COMMISSION STAFF WORKING DOCUMENT Financing the EU budget: report on the operation of the own resources system Accompanying the document Proposal of a Council Decision on the system of Own Resources of the European Union
Date: 2018-05-02
Institutions: European Commission, Secretariat-General
Subjects: CCT duties, EU Emissions Trading Scheme, EU budget, GNP contribution, VAT resource, corporation tax, financial control, packaging product, plastics, waste

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 2.5.2018 SWD(2018) 172 final  COMMISSION STAFF WORKING DOCUMENT Financing the EU budget: report on the operation of the own resources system Accompanying the document Proposal of a Council Decision on the system of Own Resources of the European Union {COM(2018) 325 final}  
 
 
EXECUTIVE SUMMARY ................................................................................................. 3 

PART 1: AN OVERVIEW OF THE EU FINANCING SYSTEM ..................................... 5 

1.  KEY FACTS ABOUT OWN RESOURCES .............................................................. 5 

1.1.  The EU budget has remained stable over the past two decades... ..................... 5 

1.2.  … but the structure of the revenue side has changed over time and is 

dominated by the Gross National Income–based contribution .......................... 6 

1.3.  The  system  has  proved  successful  in  providing  the  EU  with  stable 

revenues, but has been difficult to reform ......................................................... 8 

1.4.  The system of rebates and corrections has become complex over time .......... 10 

2.  RECENT  CONTRIBUTIONS  ABOUT  THE  REFORM  OF  THE  OWN 

RESOURCES SYSTEM ........................................................................................... 11 

2.1.  Report of the High Level Group on Own Resources ...................................... 11 

2.2.  The Commission Reflection Paper on the future of EU finances ................... 12 

2.3.  The  Multiannual  Financial  Framework  communication  as  a 

contribution to the Leader's discussion ........................................................... 12 

3.  FINANCING THE EU BUDGET IN A GLOBALISING CONTEXT .................... 13 

3.1.  The revenue side could contribute to addressing the budgetary gap ............... 13 

3.2.  Economic developments challenge the national taxation and statistical 

systems ............................................................................................................ 13 

3.3.  Rethinking efficiency and equity between the EU and Member States .......... 14 

4.  SUMMARY .............................................................................................................. 15 

PART 2: REFORMING THE EU BUDGET REVENUE ................................................ 16 

1.  ASSESSING  THE  EXISTING  OWN  RESOURCES:  THE  NEED  TO 

MODERNISE ............................................................................................................ 16 

1.1.  Traditional Own Resources (customs duties) .................................................. 16 

1.2.  Gross National Income-based Own Resource ................................................. 18 

1.3.  Simplifying Member States' contributions: reform of the Value Added 

Tax-based Own Resource ................................................................................ 19 

1.3.1.  Rationale ............................................................................................ 19 

1.3.2.  Objective of the reform ..................................................................... 20 

1.3.3.  How to reform the Value Added Tax -based Own Resource? .......... 21 

1.3.4.  Quantification .................................................................................... 22 

2.  PROPOSING A BASKET OF NEW OWN RESOURCES LINKED TO EU 

POLICIES ................................................................................................................. 23 

2.1.  Common Consolidated Corporate Tax Base ................................................... 23 

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2.1.1.  Rationale ............................................................................................ 23 

2.1.2.  How would it work? .......................................................................... 23 

2.1.3.  Estimated revenues ............................................................................ 24 

2.2.  Own  Resource  based  on  the  Auctioning  revenue  from  the  EU 

Emissions Trading System .............................................................................. 24 

2.2.1.  Rationale ............................................................................................ 24 

2.2.1.  How would it work? .......................................................................... 25 

2.2.2.  Estimated revenues ............................................................................ 26 

2.3.  Own Resource contribution based on Plastic Packaging Waste ..................... 26 

2.3.1.  Rationale ............................................................................................ 26 

2.3.2.  How would it work? .......................................................................... 27 

2.3.3.  Estimated revenues ............................................................................ 28 

3.  MAKING BETTER USE OF ‘OTHER REVENUES’ ............................................. 28 

3.1.  Other revenues: a wide range of sources of revenues ..................................... 28 

3.2.  Mapping other future revenues ........................................................................ 30 

4.  PHASING OUT CORRECTIONS ............................................................................ 32 

5.  SUMMARY .............................................................................................................. 33 

PART  3:  A  BASKET  OF  OWN  RESOURCES:  BUILDING  ON 
COMPLEMENTARITIES  TO  ENHANCE  FISCAL  COHERENCE, 
RESILIENCE AND FAIRNESS ............................................................................... 34 

1.  TIMING AND PHASING IN OF NEW OWN RESOURCES ................................ 34 

2.  COMPLEMENTARITIES  WITH  NATIONAL  BUDGETS:  INCREASED 

FISCAL COHERENCE ON THE REVENUE SIDE ............................................... 36 

2.1.  Complementarities  between  EU  and  national  level:  Structure  of  the 

budget .............................................................................................................. 36 

2.2.  Complementarities  between  the  EU  and  the  national  level:  the 

cyclicality of the basket of Own Resources .................................................... 39 

3.  THE IN-BUILT BURDEN-SHARING MECHANISM OF EU FINANCING ....... 40 

4.  REPORTING  EU  CONTRIBUTIONS 

IN  NATIONAL  BUDGETS: 

HETEROGENEITY ACROSS MEMBER STATES ............................................... 42 

5.  SUMMARY .............................................................................................................. 44 

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EXECUTIVE SUMMARY 

This  staff  working  document  accompanies  the  Commission  proposal  for  a  new  Own 
Resources  Decision  and  substantiates  the  key  novelties  therein.  It  takes  stock  of  the 
reform debate and provides background information especially as regards the new Own 
Resources proposed. 

Part  I  recapitulates  the  evolution  of  the  EU  budget's  revenue  side.  The  EU  financing 
system based on the Own Resources Decision has in essence remained stable over time 
and  has  provided  reliable  sources  of  revenue  to  the  EU  budget.  However,  the 
composition of Own Resources has evolved to rely increasingly on national contributions 
alongside which a system of rebates and corrections emerged, making the overall system 
complex and difficult to explain to non-experts. Moreover, only customs duties currently 
display  a  clear  link  to  EU  policies  and  competences.  The  EU  added  value  requirement 
has  not  been  applied  systematically  to  the  Own  Resources  system.  There  have  been 
repeated  calls  for  a  better  articulation  of  the  EU's  political  priorities,  its  key  policy 
objectives and the system of financing the EU budget. 

Since 1988, when the Commission launched the Single Market project and then enlarged 
to new countries, no new Own Resources have been introduced. The new Own Resource 
agreed upon at that time – based on Gross National Product – aimed to ensure financial 
autonomy and to balance an expenditure-driven budget. Since then, the reforms proposed 
have  failed  for  various  reasons,  amongst  which  the  perceived  merits  of  a  simple  and 
stable  system.  During  the  economic  and  financial  crisis,  the  proposals  on  new  Own 
Resources  –  Value  Added  Tax  and  the  Financial  Transaction  Tax  –  did  not  reach 
consensus between Member States.  

The case for a reform of the EU financing system is compelling; a momentum exists as a 
consequence  of  the  United  Kingdom's  withdrawal  and  the  discontinuation  of  the 
correction for the United Kingdom. In addition, economic developments are challenging 
national  fiscal  authorities,  as  rising  intangible  assets  and  further  digitalisation  have 
highlighted the inadequacy of current national tax frameworks, while large multinational 
companies which greatly benefit from the Single Market exploit the different national tax 
regimes  to  minimise  their  tax  liabilities.  Climate  change  and  global  pollution 
consequences cannot be seen in isolation either and can only be properly addressed at EU 
level. Viable alternative, or supplementary, revenue sources with a manifest link to EU 
policies have been identified. 

Part  II  analyses  how  the  revenue  side  of  the  EU  budget  can  be  reformed.  The  reform 
would build on the existing system, but aim to make it more flexible and responsive to 
national developments, while increasing the mutual absorption of shocks within the strict 
framework of budgetary discipline. First, the traditional Own Resources (mainly customs 
duties)  would  be  maintained,  but  collection  costs  would  be  decreased  to  10%.  Second, 
Gross National Income-based contributions would be maintained as a balancing resource, 
but its overall share would be decreased. Third, the current system of the Value Added 
Tax-based Own Resource  would be reformed  and simplified. Fourth, several new Own 
Resources  would  be  proposed,  based  on:  (i)  the  Common  Consolidated  Corporate  Tax 
Base;  (ii)  the  national  revenue  stemming  from  the  auctioning  in  the  framework  of  the 
European Emissions Trading System; and (iii) a national contribution calculated on the 
basis of the weight of plastic packaging waste that is not recycled. Finally, there would 
be some leeway to make better use of 'other revenues' accruing to the EU budget, like the 
fees arising from the European Travel Information and Authorisation System. 

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Part III analyses the merits of introducing a basket of Own Resources for the EU budget.  
The  new  basket  of  Own  Resources  would  provide  a  better  link  to  key  EU  policies 
(climate  change,  environmental  policy,  internal  market).  It  would  also  provide  some 
fresh money to the EU budget. While most of the proposed new revenue sources would 
not  create  entirely  new  public  revenue  streams,  they  are  clearly  linked  to  the  EU  level 
and thus reflect directly or indirectly the added value of EU policies. The diversification 
of  revenue  sources  would  also  result  in  making  the  Own  Resources  system  more 
resilient. Furthermore, the increasing of the cyclicality of the EU budget's revenue  side 
would strengthen the alignment with the relative economic performance of the Member 
States.  As  such,  the  role  of  the  Gross  National  Income-based  Own  Resource  as  a 
balancing item, would be more pronounced. 

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PART 1: AN OVERVIEW OF THE EU FINANCING SYSTEM 

The  EU  financing  system  based  on  the  Own  Resources  Decision  has  remained  stable 
over time and has provided reliable sources of revenues to the EU budget. However, the 
composition  of  Own  Resources  has  evolved  to  rely  increasingly  on  Gross  National 
Income contributions. In turn, this has led to a system of rebates and corrections which 
have  made  the  overall  system  less  transparent  and  difficult  to  explain  to  non-experts. 
Moreover, only the customs duties display a clear link to EU policies and competences. 
By contrast, the Gross National Income-based Own Resource does not display a clear EU 
added value. There have been repeated calls for a better articulation of the EU's political 
priorities, its key policy objectives and the system of financing the EU budget. Today, the 
case  for  a  reform  of  the  EU  financing  system  is  convincing  and  it  is  reinforced  by  the 
United  Kingdom's  withdrawal  and  discontinuation  of  the  correction  mechanism  for  the 
United Kingdom. 

