Preliminary draft amending budget n° 5 to the general budget 2007 - General statement of revenue
Date: 2007-06-21
Institutions: Directorate-General for Budget, European Commission
Subjects: amending budget, budgetary resources, financial regulation, general budget (EU), preliminary draft EC budget

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 21.6.2007 
COM(2007) 340 final 

PRELIMINARY DRAFT AMENDING BUDGET N° 5  
TO THE GENERAL BUDGET 2007 

GENERAL STATEMENT OF REVENUE 

(presented by the Commission) 

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PRELIMINARY DRAFT AMENDING BUDGET N° 5  
TO THE GENERAL BUDGET 2007 

GENERAL STATEMENT OF REVENUE 

Having regard to: 

– 

– 

– 

the  Treaty  establishing  the  European  Community,  and  in  particular  Article 272 
thereof, 

the  Treaty  establishing  the  European  Atomic  Energy  Community,  and  in  particular 
Article 177 thereof, 

the  Council  Regulation  (EC,  Euratom)  No  1605/2002  of  25  June  2002  on  the 
Financial Regulation applicable to the general budget of the European Communities1, 
as  last  amended  by  Council  Regulation  (EC,  Euratom)  No  1995/20062,  and  in 
particular Article 37 thereof, 

The European Commission hereby presents to the budgetary authority the Preliminary Draft 
Amending  Budget  No 5  to  the  2007  budget  for  the  reasons  set  out  in  the  explanatory 
memorandum. 

1 
2 

OJ L 248, 16.09.2002, p.1. 
OJ L 390, 30.12.2006, p.1. 

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Table of contents 

1. 

2. 

3. 

Introduction .................................................................................................................. 4 

Revision of the Forecast of TOR, VAT and GNI Bases .............................................. 6 

2003 UK Correction and 2006 UK Correction ............................................................ 7 

3.1. 

Calculation of the corrections ...................................................................................... 8 

3.1.1. 

2006 UK correction...................................................................................................... 8 

3.1.2. 

2003 UK correction...................................................................................................... 9 

3.2. 

Entry in the PDAB 5/2007 of the first update of the 2006 UK correction and of the 
definitive amount of the 2003 UK correction ............................................................ 10 

3.2.1. 

2006 UK correction (chapter 15) ............................................................................... 10 

3.2.2. 

2003 UK correction (chapter 35) ............................................................................... 10 

GENERAL STATEMENT OF REVENUE 

The  general  statement  of  revenue  is  forwarded  separately  via  the  SEI-BUD  system.  An 
English version of the general statement of revenue is attached for information as a budgetary 
annex. 

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1. 

INTRODUCTION 

The Preliminary Draft Amending Budget No 5 to the Budget for 2007 (PDAB 5/2007) covers 
the following points: 

–  The  revision  of  the  forecast  of  traditional  own  resources  (TOR,  i.e.  customs  duties, 
agricultural duties and sugar levies), VAT and GNI bases and the budgeting of the relevant 
UK corrections as well as their financing, resulting in a change in the distribution between 
Member States of their own resources contributions to the EU budget. 

–  The repayment of the surplus from the Guarantee Fund for external measures. 

Article  7  of  Council  Decision  (EC,  Euratom)  2000/597  states  that  "  …surplus  from  the 
Guarantee  Fund  arising  from  external  measures,  transferred  to  the  revenue  account  in  the 
budget, shall be regarded as constituting own resources ". Thus in addition to the revision of 
the forecasts of own resources, the PDAB 5/2007 enters an amount of EUR 260 940 125 as a 
result of the repayment referred to in Article 1(2) of Council Regulation (EC, Euratom) No 
2273/20043. 

The reason for this surplus is that all operations carried out for the benefit of a third country or 
for the purpose of financing projects in a third country shall fall outside the scope of Council 
Regulation (EC, Euratom) No 2728/94 of 31 October 1994 establishing a Guarantee Fund for 
external  actions,  with  effect  from  the  date  on  which  that  country  accedes  to  the  EU.  The 
above amount results from the repayment to the general budget of the amount corresponding 
to the provision of outstanding capital liabilities for Bulgaria and Romania at 1 January 2007. 

–  The impact of changes in the Financial Regulation on the revenue side. 

All  the  recent  amendments  to  the  Financial  Regulation  have  entered  into  force  by  1  May 
20074. Moreover Regulation (EC, Euratom) No 2342/2002 laying down detailed rules for the 
implementation  of  the  Financial  Regulation  has  been  also  amended5.  Therefore  appropriate 
changes will need to be made in the PDAB 5/2007. 

