2007/436/EC,Euratom: Council Decision of 7 June 2007 on the system of the European Communities’ own resources
Date: 2007-06-07
Institutions: Council of the European Union
Subjects: EU financing, general budget (EU), own resources

23.6.2007

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(Acts adopted under the EC Treaty/Euratom Treaty whose publication is not obligatory)

II

DECISIONS

COUNCIL

COUNCIL DECISION

of 7 June 2007

on the system of the European Communities’ own resources

(2007/436/EC, Euratom)

THE COUNCIL OF THE EUROPEAN UNION,

(2)

Having regard to the Treaty
Community, and in particular Article 269 thereof,

establishing the European

Having regard to the Treaty establishing the European Atomic
Energy Community, and in particular Article 173 thereof,

(3)

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament (1),

Having regard to the opinion of the Court of Auditors (2),

(4)

Having regard to the opinion of the European Economic and
Social Committee (3),

Whereas:

(1)

that

inter alia,

The European Council meeting in Brussels on 15 and 16
December 2005 concluded,
the own
resources arrangements should be guided by the overall
objective of equity. Those arrangements should therefore
ensure, in line with the relevant conclusions of the 1984
Fontainebleau European Council, that no Member State
sustains a budgetary burden which is excessive in relation
to its relative prosperity. It is therefore appropriate to
introduce provisions covering specific Member States.

The Communities’ own resources system must ensure
adequate resources for the orderly development of the
Communities’ policies, subject
to the need for strict
budgetary discipline.

For the purposes of this Decision, gross national income
(GNI) should be defined as annual GNI at market prices
as provided by the Commission in application of the
European system of national and regional accounts in
the Community (hereinafter referred to as the ESA 95)
in accordance with Council Regulation (EC) No
2223/96 (4).

and

system of

Euratom of

In view of the changeover from ESA 79 to ESA 95 for
budgetary and own resources purposes, and in order to
maintain unchanged the amount of financial resources
put at the disposal of the Communities the Commission
recalculated, in accordance with Article 3(1) and 3(2) of
Council Decision
29
2000/597/EC,
the European
September 2000 on the
Communities’ own resources (5),
the ceiling of own
resources
for
for
commitments, expressed to two decimal places, on the
basis of the formula in that Article. The Commission
communicated the new ceilings to the Council and the
European Parliament on 28 December 2001. The ceiling
of own resources was set at 1,24 % of the total GNIs of
the Member States at market prices and a ceiling of
1,31 % of the total GNIs of the Member States was set
for appropriations
for commitments. The European
Council of 15 and 16 December 2005 concluded that
these ceilings should be maintained at their current levels.

appropriations

ceiling

the

(1) Opinion delivered on 4 July 2006 (not yet published in the Official

Journal).

(2) OJ C 203, 25.8.2006, p. 50.
(3) OJ C 309, 16.12.2006, p. 103.

(4) OJ L 310, 30.11.1996, p. 1. Regulation as last amended by Regu-
lation (EC) No 1267/2003 of the European Parliament and of the
Council (OJ L 180, 18.7.2003, p. 1).

(5) OJ L 253, 7.10.2000, p. 42.

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In order to maintain unchanged the amount of financial
resources put at the disposal of the Communities, it is
appropriate to adapt those ceilings expressed in per cent
of GNI in case of modifications to the ESA 95 which
entail a significant change in the level of GNI.

the exclusion of the annual pre-accession expenditure in
acceding countries from the calculation of the correction
in favour of the United Kingdom shall cease to apply at
the end of 2013.

(5)

(6)

(7)

(8)

(9)

Following the implementation in European Union law of
the agreements concluded during the Uruguay round of
trade negotiations there is no longer any
multilateral
material difference between agricultural duties
and
customs duties.
is therefore appropriate to remove
this distinction from the field of the general budget of
the European Union.

It

transparency and simplicity,

In the interests of
the
European Council of 15 and 16 December 2005
concluded that the uniform rate of call of the Value
Added Tax (VAT) resource shall be fixed at 0,30 %.

The European Council of 15 and 16 December 2005
concluded that Austria, Germany, the Netherlands and
Sweden shall benefit
from reduced VAT rates of call
during the period 2007-2013 and that the Netherlands
and Sweden shall benefit from gross reductions in their
annual GNI-based contributions during the same period.