Section 1 presents stylised facts and describes the evolution of Own Resources over time. 
Section  2 summarises recent  key contributions  – including the recommendations of the 
High Level Group on Own Resources – on the advantages, drawbacks and challenges of 
the current system and the opportunities for reform. Section 3 elaborates on the overall 
rationale for an Own Resource reform. Section 4 concludes. 

1.  KEY FACTS ABOUT OWN RESOURCES 

1.1.  The EU budget has remained stable over the past two decades... 

The  revenue  side  of  the  EU  budget  has  always  been  driven  by  the  changes  in 
spending.  The  overall  size  of  the  budget  is  confined  by  the  Multiannual  Financial 
Framework for 7 years. Multiannual Financial Framework ceilings for commitments and 
payments are agreed before the beginning of the seven-year period, usually with a stable 
time-profile.  The  medium-term  stability  of  expenditure  is  thus  matched  by  a 
predictability of revenue requirements. However, the Own Resources and other revenues 
only  have  to  cover  the  level  of  payments  appropriations  as  voted,  and  eventually  the 
executed  payments.  These  are  usually  below  the  level  of  the  ceilings,  albeit  in  varying 
proportion in individual years, thus determining a slightly more dynamic profile. 

The  EU  budget  has  increased  steadily  until  the  early  1990s  and  then  stagnated 
around 1% of Gross National Income (Figure 1). Expenditure has remained essentially 
focussed on two main broad domains – agriculture and cohesion. The broadening scope 
of  EU-level  actions  over  the  past  two  decades  has  not  been  matched  by  equivalent 
increases  of  resources.  This  has  made  increased  flexibility  and  efficient  spending 
necessary. 

The  stability  of  the  EU  budget  has  helped  weather  the  crisis.  This  in-built  stability 
has allowed EU-funded public investments and transfers – e.g. for training unemployed 
people or for urban and rural development  – to act as countercyclical forces during the 
depths of the 'great recession' that began in 2009, despite the relatively modest share of 
EU spending out of national governments' total expenditure (Figure 1)1. 

1   Merler S. (2016), Income convergence: did EU funds provide a buffer, Bruegel, Working Paper, Issue 
6,  2016.  The  author  finds  that  EU  funds  have  contributed  to  limiting  the  negative  effect  of  the 
economic and financial crisis, in particular in helping disadvantaged regions. See also Nunez Ferrer J. 
(2014), What are the effects of the EU budget: Driving force or drop in the Ocean. In EU Budget and 

5 

 
                                                 
 
Figure 1 - EU budget as a proportion of Gross National Income and of total public 
expenditure 

Source: European Commission Services own calculation based on Eurostat.  
Note: executed budget of the EU, with varying numbers of Member States over time (from EU-6 to EU-28). 

1.2.  …  but  the  structure  of  the  revenue  side  has  changed  over  time  and  is 

dominated by the Gross National Income–based contribution 

Under the present system, there are three main categories of Own Resource – Traditional 
Own  Resources,  the  Value  Added  Tax-based  resource  and  the  contributions  based  on 
Gross National Income – and some correction mechanisms. 

Traditional  Own  Resources  today  account  for  roughly  13%  of  the  EU  budget 
(Figure  2).  While  proceeds  from  Traditional  Own  Resources  sufficed  to  finance  large 
parts  of  the  budget  throughout  the  1970s,  their  share  decreased  progressively  and  was 
supplemented  by  other  Own  Resources.  Traditional  Own  Resources  stem  from  the 
functioning of the customs union and accrue directly to the EU budget. More specifically, 
they  consist  of  customs  duties  levied  on  imports  of  agricultural  and  non-agricultural 
products from third countries, at rates based on the Common Customs Tariff as well as 
anti-dumping  and  countervailing  duties2.  In  practice,  the  Member  States’  customs 
authorities collect the amounts on behalf of the EU, after deduction of 20 % retained as 
‘collection costs’3. 

The  Value  Added  Tax-based  Own  Resource  was  introduced  with  the  Own 
Resources  Decision  of  1970  and  became  the  main  source  of  revenue  as  of  1979, 
covering  around  50%  of  EU  expenditure,  before  decreasing  to  reach  10-12%  of  the 
present  EU  budget  (Figure  2).  Value  Added  Tax-based  Own  Resource  contributions 
derive from the application of a uniform call rate to  Member States’ Value Added Tax 
bases, set according to harmonised rules4. As Gross National Income gained ground as a 
basis  for  determining  Member  States'  contributions,  the  Value  Added  Tax-based  Own 
Resource  call  rate  was  progressively  reduced  to  the  current  level  of  0.3%.  The  Value 
Added  Tax  base  of  each  Member  State  is  currently  capped  at  50%  of  Gross  National 

National  Budgets:  Facts,  figures  and  Impact.  Study,  European  Parliament,  Directorate  General  for 
Internal Policies. 

2   Duties  levied  on  agricultural  products  were  identified  separately  over  the  period  1970-2008,  but  are 
now  grouped  with  customs  duties.  Until  30  September  2017,  when  the  production  quotas  for  sugar 
ended, traditional customs duties also included sugar levies. 

3   This percentage was 10% over the period 1970-2000, 25% from 2001 to 2013, and then 20% as from 

2014. 

4   The call rate was firstly fixed at 1% and later raised to 1.4%. 

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Income, to remedy the regressive aspects of the Value Added Tax-based resource, which 
penalises Member States with higher shares of consumption in final demand. Finally, for 
the  2014-2020  Multiannual  Financial  Framework,  the  call  rate  is  reduced  to  0.15%  for 
Germany, the Netherlands and Sweden. 

The  Own  Resource  based  on  Gross  National  Product  (later  replaced  by  Gross 
National  Income)  was  introduced  in  1988.  This  new  category  of  revenue  was 
considered as the most representative indicator of Member States economic activity and 
ability  to  pay5.  It  became  the  balancing  resource  and  was  expected  to  provide  the 
necessary financing of the budget within the Own Resource ceiling. Initially at 10% of 
total  revenue,  the  share  of  the  Gross  National  Income-based  contribution  increased  to 
reach around 70 %. 

In addition to  the  Own Resources,  the  EU  budget is  financed by ‘other revenues’. 
This  category  encompasses  a  wide  range  of  income  sources  such  as  taxes  paid  by  EU 
staff  on  their  salaries,  contributions  from  non-EU  countries  to  certain  EU  programmes, 
and fines paid by companies for breaching EU law. Any surplus from a financial year is 
also  entered  in  the  budget  for  the  following  year  as  revenue.  Although  the  proceeds  of 
some  of  these  sources  of  revenue  are  unpredictable  and  volatile  or  even  'one-off'  in 
nature, they are not a 'quantité négligeable'. 

Figure 2 – Composition of the EU budget, % of Gross National Income 

Source: European Commission Services, Financial reports (http://ec.europa.eu/budget/figures/interactive/index_en.cfm).  
Note: the corrections, lump sum reductions and adjustments granted to various countries (UK, DK, DE, NL, AT, SE) as well 
as the effects of the retro-active implementation of Own Resources Decisions are accounted for under 'Gross National Income 
Own Resource'; Traditional Own Resources are net of the share withheld by national administrations; 'Other revenues' include 
any  surpluses  from  either  the  European  Agriculture  Guarantee  and  Guidance  Fund-Guarantee  or  the  external  aid  guarantee 
fund (both nil since 2009). 

The  Gross  National  Income-based  contributions  are  the  keystone  of  the  Own 
Resources  system,  as  each  year  they  provide  the  revenue  required  to  balance  the  EU 
budget  (Table  1).  In  practice,  the  Gross  National  Income-based  Own  Resource  is 
calculated  in  two  steps.  First,  taking  account  of  'other  revenues',  the  proceeds  of 
traditional Own Resources and the Value Added Tax-based Own Resource are quantified 
on the basis of the forecasts given by the Member States and jointly endorsed. Second, 
the  amount  which  remains  to  cover  the  level  of  annual  payment  appropriations  is 
calculated and split into national contributions resulting from the application of a uniform 

5   European Union Public Finance (2014), 5th Edition.  

7 

 
 
                                                 
call rate to the Member States’ Gross National Income. On average, the call rate has been 
at 0.6% over the past two decades, but rising in recent years (0.7% over 2012-2016).  

Table 1– Gross National Income call rate 

TOTAL REVENUES  

TOTAL Own Resources (after 
corrections)  

GNI-based Own Resource (after 
corrections) 

€ bn 
% GNI 
€ bn 
% GNI 
€ bn 
% GNI 

2000 

2014 

2016 
2015 
 144,089 
92,795      143,940   146,027  
1.02% 
0.97% 
1.00% 
1.03% 
132,961   137,335   132,174  
88,040  
0.89% 
0.94% 
0.97% 
96,185  
99,284  
37,581  
0.65% 
0.68% 
0.41% 
0.65% 
0.69% 
0.41% 

0.96% 
97,922  
0.70% 
0.71% 

GNI call rate (before corrections) 
Source: European Commission Services.  
Note:  to  compute  the  Gross  National  Income-call  rate,  the  sum  of  all  other  Own  Resources  of  all  Member  States,  established  or 
forecast according to their specific rules, is subtracted from the total Own Resources needed to cover the annual payments of the EU. 
This yields the total Gross National Income-contribution needed in the year. Its ratio to the EU's Gross National Income is the call rate 
before corrections. 

1.3.  The  system  has  proved  successful  in  providing  the  EU  with  stable 

revenues, but has been difficult to reform 

The Treaty on the Functioning of the European Union introduced significant changes to 
the rules according to which the EU budget is financed, creating the opportunity to make 
the  implementation  of  the  Own  Resources  system  sufficiently  flexible  within  the 
framework and limits set out by the Own Resource decision (Box 1). 

The existing system has provided sufficient and stable revenues to the EU budget. It 
ensured timely and efficient financing, with the flexibility made necessary by the annual 
fluctuations of expenditure. Even in budget years marked by unforeseen changes in the 
level  of  payment  appropriations6,  the  adjustability  of  the  Gross  National  Income-based 
Own Resource allows for a swift follow-up in terms of providing the treasury means. On 
the other hand, under-execution compared to budgeted appropriations can lead to end-of-
year treasury surpluses.  

