Commission Regulation (EC) No 995/2001 of 22 May 2001 implementing Regulation (EC) No 2516/2000 of the European Parliament and of the Council modifying the common principles of the European system of national and regional accounts in the Community (ESA 95) as concerns taxes and social contributions
Date: 2001-05-22
Institutions: European Commission
Subjects: EU statistics, European accounting system, OSCE, social-security contribution, tax

23.5.2001

EN

Official Journal of the European Communities

L 139/3

COMMISSION REGULATION (EC) No 995/2001

of 22 May 2001

implementing Regulation (EC) No 2516/2000 of the European Parliament and of the Council
modifying the common principles of the European system of national and regional accounts in the
Community (ESA 95) as concerns taxes and social contributions

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community,

Having regard to the Council Regulation (EC) No 2223/96 of
25 June 1996 on the European system of national and regional
accounts in the Community (ESA 95) (1), as last amended by
Regulation (EC) No 2516/2000 of the European Parliament
and of the Council (2), and in particular Articles 2(2) and 3(2)
thereof,

Having regard to Regulation (EC) No 2516/2000 modifying the
common principles of the ESA 95 as concerns taxes and social
contributions, and in particular Article 5 thereof,

(4)

(5)

(6)

Whereas:

(1)

(2)

Regulation (EC) No 2223/96 on the 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 require-
ments of the Community, in order to obtain comparable
results between Member States.

Regulation (EC) No 2516/2000 ensures comparability
and transparency among the Member States in the
recording of taxes and social contributions in ESA 95
lending/net
for
the excessive deficit procedure. Net
borrowing of general government shall not
include
amounts of taxes and social contributions unlikely to be
collected.

(3)

For the application of Regulation (EC) No 2516/2000
and within six months of its adoption, the Commission

shall introduce in the text of Annex A to Regulation (EC)
No 2223/96 the changes needed.

Articles 2(2) and 3(2) of Regulation (EC) No 2223/96
lay down the conditions under which the Commission
may adopt amendments to the ESA 95, in particular the
changes needed in Annex B to the abovementioned
Regulation.

The Committee on Monetary, Financial and Balance of
Payments Statistics (CMFB), set up by Council Decision
91/115/EEC (3), amended by Decision 96/174/EC (4), has
been consulted.

The measures provided for in this Regulation are in
accordance with
Statistical
the
set up by Council
Programme Committee
Decision 89/382/EEC, Euratom (5),

opinion
(SPC),

the

of

HAS ADOPTED THIS REGULATION:

Article 1

Annexes A and B to Regulation (EC) No 2223/96 shall be
amended in accordance with the Annex to this Regulation.

Article 2

This Regulation shall enter
into force on the 20th day
following its publication in the Official Journal of the European
Communities.

This Regulation shall not apply during the transitional period
that may be granted to Member States in accordance with
Article 7(2) of Regulation (EC) No 2516/2000.

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

Done at Brussels, 22 May 2001.

For the Commission

Pedro SOLBES MIRA

Member of the Commission

(1) OJ L 310, 30.11.1996, p. 1.
(2) OJ L 290, 17.11.2000, p. 1.

(3) OJ L 59, 6.3.1991, p. 19.
(4) OJ L 51, 1.3.1996, p. 48.
(5) OJ L 181, 28.6.1989, p. 47.

L 139/4

EN

Official Journal of the European Communities

23.5.2001

ANNEX

AMENDMENTS TO ANNEX A TO REGULATION (EC) No 2223/96

1.57

3.48

4.17

4.27

Delete:

‘Taxes evidenced by tax assessments but which are never paid (for
instance, because of bankruptcy) are treated as if they had been paid;
there are two eventualities:

(a) the writing-off of bad debt by the government, which recognises
that its claim can no longer be collected; this writing-off is recorded
in the other changes in the volume of assets accounts of the
government and the defaulting debtor;

(b) the cancellation of the debt by mutual agreement between the
government and the debtor. This cancellation is treated as a capital
transfer from the government to the debtor in the capital account,
with a simultaneous extinction of a claim in the financial account.’