Three new budget lines (6330, 6331 and 6332) have been created to accommodate financial 
contributions  from  Member  States  and  other  donor  countries,  including  in  both  cases  their 
public  and  parastatal  agencies,  or  from  international  organisations  to  certain  external  aid 
projects  or  programmes  financed  by  the  Community  and  managed  by  the  Commission  on 
their behalf, pursuant to the relevant basic act. This is a consequence of the new point (aa) that 
has been inserted into Article 18 (1) of the Financial Regulation. 

3 

4 

5 

Council  Regulation  (EC,  Euratom)  No 2273/2004  of  22 December 2004  amending  Regulation(EC,  Euratom) 
No 2728/94 establishing a Guarantee Fund for external actions (OJ L 396, 31.12.2004, p. 28–29). 
Council  Regulation  (EC,  Euratom)  No 1995/2006  of  13 December 2006  amending  Regulation  (EC,  Euratom) 
No 1605/2002  on  the  Financial  Regulation  applicable  to  the  general  budget  of  the  European  Communities  (OJ 
L 390, 30.12.2006, p. 1–26). 
Commission  Regulation  (EC,  Euratom)  No 478/2007  of  23 April 2007  amending  Regulation  (EC,  Euratom) 
No 2342/2002  laying  down  detailed  rules  for  the  implementation  of  Council  Regulation  (EC,  Euratom) 
No 1605/2002  on  the  Financial  Regulation  applicable  to  the  general  budget  of  the  European  Communities  (OJ 
L 111, 28.4.2007, p. 13–45). 

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Some  budget  remarks  in  the  statement  of  revenue  contain  references  to  articles  of  the 
Financial Regulation that have been modified and they need to be adjusted accordingly. This 
is a purely technical update and concerns the following articles/items: 5000, 5001, 522, 6113, 
6701, 6702, 6703, 6711, 6712 and 6802. 

The following summary table shows the distribution of total own resources payments between 
Member States as budgeted in the Budget 2007, in the Amending Budget (AB) 1/2007 (that 
modifies  the  2007  budget  in  order  to  integrate  the  necessary  technical  adjustments  needed 
from the amending letter No 2/2007, which could not be taken on board during the last phase 
of  the  2007  budget  procedure),  in  the  Preliminary  Draft  Amending  Budget  (PDAB)  2/2007 
(that modifies the AB 1/2007 in order to mobilise the EU Solidarity Fund for the floods that 
hit Hungary and Greece in March and April 2006 and that modifies the structure of the budget 
for Research following the adoption of the 7th Framework Programme), in the PDAB 3/2007 
(that modifies the PDAB 2/2007 as far as agencies are concerned), in the PDAB 4/2007 (that 
modifies  the  PDAB  3/2007  in  order  to  budget  the  surplus  from  the  previous  year  of 
EUR 1 847,6 million) and in the present PDAB 5/2007. 

Budget 2007, 
AB 1/2007, 
PDAB 2/2007 & 
PDAB 3/2007 
(1) 

PDAB 4/2007 

PDAB 5/2007 

amounts in euro 

PDAB 5/2007 
vs. 
PDAB 4/2007 

PDAB 4/2007 
vs. 
PDAB 3/2007 

(2) 

(3) 

in % 

(4) = (3) – (2) 

(4) = (2) – (1) 

BE 
BG 
CZ 
DK 
DE 
EE 
IE 
EL 
ES 
FR 
IT 
CY 
LV 
LT 
LU 
HU 
MT 
NL 
AT 
PL 
PT 
RO 
SI 
SK 
FI 
SE 
UK 

EU 

 4 498 323 986 
 322 612 813 
 1 216 863 719 
 2 344 743 747 
 22 461 580 633 
 138 567 103 
 1 676 005 781 
 2 104 756 564 
 10 828 853 860 
 18 338 461 530 
 14 603 278 351 
 178 627 328 
 188 436 582 
 270 700 006 
 258 243 690 
 928 912 076 
 57 460 366 
 6 378 649 329 
 2 390 769 693 
 2 747 200 785 
 1 552 361 077 
 1 067 905 902 
 321 017 791 
 461 026 947 
 1 659 737 105 
 3 022 806 250 
 14 270 042 046 

 4 446 910 910 
 318 651 339 
 1 199 458 884 
 2 309 042 179 
 22 095 850 077 
 136 596 493 
 1 651 304 984 
 2 072 642 795 
 10 669 617 389 
 18 047 137 597 
 14 371 367 371 
 176 289 632 
 185 803 783 
 266 837 405 
 254 133 890 
 915 038 321 
 56 699 730 
 6 294 174 245 
 2 349 306 043 
 2 705 502 259 
 1 527 960 076 
 1 051 655 237 
 316 200 393 
 453 852 073 
 1 633 061 970 
 2 973 502 645 
 13 961 715 629 