The  general  perception  that  the  revenue  side  of  the  budget  is  by  and  large 
functioning satisfactorily results in a very stable system, which has proved difficult 
to  reform.  Over  the  decades,  the  Own  Resources  system  has  only  been  amended 
incrementally and no new categories of Own Resources have been introduced since 1988, 
when  it  was  decided  to  introduce  a new  category  of  resource  based  on Member  States' 
Gross  National  Product.  At  that  time,  the  introduction  of  a  new  source  of  revenue  was 
justified by the inadequacy of the revenues to cover the Community's growing needs7.  

In  2011,  during  the  economic  crisis,  in  order  to  support  the  necessary  budgetary 
consolidation in Member States, the Commission proposed to simplify the Value Added 
Tax  Own  Resource  and  introduce  a  new  Own  Resource  based  on  the  Financial 
Transaction Tax. The new Own Resource based on the Financial Transaction Tax would 
have provided a new source of revenues for both EU and national budgets. The proposal 

6   For example, in 2013 or 2014, the pace of programme execution deviated from forecasts and amending 

budgets were adopted. 

7   European Union Public Finance (2014), 5th edition. 

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did  not  reach  a  consensus  among  Member  States,  although  the  need  for  reform  was 
acknowledged8.  

Recent  analyses  highlighted  significant  weaknesses  of  the  present  Own  Resources 
system  dominated  by  national  contributions9.  The  weaknesses  relate  to  the 
complicated  calculations  necessitated  by  the  system  of  rebates  and  corrections,  which 
reduce  transparency.  Moreover,  the  predominant  role  of  the  Gross  National  Income-
based  contribution  fosters  the  common  perception  that  EU  revenues  just  reflect  the 
Member States' capacity to pay and is hence used to justify the focus on net balances and 
the existence of corrections. The predominant weight of national contributions on overall 
EU  financing  fuels  the  expectation  that  the  EU  returns  a  'fair  share'  of  its  spending  to 
each Member State, in proportion to their contributions. This in turn has been identified 
as  one  element  hampering  a  more  consequential  reform  of  the  expenditure  side  in  line 
with a collective logic of European added value. 

Box 1 – Legal framework 

The legislative acts governing the Own Resources and their implementation are anchored under 
Title II (Financial Provisions) of Part Six (Institutional and Financial Provisions) of the Treaty on 
the Functioning of the European Union. This title sets out several 'special legislative procedures' 
for the different types of legal acts. It provides for a hierarchy of relevant acts with specific legal 
bases for the different components – i.e. the Own Resource decision, its implementing rules and 
the regulation on making the Own Resources available. 

Article 311 of the Treaty on the Functioning of the European Union sets out the key principles of 
EU financing: 

  First,  "without  prejudice  to  other  revenue,  the  budget  shall  be  financed  wholly  from  Own 
Resources". The revenue of the general budget of the EU can be divided into Own Resources 
and other revenue. 

  Secondly, the provisions related to the system of Own Resources are set out in a decision – the 
Own Resources decision – adopted unanimously by the Council after consulting the European 
Parliament, in accordance with a special legislative procedure that "shall not enter into force 
until  it  is  approved  by  the  Member  States  in  accordance  with  their  respective  constitutional 
requirements", to preserve national sovereignty in tax matters. The Treaty is explicit in that the 
Council "may establish new categories of Own Resources or abolish an existing category". 

  Thirdly,  the  Treaty  provides  –  as  a  new  element  –  that  the  Council,  acting  by  means  of 
regulations in accordance with a special legislative procedure, and after obtaining the consent 
of  the  European  Parliament,  may  lay  down  implementing  measures  for  the  Union's  Own 
Resources system "in so far as this is provided for in the [Own Resources] decision".  

In  addition,  Article  322§2  lays  down  provisions  on  the  methods  and  procedures  whereby  the 
budget revenue provided under the arrangements relating to the Union's Own Resources "shall be 
made available" to the Commission. 

8   Council Conclusion 7-8 February 2013. 
9   See  section  two  for  the  report  of  the  High  Level  Group  on  Own  Resources.  See  also  Benedetto  G. 
(2017),  Institutions  and  the  route  to  reform  the  European  Union's  budget  revenue  1970-2017, 
Empirica,  44:615-633;  Schratzenstaller  M.  et  al.(2014),  Own  Resource  EU  Taxes  as  Genuine  Own 
Resource  to  finance  the  EU  Budget  –  Pro,  cons  and  Sustainability-oriented  Criteria  to  evaluate 
Potential  Tax  Candidates.  FairTax  Working  Paper  Series,  n°3;  Schratzenstaller  M.,  Reform  Options 
for  the  EU's  System  of  Own  Resources,  Revue  de  l'OFCE,  n°132,  347-355;  European  Parliament, 
Report on reform of the EU's system of Own Resources (2017/2053(INI)), A8-0041/2018.  

9 

 
                                                 
1.4.  The system of rebates and corrections has become complex over time 

For  historical  reasons,  some  Member  States  benefit  from  rebates  and  corrections. 
Today,  the  bulk  of  EU  financing  relies  on  the  Gross  National  Income-based  and  the 
Value Added Tax-based Own Resources, but corrections have been introduced over time 
to  address  the  specific  budgetary  situation  of  certain  Member  States.  Unlike  Own 
Resources, corrections are not provided for in the Treaty but result instead from political 
agreements.  

The correction mechanism for the United Kingdom ('the UK rebate') was created to 
address  the  specific  situation  of  the  United  Kingdom  in  the  mid-1980s,  namely  a 
relatively low-income Member State with comparatively high payments into the budget 
and  comparatively  limited  payments  from  EU  funds.  The  Fontainebleau  European 
Summit in June 1984 concluded that "any Member State sustaining a budgetary burden 
which is excessive in relation to its relative prosperity may benefit from a correction at 
the  appropriate  time".10  The  most  important  of  these  mechanisms  was  'the  UK  rebate', 
which was at the time justified as these two cumulative criteria were fulfilled. First, the 
United  Kingdom  was  relatively  poorer  than  the  EU  average.  Secondly,  the  United 
Kingdom benefited less than the others from the EU budget, of which 70% were spent on 
agricultural subsidies. None of these two cumulative criteria are fulfilled today. 

As  a  legacy  of  'the  UK  Rebate'  and  the  Fontainebleau  logic,  other Member  States 
benefited from corrections in order to alleviate their net position. Together with 'the 
UK rebate', it was first decided that other net contributors would benefit from a reduction 
in  the  financing  of  'the  UK  rebate'.  From  1985,  Germany's  part  in  financing  the  UK 
correction was limited to two thirds of its normal share. Since 2002, Germany and also 
Austria, the Netherlands and Sweden have benefited from a permanent reduction in their 
contribution  to  'the  UK  rebate',  paying  25%  of  their  respective  share.  These  reductions 
are known as the "rebates on the rebate".  

In  addition  to  'the  UK  rebate',  an  increasing  number  of  other  corrections  have 
developed  over  time.  Building  on  the  rebate  of  the  rebate  example,  certain  Member 
States  have  argued  that  their  EU  budgetary  burden  is  excessive,  requesting  different 
forms  of  reduction  in  their  contribution.  Temporary  corrections  agreed  for  2014-2020 
include a reduced call rate on the Value Added Tax-based Own Resource for Germany, 
the Netherlands and Sweden and lump-sum reductions to Gross National Income-based 
contributions  for  Austria  (only  2014-2016),  the  Netherlands,  Sweden  and  Denmark. 
Although these corrections are not strictly related to 'the UK rebate', they are justified by 
the same logic of limiting net operating budgetary balances.  

Finally,  the  increase  in  collection  costs  for  custom  duties  (from  10%  to  25%  and 
eventually back to 20%) has resulted in reducing the financial contributions of Member 
States located at major entry points for imports into the EU (see Part II, Section 1). 

The amounts of corrections other than 'the UK rebate' itself exceeded a gross amount of 
on  average  EUR  5  billion  annually  over  the  first  five  years  of  the  current  Multiannual 
Financial Framework (Figure 3). 

10   Conclusions  of  the  European  Council  meeting  of  25-26  June  1984  in  Fontainebleau,  p.2  

(http://www.consilium.europa.eu/media/20673/1984_june_-_fontainebleau__eng_.pdf) 

10 

 
 
                                                 
Figure 3: Average annual corrections and rebates over the 2014-2018 period (EUR bn) 

 3,00

 2,50

 2,00

 1,50

 1,00

 0,50

 -

Rebate on the (UK) rebate

reduced GNI contribution

reduced call rate VAT own
resource

DE

NL

SE

DK

AT

Source: European Commission Services 
Note:  For the  reduced  GNI contributions,  the  gross  amount  is  used,  i.e.  not  subtracting  the share which  the  recipient  has  to  pay  to 
finance its own reduction. 

2.  RECENT CONTRIBUTIONS ABOUT THE REFORM OF THE OWN RESOURCES SYSTEM 

2.1.  Report of the High Level Group on Own Resources 

After the adoption of the Own Resources Decision 2014, the demand for reform of 
the revenue side of the EU budget persisted. A High Level Group on Own Resources 
was created as part of the final agreement on the Multiannual Financial Framework 2014-
2020  in  December  2013  when  the  Council,  the  European  Parliament  and  the  European 
Commission adopted a Joint Declaration on Own Resources. It stated that the question on 
Own Resources required further work and that a High Level Group would be convened 
in order to undertake a general review of the Own Resources system. On the basis of the 
work  of  the  High  Level  Group,  the  Commission  would  assess  if  new  Own  Resources 
initiatives would be appropriate with a view to possible reforms to be considered for the 
period  of  the  next  multiannual  financial  framework.  After  regular  deliberations  which 
included the consultation of academics and stakeholders as well as national parliaments, 
the group submitted its final report in December 2016. 

The  report  of  the  High  Level  Group  argues  that  the  case  for  reform  of  the  Own 
Resources  system  is  stronger  than  ever11.  The  group  noted  that  the  next  negotiation 
will take place in the unique context of, on the one hand,  greater pressure on reforming 
expenditure  towards  more  added  value  and  on  the  other  hand,  one  of  the  main  net 
contributors negotiating its exit, lifting a three-decade-long lock on the Own Resources 
decision. For this reason, the High Level Group found that no significant reform of the 
revenue  will  be  achieved  if  there  is  no  concomitant  significant  reform  of  expenditure. 
The report also shows that new spending instruments bring more added value, but efforts 
need to be pursued to bring legitimacy back to EU spending. 