Insert after ‘However,

in some cases … to use approximations.’

‘Additional to this flexibility as regards time of recording, it was neces-
sary for practical reasons linked to the excessive deficit procedure to
define a particular recording of taxes and social contributions payable
to the government sector, so that net lending/borrowing of general
government (and of counterpart sectors) shall not include amounts of
taxes and social contributions unlikely to be collected. By derogation to
the general principle of recording transactions, taxes and social contri-
butions payable to the general government can either be recorded net
of the part unlikely to be collected or, if this part is included, it should
be neutralised in the same accounting period by a capital transfer from
the general government to the relevant sectors.’

Insert in the defintion of the basic price of reference to point 4.27:

‘The basic price is the price receivable by the producers from the
purchaser for a unit of a good or service produced as output, minus any
tax payable (see point 4.27) on that unit as a consequence of its
production or sale (i.e. taxes on products), plus any subsidy receivable
on that unit as a consequence of its production or sale (i.e. subsidies on
products).’

Insert in the last sentence a reference to point 4.27:

‘For the total economy, VAT is equal to the difference between total
invoiced VAT and total deductible VAT (see point 4.27).’

Replace by:

‘Taxes 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.

(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 lia-
bility. This adjustment may be based on the average time difference
between the activity and cash tax receipt.’

23.5.2001

EN

Official Journal of the European Communities

L 139/5

4.82

Delete:

‘Taxes evidenced by tax assessments but which are never paid (for
instance, because of bankruptcy) are treated as if they had been paid;
there are two eventualities:

(a) the writing-off of bad debt by the government, which recognises
that its claim can no longer be collected; this writing-off is recorded
in the other changes in the volume of assets accounts of the
government and the defaulting debtor;

(b) the cancellation of the debt by mutual agreement between the
government and the debtor. This cancellation is treated as a capital
transfer from the government to the debtor in the capital account,
with a simultaneous extinction of a claim in the financial account.’

4.96

Replace by:

‘Taxes 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.

(b) If cash receipts are used, they shall be time-adjusted so that the cash
is attributed when the activities, transactions or other events 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 activities,
transactions or other events (or the determination of the amount of
tax) and cash tax receipt.

When retained at source by the employer, current taxes on income,
wealth, etc. should be included in wages and salaries even if
the
employer did not in fact pass them on to the general government. The
households sector is then shown as paying the full amount on to the
general government sector. The amounts actually unpaid have to be
neutralised under D.995 as a capital transfer from general government
to the employers' sectors.’

Insert at the end of the paragraph:

‘Social contributions payable to the general government sector 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
social contributions.

(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 social
contribution liability (or when the liability is created). This adjust-
ment may be based on the average time difference between the
activity (or the creation of the liability) and cash receipt.

When retained at source by the employer, social contributions payable
to the general government sector should be included in wages and
salaries even if the employer did not in fact pass them on to the general
government. The households sector is then shown as paying the full
amount on to the general government sector. The amounts actually
unpaid have to be neutralised under D.995 as a capital transfer from
general government to the employers' sectors.’

L 139/6

EN

Official Journal of the European Communities

23.5.2001

4.150

Delete paragraph 4.150:

Replace by a new paragraph: 4.150:

‘Time of recording: capital taxes are recorded at the time when the tax
liabilities arise.’

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

4.165

5.129

6.27

(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 ajdustment.
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.

(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). 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.’

Add at the end of the first sentence of part (f) a reference to new part (j):

‘— except the particular case of taxes and social contributions payable

to the general government sector (see 4.165 (j)).’