 4 390 488 352 
 293 143 638 
 1 223 785 422 
 2 266 698 313 
 22 174 684 364 
 168 181 465 
 1 635 073 079 
 2 012 841 276 
 10 259 967 494 
 17 558 049 732 
 14 505 207 714 
 172 731 514 
 194 006 510 
 270 938 730 
 283 183 213 
 916 214 240 
 56 165 063 
 6 282 581 555 
 2 381 673 253 
 2 810 883 270 
 1 469 429 185 
 1 134 803 437 
 312 679 822 
 512 062 631 
 1 652 037 445 
 3 073 512 103 
 14 168 350 404 

3.91% 
0.26% 
1.09% 
2.02% 
19.77% 
0.15% 
1.46% 
1.79% 
9.15% 
15.65% 
12.93% 
0.15% 
0.17% 
0.24% 
0.25% 
0.82% 
0.05% 
5.60% 
2.12% 
2.51% 
1.31% 
1.01% 
0.28% 
0.46% 
1.47% 
2.74% 
12.63% 

-56 422 558 
-25 507 701 
+24 326 538 
-42 343 866 
+78 834 287 
+31 584 972 
-16 231 905 
-59 801 519 
-409 649 895 
-489 087 865 
+133 840 343 
-3 558 118 
+8 202 727 
+4 101 325 
+29 049 323 
+1 175 919 
-534 667 
-11 592 690 
+32 367 210 
+105 381 011 
-58 530 891 
+83 148 200 
-3 520 571 
+58 210 558 
+18 975 475 
+100 009 458 
+206 634 775 

- 51 413 076 
- 3 961 474 
- 17 404 835 
- 35 701 569 
- 365 730 557 
- 1 970 610 
- 24 700 796 
- 32 113 769 
- 159 236 471 
- 291 323 932 
- 231 910 980 
- 2 337 696 
- 2 632 799 
- 3 862 601 
- 4 109 800 
- 13 873 755 
- 760 636 
- 84 475 084 
- 41 463 650 
- 41 698 526 
- 24 401 001 
- 16 250 665 
- 4 817 397 
- 7 174 874 
- 26 675 135 
- 49 303 604 
- 308 326 417 

 114 287 945 060 

 112 440 313 349 

 112 179 373 224 

100% 

- 260 940 125 

- 1 847 631 711 

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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, adopted at a meeting of the Advisory 
Committee on Own Resources (ACOR). 

The  revision  concerns  the  forecast  of  TOR  (customs  duties,  agricultural  duties  and  sugar 
levies)  to  be  paid  to  the  budget  in  2007  as  well  as  the  forecast  of  the  2007  VAT  and  GNI 
bases. The forecast in the Budget 2007 (and in the AB 1/2007, PDAB 2/2007, PDAB 3/2007 
and PDAB 4/2007) was established at the 136th ACOR meeting on 19 May 2006. The revised 
forecast  taken  into  account  in  the  present  PDAB  5/2007  was  adopted  at  the  meeting  of  the 
139th  ACOR  meeting  on  16  May  2007.  The  use  of  an  updated  forecast  of  own  resources 
improves  the  accuracy  of  the  payments  that  Member  States  are  asked  to  make  during  the 
budgetary year and reduces the unavoidable forecasting errors from the previous year. 

As compared to the forecast agreed in May 2006, the forecast agreed in May 2007 has been 
revised as follows: 

–  The 

total 

forecast  of  2007  net  agricultural  duties 

is  nearly  unchanged  at 
EUR 1 486,8 million (after deduction of 25 % in collection costs). Only the breakdown of 
this  total  forecast  between  Member  States  has  been  updated,  using  the  latest  information 
available on collected 2006 net agricultural duties. 

–  The 

total  forecast  of  2007  net  sugar 

levies  was  dramatically  reduced  from 
EUR 533,1 million  to  - EUR 37,7 million  (after  deduction  of  25 %  in  collection  costs), 
notably  following  the  payment  in  June  2006  of  a  higher  than  needed  instalment  for  the 
balance of 2005/2006 levies. Consequently, the residual amount, to be paid in April 2007 
for this balance, was eventually negative (i.e. a reimbursement to Member States, in order 
to adjust for the excessive instalment paid in the previous year). The revised total forecast 
and breakdown of forecast between Member States were provided by DG AGRI. 