11   Future  Financing  of  the  EU.  Final  report  and  recommendations  of  the  High  Level  Group  on  Own 

Resources. December 2016. 

11 

 
 
                                                 
Own Resources are viewed as one of the means to contribute to EU policy objectives 
by  addressing  the  EU  sustainability  gaps  (economic,  social,  environmental),  correcting 
negative  externalities  and  addressing  market/  government  failures,  in  addition  to 
simplifying  the  financing  of  the  EU  budget.  The  report  examined  in  detail  current  and 
possible candidate Own Resources, identifying their strong and weak points. Beyond the 
traditional  assessment  criteria,  new  Own  Resources  should  display  a  link  with  policies 
and thus bring added value by contributing to the achievement of policies as is the case in 
national fiscal systems. 

2.2.  The Commission Reflection Paper on the future of EU finances 

The  Reflection  Paper  on  EU  finances12  published  in  2017  confirms  the  need  to 
reform the EU budget. The Paper brings together the policy priorities presented in the 
March White Paper13 and their financing. Building on the arguments of the High Level 
Group  on  Own  Resources,  the  Paper  discusses  how  to  conceptualise  European  added 
value  and  whether  the  Own  Resources  system  should  be  reformed.  It  maps  out  new 
challenges, possibilities and reform options as well as risks and trade-offs for the future 
of EU finances. 

EU  finances  may  face  a  shortfall  arising  from  the  United  Kingdom’s  withdrawal 
and  from  the  emerging  financing  needs  for  new  priorities.  The  Reflection  Paper 
regards  these  issues  as  a  big  problem  but  also  as  an  opportunity  to  modernise  the  EU 
budget  and  as  a  responsibility  to  equip  it  better  to  respond  to  existing  and  new 
challenges.  The  principle  of  EU  added  value  is  emphasised  as  crucial  to  the  aim  of 
achieving  better  alignment  between  priorities  and  available  resources.  Like  any  public 
budget,  the  EU  budget  should  provide  resources  to  cater  for  the  provision  of  public 
goods,  but  in  this  case,  these  should  be  specifically  public  goods  of  a  European 
dimension. 

In the same vein, the Reflection Paper also indicates reform options on the revenue 
side.  Future  proposals  on  Own  Resources  should  be  mutually  reinforcing  with  the 
structural shift towards more common public goods and EU added value on the spending 
side, bringing truly European revenue. 

2.3.  The Multiannual Financial Framework communication as a contribution 

to the Leader's discussion  

The  Commission  published  its  options  for  reform  in  February  2018.  The 
Communication  on  "A  New,  modern  Multiannual  Financial  Framework  for  a  EU  that 
delivers efficiently on its priorities post 2020"14, which was adopted as a contribution to 
the Informal Leaders' meeting of 23 February, set out further concrete options for reform, 
identifying areas where choices would have to be made on both the expenditure and the 
revenue  sides  of  the  EU  budget.  A  reform  of  the  revenue  side  could  contribute  to 
strengthening the EU value added and overall simplification. 

12   Reflection paper on the future of EU finances. COM(2017) 358 of 28 June 2017. 
13   COM(2017) 2025 of 1 March 2017. 
14   COM(2018)98. 

12 

 
                                                 
3.  FINANCING THE EU BUDGET IN A GLOBALISING CONTEXT 

3.1.  The revenue side could contribute to addressing the budgetary gap 

The United Kingdom's withdrawal from the EU will leave a gap in the EU budget. 
The United Kingdom is currently a net contributor, even when taking account of the so-
called  'British  rebate'.  Its  average  share  of  the  Own  Resources  during  the  2014-2016 
period  has  slightly  exceeded  EUR  17  billion,  while  the  share  of  EU  expenditure  it  has 
received in the same period has been just above EUR 7 billion. The latter, of course, does 
not take into account the extent to which the United Kingdom benefits from the common 
EU  expenditure  devoted  to,  for  example,  external  policy  or  development  aid.  Looking 
into the  future,  and taking  into account  the  growing  EU  budget  up to  2020,  the  United 
Kingdom's withdrawal may leave a gap of EUR 12-14 billion in the annual EU budget. 
However,  it  makes  the  rebates  and  other  correction  mechanisms  obsolete,  providing  a 
unique opportunity to render the EU budget more coherent and streamlined. 

In addition, the Own Resource ceiling will need to constrain a growing expenditure. 
The  Own  Resources  Decision  includes  a  ceiling  for  annual  calls  for  Own  Resources, 
intended  to  warrant  certainty  for  Member  States  in  view  of  shielding  them  from 
'surprises' for their national budgetary and financial planning. Today, this ceiling is set at 
"1.20% of the sum of all the Member States' Gross National Income". With the United 
Kingdom  withdrawal,  this  ceiling  automatically  decreases  by  approximately  16%  in 
nominal  terms  (i.e.  the  share  of  the  United  Kingdom's  Gross  National  Income  in  the 
EU's).  In  addition,  it  is  important  to  note  that  beyond  the  payment  needs  under  the 
Multiannual  Financial  Framework,  budgetary  resources  necessary  to  cover  financial 
liability linked to loans or financial facilities guaranteed from the EU budget must remain 
below this ceiling. With the increasing use of such instruments, including for the possible 
euro-area investment stabilisation function, this ceiling will also need to be increased. 

External contributions, notably from the United Kingdom, may alleviate the strain 
on Own Resources. Potential additional contributions by the United Kingdom honouring 
its obligations assumed as an EU Member State that have to be paid beyond 2020 could 
reduce  the  financing  needs  to  be  covered  by  Own  Resources,  particularly  at  the 
beginning  of  the  next  Multiannual  Financial  Framework.  However,  such  contributions 
cannot be factored in with certainty as long as no withdrawal agreement has been signed 
with the United Kingdom. 

3.2.  Economic  developments  challenge  the  national  taxation  and  statistical 

systems  

Globalisation  and  technical  change  have  brought  about  profound  changes  in  the 
structure  of  firms  and  in  the  localisation  of  production.  There  is  a  growing 
dematerialisation of many services, which can reach European customers through online 
delivery with very limited infrastructure on EU territory. The economy is influenced by 
the  reduced  impact  of  transport  costs  on  the  international  supply  of  goods  and  by  the 
rapid  spread  of  e-commerce  and  other  digital  services  for  both  intermediate  and  final 
consumption.  The  weight  of  intangible  assets  such  as  intellectual  property  is  growing. 
And  there  are  large  and  rapid  fluctuations  in  foreign  capital  investments.  All  these 
phenomena challenge the capacity of national authorities to assess value creation within 
their  jurisdiction,  which  is  the  first  basis  for  assessing  taxable  bases.  The  swift  and 
massive  transfer  of  intangible  assets  between  countries,  decided  by  large  multinational 

13 

 
companies  in  response  to  tax  or  regulatory  incentives  has  also  the  potential  to  affect 
national accounts15.  

Globalisation and the increasing role of digital companies are also posing challenges 
to  both  national  tax  authorities  and  national  statistical  authorities.  In  recent  years, 
the  rise  of  intangibles  has  made  capital  mobility  quick  and  easy  and  the  debate  has 
shifted  to  the  inadequacy  of  national  taxation  frameworks  to  properly  address  these 
developments.  In  September  2013,  the  Organisation  for  Economic  Co-operation  and 
Development  (OECD)  has  launched  an  initiative  –  Base  Erosion  and  Profit  Shifting 
(BEPS) – aiming to provide governments with the tools to ensure that profits are taxed 
where  the  economic  activities  generating  them  are  performed  and  where  value  is 
created16.  

Globalisation and digitalisation not only impact the way of doing business but also 
influence  the  way  tax  authorities  manage  their  tax  systems.  To  safeguard  revenues, 
tax administrations must be increasingly  efficient and effective. To this end, enhancing 
tax compliance and fighting tax avoidance and fraud are major challenges. Reforming the 
revenue side of the EU Budget therefore also entails supporting Member States in their 
efforts to modernise their tax administration and deepen their cooperation, for the benefit 
of both the national and EU budget17. 

3.3.  Rethinking efficiency and equity between the EU and Member States 

From an administrative perspective, the EU budget is cost-efficient as the operating 
costs of the current system are very modest. Without the system of rebates and other 
corrections,  it  will  also  be  relatively  transparent.  However,  the  revenue  side  of  the  EU 
budget cannot be isolated from the major economic, social and environmental challenges 
which are faced by national budgets. 

For  a  growing  set  of  policies,  the  EU  is  the  appropriate  level  of  government  to 
provide  public  goods  and  tackle  externalities.  Preventing  climate  change,  protecting 
the  environment,  improving  the  functioning  of  the  Single  Market  and  managing 
monetary  policy  or  financial  markets  are  activities  that  transcend  national  borders.  The 
benefits  generated  by  these  policies  are  substantial.  The  EU  climate  policy  has 
contributed  to  reducing  greenhouse  gas  emissions  which  decreased  by  23%  between 
1990 and 201618. The Single Market integration, by opening markets and increasing the 
mobility of production factors, led to higher income in 'old' (+3.4%) and 'new' (+7.5%) 
Member States alike19. Citizens and companies benefit from these services and policies. 

However,  the  EU  does  not  have  the  power  to  levy  taxes20  and  therefore  cannot 
generate  direct  revenues  from  the  Single  Market  and/or  other  policies21.  Existing 

15   In  2016,  Ireland  gave  notification  that its  nominal Gross  National  Income  of  2015  had  increased  by 
25%, i.e. much more than foreseen just a year before, mainly due to the transfer of intangible assets 
from foreign companies to their Irish branches. 

16   The Commission has also relaunched the proposal for a Common Consolidated Corporate Income Tax 

in 2016   and has proposed a tax on digital services in March 2018. 

17   On the expenditure side, the FISCALIS programme supports cooperation between Member States in 

this area. 

18   COM(2017) 646 final. 
19   G. Felbermayr, J. Gröschl, I. Heiland (2018), Undoing Europe in a New Quantitative Trade Model, ifo 

Working Paper n° 250. 

