorded in the system on an accrual basis shall be equivalent over a reasonable amount of time to the corresponding amounts actually received.

Article 3

Treatment of taxes and social contributions in the accounts

Taxes and social contributions recorded in the accounts may be derived from two sources: amounts evidenced by assessments and declarations or cash receipts.

(a) If assessments and declarations are used, the amounts shall be adjusted by a coefficient reflecting assessed and declared amounts never collected. As an alternative treatment, a capital transfer to the relevant sectors could be recorded equal to the same adjustment. The coefficients shall be estimated on the basis of past experience and current expectations in respect of assessed and declared amounts never collected. They shall be specific to different types of taxes and social contributions. The determination of these coefficients shall be country-specific, the method being cleared with the Commission (Eurostat) beforehand.

(b) If cash receipts are used, they shall be time-adjusted so that the cash is attributed when the activity took place to generate the tax liability (or when the amount of tax was determined, in the case of some income taxes). This adjustment may be based on the average time difference between the activity (or the determination of the amount of tax) and cash tax receipt.

Article 4

Verification

1. The Commission (Eurostat) shall verify the implementation by Member States of the principles laid down in this Regulation.

2. From 2000 onwards, Member States shall provide the Commission (Eurostat) before the end of each year with a detailed description of the methods they plan to use for the different categories of taxes and social contributions in order to implement this Regulation.

3. The methods applied and the possible revisions shall be subject to agreement between each Member State concerned and the Commission (Eurostat).

4. The Commission (Eurostat) shall keep the SPC, the CMFB and the GNP Committee informed of the methods and the calculation of the aforementioned coefficients.

Article 5

Implementation

Within six months of the adoption of this Regulation, the Commission shall introduce in the text of Annex A to Regulation (EC) No 2223/96, pursuant to the procedure in Article 4 thereof, the changes needed for the application of this Regulation.

Article 6

Committee procedure

Article 4 of Regulation (EC) No 2223/96 shall be replaced by the following:

"Article 4

1. The Commission shall be assisted by the Statistical Programme Committee (hereinafter referred to as 'the Committee').

2. Where reference is made to this Article, Articles 4 and 7 of Decision 1999/468/EC shall apply, having regard to the provisions of Article 8 thereof.

The period laid down in Article 4(3) of Decision 1999/468/EC shall be set at three months.

3. The Committee shall adopt its rules of procedure."

Article 7

Entry into force

1. This Regulation shall enter into force on the twentieth day following its publication in the Official Journal of the European Communities.

2. Member States may ask the Commission for a transitional period of no more than two years in which to bring their accounting systems into line with this Regulation.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at ...

For the European Parliament

The President

For the Council

The President

(1) OJ C 21 E, 25.1.2000, p. 68.

(2) OJ C 75, 15.3.2000, p. 19.

(3) Opinion of the European Parliament of 13 April 2000 (not yet published in the Official Journal), Council Common Position of 26 June 2000 and Decision of the European Parliament of ... (not yet published in the Official Journal).

(4) OJ L 310, 30.11.1996, p. 1. Regulation as amended by Regulation (EC) No 448/98 (OJ L 58, 27.2.1998, p. 1).

(5) OJ L 181, 28.6.1989, p. 47.

(6) OJ L 59, 6.3.1991, p. 19. Decision as amended by Decision 96/174/EC (OJ L 51, 1.3.1996, p. 48).

(7) OJ L 184, 17.7.1999, p. 23.

STATEMENT OF THE COUNCIL'S REASONS

I. INTRODUCTION

1. On 19 October 1999, the Commission forwarded to the Council a proposal for a European Parliament and Council Regulation modifying the common principles of the ESA 95 for recording taxes and social contributions and amending Council Regulation (EC) No 2223/96.

2. The above proposal is based on Article 285 of the Treaty according to which the procedure of co-decision with the European Parliament prescribed in Article 251 of the Treaty applies.