–  Total 2007 net customs duties are now forecast at EUR 15 083,8 million (after deduction 
of  25  %  in  collection  costs),  which  represents  a  decrease  by  – 1,3 %  relative  to  the  May 
2006  forecast  of  EUR 15 287,9 million.  The  main  reason  for  this  decrease  is  a  lower 
forecast  of  the  weighted  average  tariff  (1,54 %,  as  compared  to  1,61 %  last  year).  The 
forecast  was  made  on  a  Member  State  basis,  using  DG  ECFIN  forecast  growth  rates  of 
extra EU imports as published in the spring 2007 economic forecasts on 7 May 2007. Total 
2007 net TOR are thus now forecast at EUR 16 532,9 million (after deduction of 25 % in 
collection  costs),  which  represents  a  decrease  by  – 4,5 %  (i.e.  by  – EUR 774,8 million) 
relative to the May 2006 forecast of EUR 17 307,7 million. 

–  The total 2007 EU uncapped VAT base is now forecast at EUR 5 713 353,3 million, which 
the  May  2006  forecast  of 
represents  an 
EUR 5 527 693,0 million.  The  total  2007  EU  capped  VAT  base6  is  forecast  at 
EUR 5 519 105,65 million,  which  represents  an  increase  of  + 3,2 %  as  compared  to  the 
May 2006 forecast of EUR 5 347 310,9 million. 

increase  of  + 3,4 %  as  compared 

to 

6 

In accordance with Council Decision (EC, Euratom) No 2000/597; if the VAT base of a Member State 
exceeds 50 % of its GNI, then it is capped at these 50 %. For the PDAB 5/2007, 13 Member States will 
have their VAT base capped at 50 % of GNI: Bulgaria, the Czech Republic, Estonia, Ireland, Greece, 
Spain, Cyprus, Latvia, Luxembourg, Malta, Poland, Portugal and Slovenia. 

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–  The total 2007 EU GNI base is forecast at EUR 12 040 588,0 million, which represents an 
increase of + 3,0 % as compared to the May 2006 forecast of EUR 11 694 234,0 million. 

The  exchange  rates  of  29  December  2006  have  been  used  for  converting  the  forecast  VAT 
and  GNI  bases  in  national  currency  into  euro  (for  the  thirteen  Member  States  that  are  not 
members of the euro zone). This avoids distortions since it is this rate which is used to convert 
budgeted  own  resources  payments  from  euro  into  national  currency  when  the  amounts  are 
called in (as stipulated in Article 10(3) of Council Regulation (EC, Euratom) No 1150/2000). 

The revised forecasts of TOR (customs duties, agricultural duties and sugar levies), uncapped 
VAT bases and GNI bases for 2007, as adopted at the 139th ACOR meeting on 16 May 2007, 
are set out in the following table (rounded figures): 

Revised forecasts of TOR, VAT and GNI bases for 2007 (in EUR million) 

Agricultural 
Duties 
(75 %) 

Sugar 
levies 
(75 %) 

Customs 
duties 
(75 %) 

Uncapped 
VAT bases 

GNI bases 

Capped 
VAT base 

BE 
BG 
CZ 
DK 
DE 
EE 
IE 
EL 
ES 
FR 
IT 
CY 
LV 
LT 
LU 
HU 
MT 
NL 
AT 
PL 
PT 
RO 
SI 
SK 
FI 
SE 
UK 

EU 

 16.2 
 8.9 
 5.9 
 36.1 
 195.6 
 0.8 
 0.7 
 9.7 
 51.9 
 111.3 
 153.4 
 3.8 
 1.1 
 2.2 
 0.6 
 4.3 
 1.2 
 263.9 
 3.9 
 41.3 
 24.7 
 26.5 
 0.3 
 1.3 
 6.6 
 17.5 
 497.1 

- 4.9 
 0.0 
 8.0 
- 2.6 
- 22.0 
 17.1 
- 0.5 
- 0.9 
- 1.3 
- 20.6 
- 7.1 
 7.5 
 1.6 
 0.0 
 0.0 
- 0.1 
 0.5 
- 5.0 
- 2.0 
- 2.8 
- 0.2 
 0.0 
- 0.2 
 2.5 
- 0.4 
- 1.0 
- 3.3 

 1 580.9 
 40.7 
 186.9 
 286.7 
 3 034.6 
 22.6 
 216.8 
 220.7 
 1 247.4 
 1 269.7 
 1 505.6 
 30.5 
 24.2 
 41.3 
 20.3 
 114.8 
 10.1 
 1 506.6 
 257.2 
 266.3 
 95.9 
 134.3 
 37.8 
 65.7 
 134.8 
 406.1 
 2 325.3 