20   Report of the High Level Group on Own Resources. 

14 

 
                                                 
fiscal instruments are mainly deployed at national level, although in some areas, the EU 
provides  rules  to  harmonise  tax  bases  and,  in  certain  cases,  apply  minimum  rates  (e.g. 
Value Added Tax).22. This improves fairness for EU citizens and companies in different 
EU countries and provides means to collect tax revenues that are otherwise eroded by tax 
avoidance.  Similarly,  tax  and  levies  to  address  external  costs  caused  by  pollution  and 
climate  change  are  mostly  imposed  at  national  level.  The  exception  to  this  is  the  EU 
Emissions Trading System given the global nature of greenhouse gas emissions (see Part 
II). As a consequence, in most cases, fiscal revenues need to be shared between the EU 
and national budgets. This is called 'vertical equity'. 

Finally, fairness among Member States needs to be looked at from both the revenue 
and  the  expenditure  sides  ('horizontal  equity').  The  purpose  of  EU  budget  is  not  to 
collect or distribute money equally across Member States, according to their economic or 
demographic size, but rather to finance projects of EU added value and support cohesion. 
Although  some  disparities  in  the  degree  to  which  Member  States  directly  benefit  from 
EU expenditure (per capita, or per unit of Gross National Income) are generally accepted, 
different  levels  of  contribution  to  their  financing  –  compared  to  the  respective  Gross 
National Income levels – appear more controversial and have led to the widespread use 
of rebates and corrections.  

4.  SUMMARY 

The case to reform the EU budget is justified for various reasons.  

The United Kingdom's withdrawal and the discontinuation of the corrections provide an 
opportunity to simplify and modernise the current system. At the same time,  economic, 
social  and  environmental  developments  in  the  EU  and  the  rest  of  the  world  have  been 
challenging national authorities. Furthermore, most of these challenges – climate change, 
internal market, environment- can be addressed most effectively at EU level. This can be 
done  by  the  prioritising  of  expenditure  programmes,  but  also  through  more  effective 
linking of the Own Resources system with EU policies.  

21   Kotsogiannis C., (2016), European Union and Own Revenue Resources: (Brief) Lessons from Fiscally 
Decentralised  Economies.  Chapter  in  The  Future  of  EU-Finances,  Working  Papers  for  the  Brussels 
Symposium on 14 January 2016, Edited by T. Buettner and M. Thöne. 

22   Bénassy-Quéré  A.,  Trannoy  A.,  Wolff  G.  (2014),  Tax  Harmonisation  in  Europe:  Moving  Forward. 

Conseil d'Analyse Economique, n°14, July. 

15 

 
 
 
                                                                                                                                                 
PART 2: REFORMING THE EU BUDGET REVENUE 

This part analyses how the revenue side of the EU budget can be reformed. It assesses the 
existing  and  potential  new  Own  Resources  and  discusses  their  main  strengths  and 
weaknesses. The analysis is based on the various reports published recently and goes a 
step further by attempting to identify the room for simplification and to operationalise the 
calculation of Own Resource for the new candidates. 

Section  1  focuses  on  existing  Own  Resources.  Section  2  reviews  new  Own  Resources. 
Section  3  assesses  how  to  make  better  use  of  "other  revenues".  Section  4  assesses  the 
phasing out of corrections. Section 5 concludes.   

1.  ASSESSING THE EXISTING OWN RESOURCES: THE NEED TO MODERNISE 

1.1.  Traditional Own Resources (customs duties) 

The amount of customs duties collected on behalf of the EU reflects trade flows. The 
presence of two large commercial ports in Belgium and the Netherlands, through which 
goods  enter  the  customs  union,  explains  the  two  countries'  role  in  channelling  imports 
also  for  other  Member  States  and  thus  their  much  higher  share  of  customs  duties 
compared with their overall economic weight (Figures 4 and 6). 

Figure 4: Imports of goods from outside the EU-28, 2013-2017 average (EUR billion) 

Source: Eurostat, international trade statistics; current prices in EUR billion; imports CIF (cost, insurance, freight) of EU-28 Member 
States from non-EU countries. Average of 2013-2017 

The  so  called  traditional  Own  Resources  accrue  directly  to  the  EU  budget  and  are 
generally considered as arising 'naturally' from the functioning of the customs union and 
the  common  external  commercial  and  trade  policies.  Customs  duties  are  levied  on 
imports  of  products  from  third  countries,  at  rates  determined  by  the  Common  Customs 
Tariff. 

Member  States  collect  the  customs  duties  on  behalf  of  the  EU  and  make  them 
available  to  the  Commission  after  a  deduction  of  20%  which  can  be  retained  as 
'collection  costs'.  This  percentage,  which  was  10%  over  the  period  1970  to  2000,  was 
raised  to  25  %  from  2001  onwards.  Under  the  2014  Own  Resources  Decision,  the 
percentage  was  reduced  to  20  %,  as  the  result  of  a  political  compromise  following  the 
Commission proposal to reduce the percentage back to 10 % (figure 5-6). 

16 

 
 
 
Figure 5: Retention rates since 1970 

Source: European Commission Services  

Figure 6: Amounts retained by Member States as collection costs for 2017 

Source: European Commission Services 

The  share  of  customs  duties  in  total  revenue  tended  to  go  down  over  time  as 
increases  in  trade  volumes  were  generally  compensated  or  even  overcompensated  by 
decreases in average tariffs, following the various rounds of trade negotiations at World 
Trade Organization level. In recent years, the share has become rather stable (around 13-
15  %).  Future  evolution  will  depend  mainly  on  trade  volumes  and  developments  in 
customs regimes and tariffs. 

In most Member States, the intensity of customs controls has being decreasing. The 
last Customs Union Performance figures shows a decreasing trend for control rates over 
the last few years whereas the retention rates simultaneously increased from 10 to 25%. 
At EU level 2.1 % of imported items were subject to controls during customs clearance 
in 2016 but this rate varies widely among Member States. 

The  amounts  retained  by  Member  States  as  collection  costs  do  not  necessarily 
support  the  customs  activities  directly.  Moreover,  recent  developments  show  that 
fewer human resources are available in national administrations for performing controls, 
which  means  that  only  a  limited  part  of  the  available  resources  is  dedicated  to  the 
customs  operations  and  the  protection  of  customs  duties.  Simplified  procedures  and 
automation help improve the cost effectiveness of the inspections. 

17 

0.1%0.2%0.3%0.4%02004006008001.0001.200DEUKNLBEITFRESPLSEDKIECZATROELPTHUFISKLTBGSIHRLVEELUCYMTCollection costs as % of extra-EU imports€millionCollection costs retained from TORcollection costs as % of extra-EU imports 
 
 
There  is  a  clear  evidence  of  imbalances  between  Member  States.  While  countries 
managing  long  land  borders  and  numerous  crossing  points  would  need  increased 
resources to finance their equipment for customs controls, they have only a limited share 
of  collection  costs;  conversely,  collection  of  large  amount  of  custom  duties  is  the 
prerogative of large commercial ports in some Member States.  

Moreover, for certain Member States, an increase in the retention rate represents a 
net decrease in their financial contribution to the EU budget. This is the case of those 
Member  States  which  collect  a  large  proportion  of  customs  duties  at  major  EU  entry 
points. This, rather than the actual collection cost, was the main motivation in the past for 
some Member States to have a higher retention rate. However, these Member States are 
also likely to be among the strongest beneficiaries of the Single Market, by dint of their 
openness to trade.  

Given the EU dimension of customs, only expenditure at EU level can address the 
imbalance in a fair manner. For example, increased EU support to Member States on 
the area of customs equipment under the Integrated Border Management Policy and the 
related  expenditure  programmes  would  help  address  these  imbalances.  Common 
investment in the methods for carrying out customs checks and the collection of customs 
duties could yield considerable economies of scale. 

1.2.  Gross National Income-based Own Resource 

In  addition  to  its  relative  stability  over  time,  the  Gross  National  Income-
contribution ensures the greatest sufficiency among existing Own Resources, thanks 
to  its  broad  base.  When  it  was  first  introduced  in  1988,  Gross  National  Income  was 
supposed  to  balance  the  (increasing)  budget,  against  the  background  of  long-declining 
customs  duties  and  agricultural  levies  (i.e.  the  Traditional  Own  Resources).  The  Gross 
National Income-based contribution's share of the EU budget has gradually increased to 
around 70 % in recent years. 

The statistical revisions of Gross National Income further increased its reliability. In 
2014,  most  Member  States  made  significant  revisions  to  their  Gross  National  Income 
data, due to two main factors: (i) the updated European System of Accounts (ESA) 2010 
replaced  the  old  ESA  95  across  the  EU,  leading  to  an  increase  of  the  EU-28  Gross 
National Income of around 2.3 %, although not evenly spread across Member States: the 
impact was larger on those with higher spending on Research & Development (Figure 6); 
some  Member  States  also  used  this  opportunity  to  introduce  benchmark  revisions;  (ii) 
2014 also was the deadline given by the Commission to Member States in the context of 
Own Resource inspections to address their specific reservations. 

18 

 
Figure 7 – Impact of methodological changes due to the update of the European System of 
Accounts (ESA) on the 2010 Gross Domestic Product (% points) 

Source: Eurostat 

Strong reliance on the Gross National Income-contribution does not reflect the EU 
dimension and the increasing interdependencies of economies. A contribution based 
on Gross National Income is a good indicator of the ability to pay  of Member States23, 
but  it  is  not  linked  to  the  benefits  linked  to  EU  policies.  The  impact  of  EU  policies 
tackling  externalities  or  creating  public  goods  (for  example  in  trade,  security, 
competition,  climate  change),  over  and  above  the  sum  of  national  contributions  to  the 
EU, is largely captured by Member States' Gross National Income. These benefits depend 
on  many  factors  such  as  location  of  activities,  mobility  of  capital,  energy  and  carbon 
intensities and tax regimes.  

Still, convergence in per-capita Gross National Income levels across the EU is one of its 
main  policy  goals  and  measure,  providing  a  direct  link  between  the  EU's  success  in 
integrating the national economies and the distribution of its financing burden. Thus, the 
Gross National Income's overall reliability makes it a solid reference point for calculating 
the  contribution  to  the  EU  budget  and  sharing  it  across  Member  States.  This  Own 
Resource  could  be  supplemented  by  a  number  of  other  financing  sources  in  order  to 
better mirror the different EU policies and their value added. 