The European Council of 15 and 16 December 2005
concluded that the correction mechanism in favour of
the United Kingdom shall
remain, along with the
reduced financing of the correction benefiting Germany,
Austria, Sweden and the Netherlands. However, after a
phasing-in period between 2009 and 2011, the United
Kingdom shall participate fully in the financing of the
costs of enlargement,
for agricultural direct
except
payments and market-related expenditure, and that part
of rural development expenditure originating from the
European Agricultural Guidance and Guarantee Fund
the
(EAGGF), Guarantee Section. The calculation of
correction in favour of
the United Kingdom shall
therefore be adjusted by progressively excluding expen-
diture allocated to Member States which have acceded to
the EU after 30 April 2004, except for the agricultural
and rural development expenditure mentioned above.
The additional contribution of
the United Kingdom
resulting from the reduction in allocated expenditure
shall not exceed EU-10,5 billion in 2004 prices during
In the event of further enlar-
the period 2007-2013.
except
gement before 2013,
the accession of
Bulgaria and Romania,
the amount will be adjusted
accordingly.

for

(10)

The European Council of 15 and 16 December 2005
concluded that point
the second paragraph of
Article 4 of Decision 2000/597/EC, Euratom regarding

(f) of

(11)

The European Council of 15 and 16 December 2005
invited the Commission to undertake a full, wide-
ranging review covering all aspects of EU spending,
including the Common Agricultural Policy (CAP), and
of resources, including the United Kingdom rebate, and
to report in 2008/2009.

(12)

Provisions should be laid down to cover the changeover
from the system laid down by Decision 2000/597/EC,
Euratom to that introduced by this Decision.

(13)

The European Council of 15 and 16 December 2005
take effect on 1
concluded that
January 2007,

this Decision shall

HAS LAID DOWN THESE PROVISIONS, WHICH IT RECOMMENDS
TO THE MEMBER STATES FOR ADOPTION:

Article 1

shall be

allocated own resources

The Communities
in
accordance with the rules laid down in the following Articles
in order to ensure, in accordance with Article 269 of the Treaty
establishing the European Community (hereinafter referred to as
the EC Treaty) and Article 173 of the Treaty establishing the
European Atomic Energy Community (hereinafter referred to as
the Euratom Treaty), the financing of the general budget of the
European Union.

The general budget of
prejudice to other
Communities’ own resources.

the European Union shall, without
revenue, be financed wholly from the

Article 2

Revenue from the following shall constitute own resources

1.
entered in the general budget of the European Union:

(a)

levies, premiums, additional or compensatory amounts,
additional amounts or factors, 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, customs duties on products under
the expired Treaty establishing the European Coal and Steel
Community as well as contributions and other duties
provided for within the framework of the common organi-
sation of the markets in sugar;

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(b) without prejudice to the second subparagraph of paragraph
4, the application of a uniform rate valid for all Member
States to the harmonised VAT assessment bases determined
according to Community rules. The assessment base to be
taken into account for this purpose shall not exceed 50 % of
GNI for each Member State, as defined in paragraph 7;

Should modifications to the ESA 95 result in significant changes
in the GNI as provided by the Commission, the Council, acting
the Commission and after
unanimously on a proposal of
shall decide whether
consulting the European Parliament,
this
the purposes of
shall apply for
these modifications
Decision.

(c) without prejudice to the second subparagraph of paragraph
5, the application of a uniform rate — to be determined
pursuant to the budgetary procedure in the light of the total
of all other revenue — to the sum of all the Member States’
GNIs.

Article 3

1.
The total amount of own resources allocated to the
Communities to cover annual appropriations for payments
shall not exceed 1,24 % of the sum of all the Member States’
GNIs.

2.
Revenue deriving from any new charges introduced within
the framework of a common policy, in accordance with the EC
Treaty or the Euratom Treaty, provided that the procedure laid
down in Article 269 of the EC Treaty or in Article 173 of the
Euratom Treaty has been followed, shall also constitute own
resources entered in the general budget of the European Union.

3. Member States shall retain, by way of collection costs,
25 % of the amounts referred to in paragraph 1(a).

The uniform rate referred to in paragraph 1(b) shall be

4.
fixed at 0,30 %.

For the period 2007-2013 only, the rate of call of the VAT
resource for Austria shall be fixed at 0,225 %, for Germany at
0,15 % and for the Netherlands and Sweden at 0,10 %.

The uniform rate referred to in paragraph 1(c) shall apply

5.
to the GNI of each Member State.

For the period 2007-2013 only, the Netherlands shall benefit
from a gross reduction in its annual GNI contribution of EUR
605 million and Sweden from a gross reduction in its annual
GNI contribution of EUR 150 million, measured in 2004 prices.
These amounts shall be adjusted to current prices by applying
the most recent GDP deflator for the EU expressed in euro, as
provided by the Commission, which is available when the preli-
minary draft budget is drawn up. These gross reductions shall
be granted after the calculation of the correction in favour of
the United Kingdom and its financing referred to in Articles 4
and 5 of this Decision and shall have no impact thereupon.