 138 293.6 
 16 206.6 
 67 170.4 
 93 824.1 
 1 007 267.3 
 8 528.4 
 84 338.8 
 118 972.7 
 634 969.3 
 903 323.3 
 595 885.9 
 12 177.1 
 10 511.5 
 12 060.4 
 16 734.5 
 38 359.4 
 4 040.5 
 268 580.2 
 117 479.1 
 145 342.9 
 94 027.8 
 47 894.0 
 17 654.8 
 22 616.8 
 75 868.6 
 143 333.1 
 1 017 892.2 

 328 116.5 
 27 560.3 
 115 946.8 
 229 315.4 
 2 387 346.7 
 14 413.2 
 160 630.4 
 202 577.4 
 1 015 698.4 
 1 848 336.0 
 1 512 833.5 
 14 864.9 
 18 811.4 
 26 044.3 
 29 823.1 
 92 613.4 
 5 047.3 
 550 059.7 
 263 108.8 
 283 485.7 
 152 802.8 
 113 604.0 
 31 193.6 
 50 867.4 
 175 537.6 
 332 202.6 
 2 057 746.8 

 138 293.6 
 13 780.2 
 57 973.4 
 93 824.1 
 1 007 267.3 
 7 206.6 
 80 315.2 
 101 288.7 
 507 849.2 
 903 323.3 
 595 885.9 
 7 432.5 
 9 405.7 
 12 060.4 
 14 911.6 
 38 359.4 
 2 523.7 
 268 580.2 
 117 479.1 
 141 742.9 
 76 401.4 
 47 894.0 
 15 596.8 
 22 616.8 
 75 868.6 
 143 333.1 
 1 017 892.2 

 1 486.8 

- 37.7 

 15 083.8 

 5 713 353.3 

 12 040 588.0 

 5 519 105.7 

3. 

2003 UK CORRECTION AND 2006 UK CORRECTION 

The correction of budgetary imbalances in favour of the United Kingdom (UK correction) to 
be budgeted in the present PDAB concerns two years: 2003 and 2006. As the UK correction 
of a certain year is to be financed in the following year, all 27 Member States participate in 
the financing of the 2006 UK correction. The financing of the 2003 UK correction, however, 
only concerns the 25 countries that were Member States in 2004. 

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The  2003  UK  correction  and  2006  UK  correction  are  all  subject  to  the  rules  of  Council 
Decision  (EC,  Euratom)  No  2000/597  and  its  accompanying  working  document,  the  2000 
Calculation Method7. 

Pursuant to the above rules, the net “windfall gains” of the UK resulting from the increase as 
from 2001 in the percentage of TOR retained by Member States as a compensation for their 
collection  costs  are  neutralised  in  the  calculation  of  the  UK  correction,  as  well  as  pre-
accession  expenditure  (PAE)  paid  under  appropriations  for  payments  relating  to  the  year 
preceding the enlargement. The same adjustment for PAE will be followed at the occasion of 
each future enlargement of the Union. 

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.  These  financing  rules  have  an  impact  on  the 
uniform rate of call of VAT, calculated as the difference between the maximum rate of call 
(0,50 % of the capped VAT base) and the frozen rate (whose calculation is based on the 2006 
UK correction). 

The  difference  between  the  2003  UK  correction  (definitive  amount)  and  the  amount 
previously budgeted (in 2004) as well as the result of the entire recalculation of the financing 
of  the  whole  amount  of  the  2003  UK  correction  on  the  basis  of  the  latest  data  for  2004  is 
entered  under  chapter  35  of  the  budget,  without  any  impact  on  the  uniform  rate  of  call  of 
VAT. 

The amount of the first update of the 2006 UK correction is entered under chapter 15 of the 
PDAB  5/2007,  as  a  replacement  of  the  amount  of  the  provisional  amount  of  the  2006  UK 
correction entered under chapter 15 of the Budget 2007. 

3.1. 

Calculation of the corrections 

In  the  present  PDAB,  the  calculation  and  financing  of  the  first  update  of  the  2006  UK 
correction, as well as of the definitive amount of the 2003 UK correction are entered. 