1.3.  Simplifying  Member  States'  contributions:  reform  of  the  Value  Added 

Tax-based Own Resource 

1.3.1.  Rationale 

The  Value  Added  Tax  is  a  common  tax  paid  by  all  European  citizens  when 
consuming goods or services in the single market. This common tax is a core element 
of the single market, which is one of the European Union's greatest achievements. Value 
Added Tax operates in all Member States as a broadly based consumption tax within a 
common framework set by EU Directives. It has been progressively harmonised over the 
past decades in terms of tax base and rates although differences remain across Member 

23   C. Fuest (2017), Reforming the EU Budget: Small changes can bring considerable improvements, in 
T.Büttner,  M.Broer,  C.Fuest,  C.Waldhoff,  M.Schratzenstaller,  P.Becker,  J.Haas  and  C.B.  Blankart, 
"Die Zukunft der EU-Finanzen: Neue Wege der Finanzierung und der Verteilung?", ifo Schnelldienst 
70 (06), 2017, 03–25. 

19 

 
 
                                                 
States.  The  Commission  launched  in  2016  a  Value  Added  Tax  Action  Plan  to  create  a 
single EU Value Added Tax area by 2022. 

Value  Added  Tax  has  proved  to  be  a  solid  and  reliable  Own  Resource  since  1980 
providing predictable revenues even during adverse economic cycles. It accounts for 
a  significant  share  of  the  EU  budget  (around  15%)  but  for  only  0.3%  of  the  Member 
States' Value Added Tax base. The call rate has been reduced several times since 1980 as 
the revenues of the EU budget shifted to Gross National Income-based contributions (see 
Part I, Section 1.2). 

Figure 8  – Value Added Tax-based Own Resources revenue 2011-2015 (EU28, EUR billion) 

Source: European Commission Services 

However, the main weakness of the current Value Added Tax-based Own Resource 
is that its calculation is based on a complex methodology. This complexity is not due 
to the Value Added Tax itself but to the number of statistical compensations calculated 
and controlled to harmonise the 28 Value Added Tax bases of the Member States. These 
compensations  are  considered  necessary  as  the  current  Value  Added  Tax  system  is 
characterised by national derogations from the Value Added Tax Directive. The purpose 
of these compensations is to 'neutralise' different Value Added Tax rates and derogations, 
and to apply a call rate on a harmonised tax base. The method is well established, but it 
leads 
the  compensation  calculations  are 
cumbersome  and  generate  onerous  administrative  work  while  their  material  impact  has 
been at a consistently very low level for many years. 

to  unwieldy  computations.  Moreover, 

1.3.2.  Objective of the reform 

The  reform  of  the  Value  Added  Tax-based  Own  Resource  would  radically  simplify 
calculations and inspections while enhancing the connection with the single market and 
maintaining fairness across Member States. 

The reformed Value Added Tax-based Own Resource has the following aims: 

The  first  aim  would  be  to  tackle  the  complexity  of  the  existing  calculation  by 
abolishing  the  current  system  of  calculated  compensations.  The  calculation  of  the 
new  Value  Added  Tax  base  will  be  simple  and  transparent,  using  only  fiscal  data. The 
redesigned  calculation  builds  on  the  receipts  collected  annually  by  Member  States  and 

20 

 
 
controlled by national Parliaments and national audit institutions. Calculation and control 
costs could be drastically reduced. 

The second aim would be to ensure fairness. The new Value Added Tax base focuses 
on receipts from standard-rated supplies, which are consumed by all EU citizens in the 
Single  Market.  The  simplified  calculation  only  takes  into  account  standard-rated 
supplies, excluding reduced rates on goods and services. To ensure fairness, across the 27 
Member  States,  a  uniform  percentage  equal  to  45%  of  supplies  is  considered  to  be 
standard-rated in every Member State (see Box 2). 

The  third  aim  of  a  simplified  Value  Added  Tax-based  Own  Resource  would  be  to 
make  it  more  consistent  with  the  Value  Added  Tax  Action  Plan  launched  by  the 
Commission in 2016 to create a single EU Value Added Tax area by 2022. This Action 
Plan  sets  out  the  progressive  steps  required  towards  achieving  a  definitive  and 
harmonised  Value  Added  Tax  system  for  the  27  Member  States,  setting  out  actions  to 
tackle  Value  Added  Tax  fraud  and  adapt  the  Value  Added  Tax  system  to  the  digital 
economy and the needs of Small and Medium Enterprises. Furthermore, the Action Plan 
includes a proposal to reform the rules on Value Added Tax rates; the proposal for a new 
Value Added Tax -based Own Resource will be compatible with the new Value Added 
Tax rate regime as proposed. 

1.3.3.  How to reform the Value Added Tax -based Own Resource? 

The  reform  proposes  a  simple  and  transparent  way  to  calculate  the  Value  Added  Tax 
Own  Resource  base.  It  builds  on  the  Value  Added  Tax  receipts  annually  collected  by 
Member States: 

The first step is to take the Value Added Tax receipts collected by each Member State in 
a  given  year,  corrected  for  some  –  usually  minor  –  territorial  specificities  enshrined  in 
EU law as foreseen by Member States' accession Treaties. Receipts from standard-rated 
supplies  would  be  then  determined  by  applying  a  45%  common  Union  share  to  these 
receipts (see Box 2).  

(1)      Standard-rated  receipts  =  45  %  *  annual  Value  Added  Tax  receipts  (incl. 
corrections) 

The second step is to calculate the standard-rated taxable base, i.e. the value of goods and 
services on which the Member State levied the Value Added Tax receipts. The standard-
rated  taxable  base  is  calculated  by  dividing  the  standard-rated  receipts  by  the  Value 
Added Tax standard rate applied in each Member State:  

(2)   Standard-rated taxable base = Standard-rated receipts / Standard rate  

The third step is to apply a uniform call rate, i.e. the same for all Member States, to the 
standard-rated taxable base:  

(3) Value Added Tax -based Own Resource = call rate * Standard-rated taxable base  

The  new  Value  Added  Tax  -based  Own  Resource  would  be  radically  simplified  and 
transparent.  It  would  be  calculated  using  only  fiscal  data,  i.e.  the  annual  Value  Added 
Tax receipts collected and corrected by Member States. Subsequently, these data would 
be inspected by the Commission and audited by the European Court of Auditors, through 
systems which are already in place. 

21 

 
Moreover, the new Value Added Tax -based Own Resource would lead to a significant 
reduction  of  administrative  costs  for  calculations  and  inspections  and  could  be  easily 
implemented  in  the  2021-2027  Multiannual  Financial  Framework.  The  Member  States 
and the Commission have experience in the calculation and control of Value Added Tax 
receipts and well-established methods to do so. 

Box  2  –  How  was  the  45%  common  Union  share  of  standard-rated  supplies  to  final 
consumption calculated? 

Besides standard rates set by the Value Added Tax Directive, Member States can tax at reduced 
or zero rates. In general, this applies to essential consumption goods and/or to merit goods and 
services deserving a favourable tax treatment. There is some heterogeneity across Member States 
on the Value Added Tax structure (Figure A).  

The  common  Union  share  has  been  computed  using  data  from  Value  Added  Tax  statements 
calculated by Member States, inspected by the Commission and audited by the European Court 
of  Auditors.  According  to  the  methodology  to  calculate  the  Value  Added  Tax  based  Own 
Resource24,  the  Weighted  Average  Rate  allocates  all  taxable  goods  and  services  to  the 
appropriate Value Added Tax rate using data from national accounts, which makes it possible to 
identify the share of standard-rated goods and services in each country. The Weighted Average 
Rate is included in the Value Added Tax Statement sent annually by Member States.  

Figure A – Value Added Tax structure per Member State 2011-2015* 

Source: European Commission Services. * for Croatia 2013-2015  

Between 2011 and 2015, the average share of the standard-rated goods was 73,84% going from 
99,73% to 46,22% Taking the average of the lowest share of standard-rated goods and services 
across  the  27  Member  States  over  a  period  of  five  years  (2011-2015)  gives  a  common  Union 
share  of  45%.  This  average  percentage  captures  the  common  share  of  standard-rated  supplies 
among  countries,  thus  ensuring  that  the  Own  Resource  system  does  not  penalise  any  Member 
State.  

1.3.4.  Quantification 

The tax base is large, around EUR 1,825 billion in 2015. With a call rate between 1% and 
2  %,  revenues  are  estimated  between  around  EUR  25  billion  and  EUR  49  billion  on 
average in the 2021-2027 period. 

24   Regulation 1553/89. 

22 

 
 
                                                 
2.  PROPOSING A BASKET OF NEW OWN RESOURCES LINKED TO EU POLICIES 

2.1.  Common Consolidated Corporate Tax Base 

2.1.1.  Rationale 

Multinational  companies  benefit  in  particular  from  the  advantages  of  the  internal 
market. With easy access to an integrated, barrier-free European market, the expansion 
of such companies is facilitated and their profitability increased. Differences in corporate 
tax rules across the EU are a long-standing problem that allow multinationals to engage 
in  profit  shifting  and  tax  optimisation,  distorting  competition  with  smaller  firms  and 
subtracting  resources  from  national  budgets.  Ongoing  technological  and  economic 
developments such as globalisation and dematerialisation are also contributing to this. 

In  2016,  the  Commission  relaunched  its  proposal  to  harmonise  corporate  income 
tax  systems  to  ensure  a  fair  allocation  and  distribution  of  taxable  profits  to  the 
Member States. The Common Consolidated Corporate Tax Base establishes a common 
set  of  rules  which  simplify  tax  compliance,  reduces  administrative  costs  for  both 
companies  and governments and increases  transparency  and efficiency25. The Common 
Consolidated Corporate Tax Base also introduces the use of an apportionment formula, 
by  which  profits  are  allocated  to  Member  States  based  on  sales,  labour  and  assets. 
Therefore, taxes will be paid in the Member States where the profits are generated, which 
should reduce distortions. 

An Own Resource based on the Common Consolidated Corporate Tax Base would 
directly  acknowledge  the  link  between  the  financing  of  the  EU  budget  and  its 
benefits26, as it would emphasise the Member States' common interest in ensuring a level 
playing  field  for  companies  operating  in  the  single  market.  The  Common  Consolidated 
Corporate  Tax  Base  would  enable  businesses  to  enjoy  a  level  playing  field,  legal 
certainty  and  minimal  obstacles  when  operating  across  borders.  Only  one  set  of  tax 
declarations  would  be  required  for  the  all  EU  operations.  Companies  would  apply  the 
same rules when calculating their taxable profits thus reducing transfer-pricing planning 
opportunities. 