Insert at the end of the point:

‘(j) When taxes and social contributions payable to the general
government sector are recorded on the basis of assessments and
declarations, the part unlikely to be collected has to be neutralised
in the same accounting period. This can be done by an “Other
capital transfer” (D.99), inside the specific line D.995, between
general government and the relevant sectors. This D.995 flow has
to be subdivided according to the coding of the different taxes and
social contributions concerned.’

Insert at the end of the paragraph:

‘The amounts of taxes and social contributions payable to the general
government to be included under AF.79 should not include the part of
these taxes and social contributions which is unlikely to be collected,
and which therefore represents a general government claim that has no
real value.’

Insert at the end of point (d):

‘By derogation from the general principle, this heading does not include
taxes and social contributions payable to the general government that
the general government unilaterally recognises as unlikely to be
collected. Taxes and social contributions payable to the general govern-
ment and unlikely to be collected are, in the same accounting period
which has generated the liability, neutralised in the calculation of the
net lending/net borrowing of the general government sector and of the
counterpart sectors (see point 1.57).’

23.5.2001

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Official Journal of the European Communities

L 139/7

7.61

9.47

Insert at the end of the paragraph:

‘The amounts of taxes and social contributions payable to the general
government to be included under AF.79 should not include the part of
these taxes and social contributions which is unlikely to be collected,
and which therefore represents a general government claim that has no
real value.’

Delete the first sentence:

Replace the first sentence by:

‘Taxes and subsidies on products are the amounts due for payment only
when evidenced by tax assessments, declarations, etc. or the amounts
actually paid (see point 4.27).’

Delete in point (b)(2):

‘this should be recorded as another change in the volume of financial
assets and liabilities,

i.e. not in the supply and use table’.

Annex IV — Classifications and accounts

‘The way of recording taxes and subisidies on products is defined in
points 4.27 and 4.40 respectively.’

Inside classification of transactions and other flows, after ‘D.99 — Other
capital transfers’, the following list of codes should be added:

‘D.995

Capital transfers from general government to relevant
sectors
contributions
representing taxes
assessed but unlikely to be collected

and social

D.99521

.

Taxes on products assessed but unlikely to be collected

D.99529

Other taxes on production assessed but unlikely to be
collected

D.99551

Taxes on income assessed but unlikely to be collected

D.99559

Other current taxes assessed but unlikely to be collected

D.9956111 Employers'

actual

social

contributions

assessed but

unlikely to be collected

D.9956112 Employees' social contributions assessed but unlikely to

be collected

D.9956113 Social contributions by self- and unemployed persons

assessed but unlikely to be collected

D.99591

Capital taxes assessed but unlikely to be collected’

L 139/8

EN

Official Journal of the European Communities

23.5.2001

Table 2: Main aggregates of general government

AMENDMENTS TO ANNEX B TO REGULATION (EC) No 2223/96

Table 9: Detailed tax receipts by sector

At the end of the table the following code shall be added:

‘D.995

Capital transfers from general government to relevant
sectors
contributions
representing taxes
assessed but unlikely to be collected’

and social

At the end of the table the following flow D.995 and its subdivisions, without
splitting into receiving sub-sectors, shall be added:

‘D.995

Capital transfers from general government to relevant
contributions
representing taxes
sectors
assessed but unlikely to be collected

and social

D.99521

Taxes on products assessed but unlikely to be collected

D.99529

Other taxes on production assessed but unlikely to be
collected

D.99551

Taxes on income assessed but unlikely to be collected

D.99559

Other current taxes assessed but unlikely to be collected

D.9956111 Employers'

actual

social

contributions

assessed but

unlikely to be collected

D.9956112 Employees' social contributions assessed but unlikely to

be collected

D.9956113 Social contributions by self- and unemployed persons

assessed but unlikely to be collected

D.99591

Capital taxes assessed but unlikely to be collected

D.2 + D.5 + D.91 + D.611 – D.995

Total receipts from taxes and social contributions after
deduction of amounts assessed but unlikely to be
collected.’