As far as the 2004 and 2005 UK corrections are concerned, the Commission shall (according 
to the 2000 Calculation Method) propose to budget an update if it differs significantly from 
the  corresponding  previously  budgeted  calculation.  According  to  the  Commission’s  current 
calculations,  the  amount  of  the  2004  and  2005  UK  corrections  do  not  differ  significantly 
from, respectively, the second update of the 2004 UK correction and from the first update of 
the  2005  UK  correction,  both  entered  in  the  AB  4/2006.  Consequently,  an  update  is  not 
proposed for budgeting in the present PDAB 5/2007. 

3.1.1. 

2006 UK correction 

The following table summarises the changes between the provisional amount of the 2006 UK 
correction  entered  in  the  budget  2007  and  the  first  update  of  the  2006  UK  correction  to  be 
entered in the PDAB 5/2007. 

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Council  Decision  (EC,  Euratom)  n°  2000/597  of  29  September  2000  on  the  system  of  the  EU  own  resources, 
available on: http://europa.eu.int/eur-lex/pri/en/oj/dat/2000/l_253/l_25320001007en00420046.pdf  
Commission working document of 21 September 2000 "Calculation, financing, payment and entry in the budget of 
the correction of budgetary imbalances in accordance with Articles 4 and 5 of Council Decision [2000/597] on the 
system  of 
the  2000 Calculation Method  and  available  on: 
referred  as 
http://ec.europa.eu/budget/library/documents/revenue_expenditure/own_resources/calc_own_res_en.pdf 

the  EU  own 

resources” 

8 

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2006 UK correction 

Provisional 
Budget 2007 

1st update  
PDAB 5/2007 

Difference 

(1) 

UK share of notional uncapped VAT base 

17.5894% 

17.6888% 

+ 0.0994% 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

UK share of PAE-adjusted total allocated 
expenditure 

8.6985% 

8.6868% 

- 0.0117% 

= (1) - (2) 

8.8909% 

9.0020% 

+ 0.1111% 

Total allocated expenditure 

100 442 931 519 

96 930 892 220 

- 3 512 039 299 

Pre-accession expenditure (PAE)  

1 815 757 317 

1 837 927 773 

+ 22 170 456 

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

98 627 174 202 

95 092 964 446 

- 3 534 209 756 

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

5 787 446 312 

5 649 772 605 

- 137 673 707 

UK advantage 

 528 700 814 

 339 974 729 

- 188 726 085 

Core UK correction = (7) - (8) 

5 258 745 498 

5 309 797 876 

+ 51 052 377 

(10) 

TOR windfall gains 

(11)  UK correction = (9) - (10) 

 7 542 868 

- 21 571 097 

- 29 113 965 

5 251 202 631 

5 331 368 973 

+ 80 166 342 

The  first  update  of  the  2006  UK  correction  is  EUR 80,2 million  higher  as  compared  to  the 
provisional amount of the 2006 UK correction entered in the budget 2007. 

3.1.2. 

2003 UK correction 

The table hereafter summarises the changes between the 1st update of the 2003 UK correction 
entered in the AB 8/2004 and the definitive amount of the 2003 UK correction to be entered 
in the PDAB 5/2007. 

2003 UK correction 

1st update 
AB 8/2004 

Definitive 
PDAB 5/2007 

Difference 

(1) 

UK share of notional uncapped VAT base 

18.4963% 

18.4058% 

- 0.0905% 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

UK share of PAE-adjusted total allocated 
expenditure 

= (1) - (2) 

Total allocated expenditure 

Pre-accession expenditure (PAE)  

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

7.6761% 

7.5941% 

- 0.0820% 

10.8202% 

10.8117% 

- 0.0085% 

82 025 811 437 

81 204 065 722 

- 821 745 715 

 0 

 0 

+ 0 

82 025 811 437 

81 204 065 722 

- 821 745 715 

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

5 857 732 062 

5 794 476 156 

- 63 255 907 

UK advantage 

 447 826 886 

 489 158 724 

+ 41 331 838 

Core UK correction = (7) - (8) 

5 409 905 176 

5 305 317 431 

- 104 587 745 

(10) 

TOR windfall gains 

(11)  UK correction = (9) - (10) 

 18 346 139 

 20 223 422 

+ 1 877 283 

5 391 559 038 

5 285 094 010 

- 106 465 028 

The definitive amount of the 2003 UK correction is EUR 106,5 million lower as compared to 
the first update of the 2003 UK correction entered in the AB 8/2004. The difference is due to 
the combined effect of five factors, which can be quantified as follows: 

EN 

9 

   EN 

 
 
 
–  The decrease in the UK share of uncapped VAT base decreases the 2003 UK correction by 

around EUR 49,0 million. 