2.1.2.  How would it work? 

The  Common  Consolidated  Corporate  Tax  Base  proposal  provides  requirements  for 
companies or groups of companies having total worldwide consolidated revenue above a 
certain threshold  and  meeting certain ownership criteria. Companies  below the revenue 
threshold  may  also  opt  to  apply  the  rules  of  the  Directive.  The  consolidated  tax  base 
would  then  be  apportioned  among  Member  States  by  a  formula,  comprising  three 
equally-weighted  factors:  labour  (composed  of  both  payroll  cost  and  the  number  of 
employees with equal weights), assets and sales. 

A Common Consolidated Corporate Tax Base -based Own Resource would be calculated 
by applying the call rate on the value of the taxable profits of those companies for which 
the  Common  Consolidated  Corporate  Tax  Base  is  compulsory,  as  apportioned  to  each 

25   Commission proposals for Council Directives COM(2016)683 final and COM(2016)685 final. 
26   Candau F., and Le Cacheux, J. (2017), Corporate Income Tax as a Genuine Own Resource Available 
at SSRN: https://ssrn.com/abstract=2939938 or http://dx.doi.org/10.2139/ssrn.2939938. Berger M. and 
al.,  (2017),  How  Europe  can  deliver.  Optimising  the  division  of  competences  among  the  EU  and  its 
member states. Case study 3 on corporate taxation. Bertelsmann Stiftung, Gütersloh.  

23 

 
                                                 
Member  State.  The  amounts  would  be  transferred  to  the  EU  budget  by  the  Member 
States.  Taxable  profits  of  companies  outside  the  mandatory  scope  of  the  Directive  (i.e. 
below the size threshold or outside the other criteria) would be excluded for the purposes 
of Own Resources. 

Applying  a  uniform  call  rate  to  a  common,  consolidated  tax  base  after  apportionment 
would  ensure  fairness  of  the  distribution  across  Member  States,  in  accordance  with 
elements of the formula for apportioning the profits of company groups to the Member 
States  where  they  operate27.  The  EU  Own  Resource  to  be  made  available  by  each 
Member State would therefore be calculated as follows: 

Common  Consolidated  Corporate  Tax  Base  based  Own  Resource  =  call  rate  * 
apportioned tax base (mandatory part) 

2.1.3.  Estimated revenues 

Based  on  2012  data,  the  total  tax  base  in  the  EU-27  was  estimated  at  nearly  EUR  380 
billion28. A call rate between 1% and 6%would generate around EUR 4 billion to EUR 
23 billion on average for the period 2021-2027 (2012 data)29.  

2.2.  Own Resource based on the Auctioning revenue from the EU Emissions 

Trading System 

2.2.1.  Rationale 

The  EU  is  building  an  Energy  Union  framework  strategy,  with  five  priority 
dimensions:  (i)  energy  security,  solidarity  and  trust;  (ii)  a  fully  integrated  European 
energy  market;  (iii)  energy  efficiency  contributing  to  moderation  of  demand;  (iv) 
decarbonising  the  economy;  and  (v)  research,  innovation  and  competitiveness.  This 
framework  requires  significant  investment  in  clean  energy  infrastructure  over  the  next 
decade,  a  part  of  which  will  be  financed  by  the  EU  budget.  In  the  context  of  the  Paris 
Agreement  adopted  on  12  December  2015  under  the  United  Nations  Framework 
Convention on Climate Change (UNFCCC), the EU committed to reducing its emissions 
by at least 40 % between 1990 and 2030. 

The Emissions Trading System is one of the main instruments to reduce greenhouse 
gas emission in the EU. It provides a maximum (cap) on the total amount of greenhouse 
gases  that  can  be  emitted  by  the  sectors  covered.  Companies  receive  or  buy  emission 

27   The proposed Directive states that the consolidated tax base – when positive – shall be shared between 
the company group members at the end of each tax year on the basis of a formula for apportionment. 
In determining the apportioned share of a group member A, the formula shall take the following form, 
giving equal weight to the factors of sales, labour and assets: 

28   Due to data limitations, these estimates are for all multinational groups, which is the best estimate for 
groups  with  consolidated  global  turnover  above  EUR  750  million.  The  estimates  are  based  on  the 
CORTAX simulations for the Impact Assessment of the Common Consolidated Corporate Tax Base 
(more  specifically,  scenario  4  of  Table  11).  For  more  information  on  CORTAX,  see  Modelling 
corporate tax reform in the EU: new calibration and simulations with the CORTAX model. Working 
Paper n°66, 2016. Taxation Papers.  

29   Assuming it enters into force in 2023. See Part III, section 1. 

24 

 
                                                 
 
allowances which they can trade with one another as needed. This cap and trade system 
ensures that emissions are reduced with the cheapest abatement cost possible. It applies 
to  over  11 000  power  plants  and  industrial  installations  across  the  EU,  as  well  as  to 
aviation  for  flights  within  the  European  Economic  Area.  Allowances  are  auctioned  or 
allocated for free to the industry. 

The  Emissions  Trading  System  is  an  EU-wide  instrument.  Installations  covered  by 
the  system  are  subject  to  the  same  rules  across  the  EU.  There  is  a  single  carbon  price 
across the EU for the sectors covered. 

The auctioning of allowances provides revenues to the Member States who collected 
EUR 21.3 billion over the period 2013-2017 (including the United  Kingdom).  To  date, 
most  of  the  auctioning  revenues  are  redistributed  among  Member  States  according  to 
their  share  of  verified  emissions  during  the  2005-2007  period.  At  least  50%  of  those 
revenues  should  be  used  for  climate-related  purposes.  According  to  the  most  recent 
information available, more than 80% of these revenues have been used or are planned to 
be used for climate and energy purposes30. 

The  Emissions  Trading  System  provides  the  same  carbon  price  to  all  economic 
operators.  In  terms  of  costs,  most  of  the  auctioned  allowances  are  used  by  the  power 
sector.  With  the  development  of  interconnections  between  Member  States,  wholesale 
electricity  markets  in  the  EU  are  becoming  increasingly  integrated.  Installations 
consequently increasingly pass the carbon price on to consumers throughout the EU and 
not only in the country where they are located. 

The Emissions Trading System is a unique Pan-European policy instrument which 
benefits all citizens across the EU. This policy instrument has been fully harmonised at 
EU-level  since  2013,  with  the  exception  of  the  sharing  of  the  revenues,  which  remain 
mostly allocated based on the share of verified emissions during the 2005-2007 period. In 
terms of environmental benefits, the emission reductions generated by this policy have an 
EU added-value.  

2.2.1.  How would it work? 

The  Own  Resources  contribution  would  only  apply  to  the  allowances  distributed  to  all 
Member  States  on  the  basis  of  2005-2007  emissions31.  This  covers  90%  of  the 
allowances available for auctioning and excludes the allowances auctioned for aviation. 
The Own Resources contribution would also include the allowances which are designated 
for auctioning, but which may on the basis of an optional derogation, be allocated for free 
to  the  power  sector  in  certain  Member  States32  for  use  in  modernising  their  electricity 
generation sector33. Currently, 10 Member States have the possibility to allocate for free 
up to 40% of their allowances34. To ensure that the decision whether or not to use the free 
allocation  option  for  the  power  sector  is  based  on  economic  grounds  as  originally 
provided for in the Directive, the Own Resource would also cover these allowances. 

30   Article 10(3) of the Emissions Trading System Directive. 
31   Or in 2005 and 2007. Article 10(2)(a) of the Directive. 
32   Article 10a and 10b of the Directive. 
33   Article 10c of the Directive. 
34   Note that the share of allowances can be increased to 60%, using allowances redistributed for reasons 
of solidarity, growth and interconnections, if from that same amount allowances are also transferred to 
the Modernisation Fund established under the Directive.  

25 

 
                                                 
To  ensure  fairness,  some  allowances  distributed  to  the  lower  income  Member  States 
would not be covered by the Own Resource. This corresponds to the 10 % of allowances 
available  for  auctioning,  which  are  redistributed  for  the  purposes  of  solidarity,  growth 
and interconnections35. Similarly, the revised Directive established a Modernisation Fund 
intended for use at modernising the energy sector in the less wealthy Member States. The 
amount of allowances dedicated to financing this fund (2 % of the total cap) will not be 
subject to the Own Resource contribution.  

Emissions  Trading  System-based  Own  Resource  =  call  rate  *  allowances  *  auction 
clearing price36 

2.2.2.  Estimated revenues 

Estimated  annual  average  revenues  could  vary  between  EUR  1.2  and  3.0  billion37  
depending on the carbon price and auction volumes, which are subject to the operation of 
the Emissions Trading System market stability reserve. 

2.3.  Own Resource contribution based on Plastic Packaging Waste 

2.3.1.  Rationale 

Plastic  packaging  generates  pollution.  Plastic  makes  a  positive  contribution  to  the 
European  economy  and  improves  the  daily  lives  of  the  European  citizens.  At  the  same 
time, Europeans generate 25 million tonnes of plastic waste of which less than 30 % is 
collected for recycling. Pollution from plastics affects not only the environment but also 
human health. 

The  pollution  generated  by  plastics  and  micro-plastics  goes  beyond  national 
borders.  Marine  litter  and  micro-plastics  are  a  particular  concern  and  threaten  the 
conservation of the seas' biological resources. Early in 2018, the Commission adopted a  
European Strategy for Plastics in a Circular Economy38. This strategy will contribute to 
tackling  the  environmental  problems,  in  particular  by  improving  the  economics  of 
recycling  and  reducing  the  leakage  of  plastic  litter  into  the  environment.  This  strategy 
also aims to increase plastics sustainability, while stimulating and rewarding innovation, 
competitiveness  and  job  creation.  It  provides  an  EU-wide  recycling  target  of  50%  by 
2015 for plastic packaging waste. This rate will increase to 55% in 2030.  

The strategy also recommends introducing measures of a fiscal nature encouraging 
environmentally  friendly  behaviours.  Such  measures  will  contribute  to  stimulate 
investment  in  recycling  facilities39.  They  will  complement  the  other  measures  of  the 
package.  

35   Article 10(2)(b) of the Directive. 
36   Except for allowances freely allocated to the power sector, for which the contribution is equal to the 

relevant share of the market value of these allowances. 