The

total

annual

2.
for
amount
commitments entered in the general budget of the European
Union shall not exceed 1,31 % of the sum of all the Member
States’ GNIs.

appropriations

of

An orderly ratio between appropriations for commitments and
appropriations for payments shall be maintained to guarantee
their compatibility and to enable the ceiling pursuant
to
paragraph 1 to be respected in subsequent years.

3.
Should modifications to the ESA 95 result in significant
changes in the GNI that apply for the purposes of this Decision,
the ceilings for payments and commitments as determined in
paragraphs 1 and 2 shall be recalculated by the Commission on
the basis of the following formula:

1,24 % ð1,31 %Þ ×

GNIt–2 þ GNIt–1 þ GNIt ESA current
GNIt–2 þ GNIt–1 þ GNIt ESA modified

is the latest

where t
full year for which data according to
Council Regulation (EC, Euratom) No 1287/2003 of 15 July
2003 on the harmonisation of gross national
income at
market prices (GNI Regulation) (1) is available.

Article 4

The United Kingdom shall be granted a correction in

1.
respect of budgetary imbalances.

This correction shall be established by:

6.
If, at the beginning of the financial year, the budget has
not been adopted, the existing VAT and GNI rates of call shall
remain applicable until the entry into force of the new rates.

(a) calculating the difference,

in the preceding financial year,

between:

7.
For the purposes of this Decision, GNI shall mean GNI for
the year at market prices as provided by the Commission in
application of the ESA 95 in accordance with Regulation (EC)
No 2223/96.

— the percentage share of the United Kingdom in the sum

of uncapped VAT assessment bases, and

(1) OJ L 181, 19.7.2003, p. 1.

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— the percentage share of the United Kingdom in total

allocated expenditure;

(b) multiplying the difference thus obtained by total allocated

expenditure;

(c) multiplying the result under (b) by 0,66;

(d) subtracting from the result under (c) the effects arising for
the United Kingdom from the changeover to capped VAT
and the payments referred to in Article 2(1)(c), namely the
difference between:

— what the United Kingdom would have had to pay for
the amounts financed by the resources referred to in
Article 2(1)(b) and (c),
if the uniform rate had been
applied to non-capped VAT bases, and

— the payments of the United Kingdom pursuant to Article

2(1)(b) and (c);

(e) subtracting from the result under (d) the net gains of the
in the
United Kingdom resulting from the
percentage of
referred to in Article 2(1)(a)
resources
retained by Member States to cover collection and related
costs;

increase

(f) calculating, at the time of each enlargement of the EU, an
adjustment
to the result under (e) so as to reduce the
compensation, thereby ensuring that expenditure which is
unabated before enlargement remains so after enlargement.
This adjustment shall be made by reducing total allocated
expenditure by an amount equivalent to the annual pre-
acceding countries. All
accession expenditure
in the
carried forward to
amounts
adjusted annually by
subsequent years
applying the latest available GDP deflator
the EU
for
expressed in euro, as provided by the Commission. This
point shall cease to apply as from the correction to be
budgeted for the first time in 2014;

so calculated shall be

and shall be

(g) adjusting the calculation, by reducing total allocated expen-
diture by 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 that part of rural development expenditure origi-
nating from the EAGGF, Guarantee Section.

This reduction shall be phased in progressively according to the
schedule below:

United Kingdom correction to be
budgeted for the first time in the year

Percentage of enlargement-related
expenditure (as defined above) to be
excluded from the calculation of the
correction in favour of the United
Kingdom

2009

2010

2011

20

70

100

2.
During the period 2007-2013 the additional contribution
of the United Kingdom resulting from the reduction of allocated
expenditure referred to in paragraph (1)(g) shall not exceed EU-
the
10,5 billion, measured in 2004 prices. Each year,
Commission services
cumulated
adjustment of
the correction exceeds this amount. For the
purpose of this calculation, amounts in current prices shall be
converted into 2004 prices by applying the latest available GDP
deflator for the EU expressed in euro, as provided by the
Commission. If the ceiling of EU-10,5 billion is exceeded, the
United Kingdom’s contribution shall be reduced accordingly.

shall verify whether

the

In the event of further enlargement before 2013, the ceiling of
EU-10,5 billion shall be adjusted upwards accordingly.