–  The  decrease  in  the  UK  share  of  PAE-adjusted  total  allocated  expenditure  increases  the 

2003 UK correction by around EUR 44,4 million. 

–  The  decrease  in  PAE-adjusted  total  allocated  expenditure  decreases  the  2003  UK 

correction by around EUR 58,7 million. 

–  The  increase  in  the  so-called  “UK  advantage”  decreases  the  2003  UK  correction  by 

EUR 41,3 million. 

–  The increase in the so-called “TOR windfall gains” decreases the 2003 UK correction by 

EUR 1,9 million. 

3.2. 

Entry in the PDAB 5/2007 of the first update of the 2006 UK correction and of 
the definitive amount of the 2003 UK correction 

3.2.1. 

2006 UK correction (chapter 15) 

The amount of the UK correction to be budgeted in chapter 15 of the present PDAB 5/2007 is 
the amount of the 1st update of the 2006 UK correction (i.e. EUR 5 331 368 973 replacing the 
EUR 5 251 202 631 entered in the budget 2007). 

This amount is to be financed along the revised 2007 GNI bases of the present PDAB 5/2007. 
The budgeting of this amount in chapter 15 is summarised below: 

BE 
BG 
CZ 
DK 
DE 
EE 
IE 
EL 
ES 
FR 
IT 
CY 
LV 
LT 

2006 UK correction 
chapter 15 

247 212 185
20 764 704
87 357 575
172 772 662
318 742 577
10 859 310
121 023 454
152 627 502
765 255 697
1 392 588 247
1 139 811 242
11 199 633
14 173 037

19 622 507

LU
HU
MT
NL
AT
PL
PT
RO
SI
SK
FI
SE
UK
Total 

22 469 561 
69 777 536 
3 802 778 
73 440 295 
35 128 529 
213 586 087 
115 125 921 
85 592 444 
23 502 134 
38 324 928 
132 254 957 
44 353 471 
-5 331 368 973 

0 

3.2.2. 

2003 UK correction (chapter 35) 

The financing of the definitive amount of the 2003 UK correction is entered in chapter 35 of 
the present PDAB 5/2007 along the 2004 GNI (and VAT) bases8 as known at the end of 2006. 
The amount budgeted in chapter 35 includes: 

8 

Reduced by 1/3 for the 10 Member States which joined the EU on 1 May 2004. 

EN 

10 

   EN 

 
                                                 
–  the adjustment as regards the direct effect, i.e. the difference between what each Member 
State should pay for the definitive amount of the 2003 UK correction (along the 2004 GNI 
bases9 as known at the end of 2006) and the corresponding amounts previously budgeted 
(i.e. the payments for the financing of the 1st update of the 2003 UK correction budgeted 
in the AB 8/2004), 

–  the adjustment as regards the indirect effect, i.e. the difference between the implicit impact 
on  Member  States’  VAT  and  GNI  payments  of  the  definitive  amount  of  the  2003  UK 
correction  (along  the  2004  VAT  and  GNI  bases10  as  known  at  the  end  of  2006)  and  the 
implicit impact11 on Member States’ VAT and GNI payments of the 1st update of the 2003 
UK correction in the AB 8/2004 (along the 2004 VAT and GNI bases12 in the AB 8/2004). 

9 
10 
11 

12 

Reduced by 1/3 for the 10 Member States which joined the EU on 1 May 2004. 
Reduced by 1/3 for the 10 Member States which joined the EU on 1 May 2004. 
Due  to  the  effect  of  the  UK correction  on  the  uniform  rate  of  call  of  VAT  (reduced  by  the  ‘frozen  rate’)  and 
therefore also on the uniform rate of call of GNI (increased to compensate for the reduced VAT payments). 
Reduced by 1/3 for the 10 Member States which joined the EU on 1 May 2004. 

EN 

11 

   EN 

 
                                                 
The financing of the definitive amount of the 2003 UK correction in chapter 35 of the present PDAB 5/2007 is summarised below: 

Definitive amount 
(direct effect along 2004 
GNI bases as known at 
end 2006) 

1st update (direct effect 
budgeted in AB 8/2004, i.e. 
along 2004 GNI bases as of 
AB 8/2004) 

Adjustment 
direct effect 

Definitive amount (indirect effect on 
VAT/GNI contributions in the 2004 
budget, as recalculated at end 2006) 

1st update 
(indirect effect on VAT/GNI 
contributions in the AB 8/2004) 

Adjustment 
indirect effect 

TOTAL 
(to be budgeted in 
chapter 35 of 
PDAB 5/2007) 

(1) 

(2) 

(3) = (1) - (2) 

(4) 