3. The European Parliament delivered its opinion in first reading on 13 April 2000.

4. The Economic and Social Committee delivered its opinion on 26 January 2000.

5. On 26 June 2000, the Council adopted its Common Position pursuant to Article 251 of the Treaty.

II. OBJECTIVE OF THE PROPOSAL

The main purpose of the proposal is to modify the common principles relating to the ESA 95 with regard to the recording of taxes and social contributions. Furthermore it aims to amend Council Regulation (EC) No 2223/96 by replacing the committee procedure of Article 4 in order to take account of Council Decision 1999/468/EC of 28 June 1999(1). Concerning the main purpose it aims to ensure that Community's statistical needs are met by recording taxes and social contributions in the ESA 95 in a comparable and transparent manner. The major modification to be introduced is that taxes and social contributions recorded in the system exclude amounts which are not expected to be collected. This aims to ensure that within a reasonable period, taxes and social contributions recorded on the basis of the operative event are equivalent to the corresponding amounts actually collected.

III. ANALYSIS OF THE COMMON POSITION

The Common Position follows the main approach of the Commission proposal. The changes in the Common Position as compared to the Commission proposal are set out below.

Amendment 1 of the European Parliament, changing the title of the Regulation by replacing the term "clarifying" with "amending", is included in the Common Position in substance but with slightly modified drafting taking into account the Interinstitutional Agreement of 22 December 1998 on common guidelines for the quality of drafting of Community legislation(2), in particular point 18 thereof.

Article 1

In the Common Position, Article 1 has been redrafted in order to take into account the change made to the title of this Regulation. In substance, this change follows amendment 1 of the European Parliament.

However, since this proposal aims to modify the existing regulation relating to the ESA 95 only as far as the principles for recording taxes and social contributions are concerned, the Council did not find it appropriate to include in this context provisions creating a legal basis for the determination of the VAT own resources using ESA 95. Therefore amendment 6 of the European Parliament has not been included in the Common Position.

Article 2

The modifications to the text of Article 2 do not change the substance of the Commission proposal, but aim to improve the text by using a more precise wording.

Article 3

In Article 3(a) of the Common Position, a provision for an alternative treatment has been added in order to increase flexibility. Hence amendment 7 of the European Parliament has been included, although with a slightly altered wording.

Article 4 of the Commission proposal

The Council considered that the provisions in Article 4 of the original Commission proposal were not sufficiently clear and decided to delete the Article as unnecessary.

Article 4 (Article 5 of the Commission proposal)

No changes have been introduced to the Commission proposal.

Article 5 (Article 6 of the Commission proposal)

The wording of this Article has been amended in order to improve the clarity of the text. Amendment 8 of the European Parliament has been included.

Article 6 (new)

In order to take account of Council Decision 1999/468/EC of 28 June 1999(3), which replaces the committee procedure of Council Decision 87/373/EEC, a new Article 6 has been introduced to the Common Position. This provision replaces Article 4 of Regulation (EC) No 2223/96 by the new committee procedure. This amendment does not change the substance of Article 5 of the Common Position.

Article 7 of the Commission proposal

The date of entry into force in the Common Position is set for the 20th day following its publication in the Official Journal.

In Article 7(2) of the Common Position the Council has introduced a provision allowing Member States to ask the Commission for a transitional period of no more than two years. The Common Position thus includes amendment 9 of the European Parliament.

Recitals

The recitals have been adapted following the modifications to the Commission proposal.

In order to clarify the text, the Council has deleted recital 3 of the Commission proposal and amended recital 4 (new 3) by making clear that it is necessary to refer the clarifications concerning the recording of taxes and social contributions in ESA 95 to the European Parliament and to the Council as these clarifications modify basic concepts.

The Council does not disagree with the principle that there is a need to establish clear criteria for accounts in the various Member States to be homogeneous. However, the Council did not include amendments 2 and 3 of the European Parliament, because their purpose is not to explain the enacting terms of the Regulation (see point 10 of the Interinstitutional Agreement on common guidelines for the quality of drafting of Community legislation(4)).

Furthermore for the reasons explained under Article 1, the Council could not accept amendments 4 and 5 of the European Parliament.

In relation to Article 5, a new recital 5 has been included in the Common Position in order to clarify the role of the various committees.

IV. CONCLUSION

The Council considers that all modifications introduced in its Common Position are fully in line with the objectives of the proposed Regulation. This aims to ensure that, whichever statistical sources are used, the Member States are placed on an equal footing. The Common Position includes the substance of most of the amendments to the enacting terms as proposed by the European Parliament.

(1) OJ L 184, 17.7.1999, p. 23.

(2) OJ C 73, 17.3.1999, p. 1.

(3) OJ L 184, 17.7.1999, p. 23.

(4) OJ C 73, 17.3.1999, p. 1.