Article 5

1.
The cost of the correction shall be borne by the other
Member States in accordance with the following arrangements:

(a)

the cost shall

the distribution of
first be calculated by
reference to each Member State’s share of the payments
referred to in Article 2(1)(c), the United Kingdom being
excluded and without taking account of the gross reductions
in the GNI-based contributions of
the Netherlands and
Sweden referred to in Article 2(5);

(b) it shall then be adjusted in such a way as to restrict the
financing share of Austria, Germany, the Netherlands and
Sweden to one fourth of their normal share resulting from
this calculation.

2.
The correction shall be granted to the United Kingdom by
a reduction in its payments resulting from the application of
Article 2(1)(c). The costs borne by the other Member States
shall be added to their payments resulting from the application
for each Member State of Article 2(1)(c).

3.
The Commission shall perform the calculations required
for the application of Article 2(5), Article 4 and this Article.

If, at the beginning of the financial year, the budget has
4.
not been adopted,
the correction granted to the United
Kingdom and the costs borne by the other Member States as
entered in the
remain
applicable.

finally adopted shall

last budget

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Article 6

The revenue referred to in Article 2 shall be used without
distinction to finance all expenditure entered in the general
budget of the European Union.

Article 7

the Communities’ revenue over total actual
Any surplus of
expenditure during a financial year shall be carried over to
the following financial year.

Article 8

The Communities’ own resources referred to in Article
1.
2(1)(a) shall be collected by the Member States in accordance
with the national provisions imposed by law, regulation or
administrative
appropriate, be
action, which shall, where
adapted to meet the requirements of Community rules.

The Commission shall examine at regular intervals the national
provisions communicated to it by the Member States, transmit
to the Member States the adjustments it deems necessary in
order to ensure that they comply with Community rules and
report to the budgetary authority.

Member States shall make the resources provided for in Article
2(1)(a), (b) and (c) available to the Commission.

2.
The Council shall, in accordance with the procedures laid
down in Article 279(2) of the EC Treaty and Article 183 of the
Euratom Treaty, adopt the provisions necessary to apply this
Decision and to make possible the inspection of the collection,
the making available to the Commission and payment of the
revenue referred to in Articles 2 and 5.

Article 9

In the framework of the full, wide-ranging review covering all
aspects of EU spending, including the CAP, and of resources,
including the United Kingdom rebate, on which it shall report
in 2008/2009, the Commission shall undertake a general review
of the own resources system.

Article 10

Subject to paragraph 2, Decision 2000/597/EC, Euratom
1.
shall be repealed as of 1 January 2007. Any references to the
Council Decision of 21 April 1970 on the replacement of
financial contributions from Member States by the Commu-
nities’ own resources (1),
to Council Decision 85/257/EEC,
Euratom of 7 May 1985 on the Communities’ system of own
resources (2), to Council Decision 88/376/EEC, Euratom of 24
the Communities’ own
June 1988 on the
resources (3), to Council Decision 94/728/EC, Euratom of 31

system of

October 1994 on the system of the European Communities’
own resources (4) or to Decision 2000/597/EC, Euratom shall
be construed as references to this Decision.

2.
Articles 2, 4 and 5 of Decisions 88/376/EEC, Euratom,
94/728/EC, Euratom and 2000/597/EC, Euratom shall continue
to apply to the calculation and adjustment of revenue accruing
from the application of a uniform rate valid for all Member
States to the VAT base determined in a uniform manner and
limited between 50 % and 55 % of the GNP or GNI of each
Member State, depending on the relevant year, and to the calcu-
lation of the correction of budgetary imbalances granted to the
United Kingdom for the years 1988 to 2006.

3. Member States
shall continue to retain, by way of
collection costs, 10 % of the amounts referred to in Article
2(1)(a) which should have been made
available by the
Member States before 28 February 2001 in accordance with
the applicable Community rules.

Article 11

Member States
Secretary-General of the Council.

shall be notified of

this Decision by the

Member States shall notify the Secretary-General of the Council
without delay of
the procedures for the
adoption of this Decision in accordance with their respective
constitutional requirements.

the completion of

This Decision shall enter into force on the first day of the
month following receipt of
the notifications
referred to in the second subparagraph.

the last of

It shall take effect on 1 January 2007.

Article 12

This Decision shall be published in the Official Journal of the
European Union.

Done at Luxembourg, 7 June 2007.

For the Council
The President

M. GLOS

(1) OJ L 94, 28.4.1970, p. 19.
(2) OJ L 128, 14.5.1985, p. 15.
(3) OJ L 185, 15.7.1988, p. 24.

(4) OJ L 293, 12.11.1994, p. 9.