(5) 

(6) = (4) - (5) 

(7) = (3) + (6) 

BE 

BG 

CZ 

DK 

DE 

EE 

IE 

EL 

ES 

FR 

IT 

CY 

LV 

LT 

LU 

HU 

MT 

NL 

AT 

PL 

PT 

RO 

SI 

SK 

FI 

SE 

UK 

 265 454 902 

--- 

 49 540 058 

 177 715 503 

 341 499 660 

 5 355 013 

 113 359 419 

 152 756 186 

 748 626 345 

1 510 366 341 

1 249 116 533 

 7 336 503 

 6 624 206 

 10 740 845 

 20 091 572 

 46 474 216 

 2 598 322 

 78 108 086 

 36 285 794 

 117 499 649 

 127 114 878 

--- 

 15 618 800 

 20 363 761 

 138 679 572 

 43 767 846 

 271 066 206 

 - 5 611 304 

--- 

 50 571 316 

 185 072 230 

 355 741 366 

 4 929 651 

 113 194 720 

 157 940 375 

 752 373 534 

1 545 977 063 

1 279 773 409 

 7 695 268 

 6 101 026 

 10 884 455 

 21 172 445 

 46 817 389 

 2 819 539 

 75 423 495 

 37 537 166 

 116 389 760 

 126 607 709 

--- 

 16 342 578 

 20 235 562 

 141 167 543 

 45 725 232 

--- 

 - 1 031 258 

 - 7 356 727 

 - 14 241 706 

+ 425 362 

+ 164 699 

 - 5 184 189 

 - 3 747 189 

 - 35 610 722 

 - 30 656 876 

 - 358 765 

+ 523 180 

 - 143 611 

 - 1 080 873 

 - 343 173 

 - 221 217 

+ 2 684 591 

 - 1 251 372 

+ 1 109 889 

+ 507 169 

--- 

 - 723 778 

+ 128 198 

 - 2 487 971 

 - 1 957 386 

-5 285 094 010 

-5 391 559 038 

+ 106 465 028 

Total 

0 

0 

0 

+ 25 838 240 

--- 

 - 5 048 512 

+ 25 800 355 

+ 100 090 843 

 - 545 717 

 - 11 552 196 

 - 15 567 029 

 - 76 290 776 

 - 65 397 186 

+ 184 976 832 

 - 747 646 

+ 639 662 

+ 866 191 

 - 2 047 486 

+ 1 679 807 

 - 264 789 

 - 6 046 763 

+ 6 430 954 

 - 10 411 978 

 - 12 953 983 

--- 

 - 1 591 676 

+ 2 696 545 

+ 9 591 269 

+ 14 611 995 

 - 164 756 955 

0 

+ 34 980 590 

 - 9 142 350 

 - 14 753 654 

--- 

 - 4 471 649 

+ 28 450 374 

+ 110 399 264 

 - 435 893 

 - 10 008 976 

 - 13 965 504 

 - 66 526 851 

 - 35 300 335 

+ 130 952 957 

 - 680 436 

+ 288 078 

+ 204 186 

 - 1 872 123 

 - 4 139 717 

 - 249 311 

 - 22 329 988 

 - 2 694 754 

 - 10 291 490 

 - 11 194 987 

--- 

 - 1 445 054 

+ 313 878 

+ 7 322 207 

+ 15 008 514 

 - 142 312 980 

0 

--- 

 - 576 863 

 - 2 650 019 

 - 10 308 421 

 - 109 824 

 - 1 543 220 

 - 1 601 525 

 - 9 763 925 

 - 30 096 851 

+ 54 023 874 

 - 67 210 

+ 351 584 

+ 662 005 

 - 175 362 

+ 5 819 524 

 - 15 478 

+ 16 283 225 

+ 9 125 708 

 - 120 489 

 - 1 758 995 

--- 

 - 146 622 

+ 2 382 667 

+ 2 269 061 

 - 396 520 

--- 

 - 1 608 121 

 - 10 006 747 

 - 24 550 127 

+ 315 538 

 - 1 378 521 

 - 6 785 714 

 - 13 511 113 

 - 65 707 572 

+ 23 366 998 

 - 425 975 

+ 874 764 

+ 518 395 

 - 1 256 235 

+ 5 476 350 

 - 236 695 

+ 18 967 817 

+ 7 874 336 

+ 989 400 

 - 1 251 826 

--- 

 - 870 400 

+ 2 510 865 

 - 218 910 

 - 2 353 906 

 - 22 443 975 

+ 84 021 053 

0 

0 

EN 

12 

EN