37   The lower price estimate is EUR 10/ton which corresponds to market price in the first months of 2018. 
The  upper  price  estimate  is  EUR  25/ton  which  corresponds  to  the  central  scenario  of  the  impact 
assessment  conducted  for  the  proposed  Emissions  Trading  System  revision  during  phase  4  (2021-
2030) 

38   COM/2018/028 final.  
39   Achieving the objectives laid out in this strategy will require major investments in both infrastructure 
and  innovation.  Meeting  ambitious  goals  on  plastics  recycling  alone  will  require  an  estimated 
additional  investment  of  between  EUR  8.4  and  16.6  billion.  See  Deloitte,  (2015)  Increased    EU 
Plastics Recycling Targets:  Environmental, Economic and Social Impact Assessment.  

26 

 
                                                 
The EU budget would contribute to meeting the objectives of the Plastics strategy. 
The proposed Own Resource contribution would be directly proportional to the quantity 
of  Plastic  Packaging  Waste  generated  in  each  Member  State  that  is  not  recycled.  The 
contribution  will  therefore  provide  an  incentive  for  the  Member  States  to  reduce  these 
waste  streams  through  efforts  to  increase  recycling  and/or  to  reduce  plastic  packaging 
volume.  

Box 3 – Options for a Plastic based Own Resource 

The production and consumption of plastics generates pollution and harms human health. Marine 
litter and micro-plastics is a particular concern. In order to fight plastic waste, and in particular 
waste  from  single  use  plastic  packaging,  some  Member  States  have  started  to  implement  tax 
measures  according  to  the  “polluter  pays”  principle.  Denmark  introduced  a  plastic  bag  tax  in 
1994. Consumption halved from around 800 million bags to 400 million bags. In 2002, Ireland 
enforced a plastic bag tax. In consequence of a 15-cent fee, plastic carrier bag consumption fell 
by  94%,  meaning  that  yearly  Irish  consumption  decreased  by  about  1  billion  bags. 
Approximately  EUR  10  million  were  raised  from  this  tax  in  the  first  year.  In  some  Member 
States,  discussions  have  started  about  taxing  plastic  bottles.  Other  Member  States  put  in  place 
regulatory  instruments.  Italy  and  France  banned  plastic  bags  not  deriving  from  biodegradable 
sources. Finland, Luxembourg, the Netherlands and Germany have also introduced measures to 
contrast the distribution of plastic bags with effective results.  

Several  options  have  been  explored  so  that  the  revenue  side  of  the  budget  contributes  to  the 
objective of the Plastic strategy. A tax on production would have taxed inputs or outputs along 
the  principle  of  polluter  payer.  This  would  have  had  a  negative  impact  on  industrial 
competitiveness  and  entailed  a  risk  of  production  leakage.  Applying  a  retail  tax  on  a  limited 
number of plastic items would influence consumer behaviour. According to an estimate, a tax on 
plastic bags would collect from EUR 0.4 billion to EUR 7.5 billion40. However, an EU wide tax 
would have possibly overlapped with existing national measures and would hardly limit as much 
as possible the administrative burden for both tax administrations and retailers. Finally, an option 
based  on  a  national  contribution  would  request  them  to  contribute  to  the  EU  budget 
proportionally  to  the  annual  quantity  of  plastic  packaging  waste  that  is  not  recycled.  National 
authorities would be incentivised to reduce this quantity of waste. At the same time, in line with 
the  principle  of  subsidiarity,  they  would  enjoy  some  discretion  as  to  the  most  appropriate 
economic and regulatory measures to meet this objective. 

2.3.2.  How would it work? 

The  Own  Resource  contribution  would  be  proportional  to  the  quantity  of  Plastic 
Packaging  Waste  that  is  not  recycled.  The  contribution  of  Member  States  to  this  Own 
Resource would be calculated by applying a call rate to this quantity.  

Plastic-based Own Resource = call rate * kg of non-recycled plastic packaging waste 

High  quality  and  timely  EU  waste  statistics  are  needed  on  the  generated  Plastics 
Packaging  Waste,  as  well  as  for  the  recycled  amount.  The  data  on  plastic  packaging 
generation and recycling are already reported to the Commission (Eurostat) pursuant to 
Article 12 of the European Parliament and Council Directive 94/62/EC of 20 December 
1994  on  packaging  and  packaging  waste41.  There  is  consequently  an  appropriate  legal 
basis  for  gathering  these  data.  The  quality  of  Plastic  Packaging  Waste  statistics  will 
further  improve  with  the  adoption  of  the  amendment  of  the  Plastic  Packaging  Waste 
Directive in 2018. Pursuant to that revised Directive, by March 2019, the EU will adopt 

40   Schratzenstaller M., (2018), A Plastic Tax as Sustainability-oriented Tax-based Own Resource for the 

EU Budget. Input to the Plastic Packaging Roundtable of 22 March 2018. To be published 

41   OJ No L 365/10 of 31.12.94 

27 

 
                                                 
implementing  acts  to  establish  methodological  rules  to  ensure  data  quality  and 
comparability across Member States.  

Box 4 - Collection of data on Plastic Packaging Waste 

Member States are required to report data on generated and recycled Plastic Packaging Waste to 
the Commission (Eurostat) in accordance with Directive 94/62/EC on packaging and packaging 
waste, which includes EU binding targets for the recycling of plastic packaging. Data on Plastic 
Packaging  Waste  are  most  of  the  time  collected  by  Extended  Producer  Responsibility 
organisations,  regional  authorities  or  statistical  offices  and  reported  to  the  national  authority, 
which in turn report the data to the Commission following the rules and formats established by 
Commission Decision 2005/270/EC.  

A  careful  review  of  Plastic  Packaging  Waste  statistics  demonstrates  that  data  quality  has 
improved over time. It could be considered fit for the purposes for many Member States already 
now.  In  particular,  data  on  waste  per  capita  are  strongly  correlated  with  the  level  of  income 
across  Member  States.  Therefore,  the  differences  across  Member  States  as  regards  generated 
Plastics  Packaging  Waste  can  to  a  large  extent  be  attributed  to  differences  in  terms  of 
consumption  levels  rather  than  to  statistical  factors.  Nonetheless,  the  data  should  be  further 
improved, in particular for some Member States and as regards recycled plastics packaging.  

The new waste legislation due for formal adoption in May 2018 will further improve data quality 
and comparability across Member States. The amendment of Directive 94/62/EC introduces strict 
and  harmonised  calculation  rules.  It  envisages  that  only  waste  amounts  that  enter  a  recycling 
operation  shall  be  considered  as  recycled,  and  that  the  data  on  packaging  waste  generated  and 
recycled  shall  be  submitted  to  the  Commission  every  year  within  18  months  of  the  end  of  the 
reporting  period  and  shall  be  accompanied  by  a  quality  check  report.  The  description  of  the 
system for collecting data and of the methods used will be subject to verifications on behalf of 
the  Commission,  and  where  necessary  visits  in  Member  States  would  occur,  including 
inspections as foreseen under Own Resource legislation,.    

2.3.3.  Estimated revenues 

According  to  the  most  recent  data  available,  the  EU-27  (excl.  the  United  Kingdom) 
generated in 2015 13.6 million tonnes  of Plastic Packaging Waste, of which 40% were 
recycled.  According  to  certain  estimates42,  this  quantity  is  expected  to  increase  by 
approximately 300 thousand tonnes per year in the next decade. However, if the EU and 
its Member States put in place measures to meet the objectives of the Plastics strategy, 
the  recycling  rate  will  also  increase  to  50%  by  2025  and  to  55%  by  2030.  All  in  all, 
revenues are expected to remain relatively stable during the 2021-2027 period; depending 
on the call rate applied they could range between EUR 4 billion and 8 billion per year. 

3.  MAKING BETTER USE OF ‘OTHER REVENUES’ 

3.1.  Other revenues: a wide range of sources of revenues 

'Other  Revenues'  supplementing  the  Own  Resources  stem  from  a  wide  range  of 
sources.  They  include  the  following:  (i)  the  surplus  from  the  previous  year;  (ii) 
contributions  from  third  parties  for  the  participation  in  certain  programmes;  and  (iii) 
income stemming from interests and fines or penalties due to infringement of EU law. To 

42   ICF Consulting Services Ltd (2018), Plastics: Reuse, Recycling and Marine Litter”, a study prepared 

for the European Commission, (forthcoming).  

28 

 
                                                 
the extent that the revenue is generated by the implementation of EU legislation itself, it 
can be earmarked to cover related expenditure. 

The proceeds stemming from many of these sources are largely unpredictable and 
volatile.  Only  some  items  are  known  'ex  ante'  (i.e.  at  the  time  the  budget  is  approved) 
and  can  be  entered  in  the  budget  in  the  beginning  of  the  year.  For  example,  the  other 
revenue budgeted in 2018 will be equivalent to around 1.3 % of overall revenue. Other 
items  are  only  known  later  in  the  course  of  budget  execution  and  carry  a  'p.m.'  entry. 
Only in hindsight (i.e. looking at 'outturn' figures) can a full overview of other revenue be 
shown. 

Except  for  'sufficiency  and  stability',  'other  revenues'  score  rather  high  against 
most  of  the  traditional  assessment  criteria.  They  are  immediately  linked  with  EU 
policies and legal competences, are easy to administer, and, if earmarked, do not crowd 
out expenditure under the Multiannual Financial Framework ceilings or Own Resources 
under the Own Resources ceiling. Furthermore, as they are not transferred from national 
treasuries, they are not included under the national contributions that would be subsumed 
into the operating budgetary balances and therefore constitute an independent, 'genuine' 
EU income source. 

In  fact,  under  the  present  system,  'other  revenues'  already  constitutes  a  genuine, 
albeit  mostly  unpredictable  income  source  for  the  EU  budget  outside  the  Own 
Resources  Decision.  Between  2010  and  2016  and  depending  on  which  exact  items  are 
counted, the amounts thus received as 'other revenues' ranged between EUR 3 billion and 
10 billion per year. 

Figure 9 – Other revenue, excluding surplus and revenue from third parties 

Source: European Commission Services 

Subject  to  its  legal  base,  origin  and  purpose,  other  revenue  is  registered  either  as 
'general  revenue'  or  as  'assigned  revenue'.  As  a  rule,  other  revenue  is  balanced  out 
through the Gross National Income-based Own Resource, thus leading to lower needs for 
national  contributions  from  the  Member  States  (see  Part  I,  Section  1.2).  Other  revenue 
which is registered as 'assigned' revenue is used to provide additional appropriations to 
finance  expenditure.  The  related  expenditure  lines  must  be  clearly  stated  in  the  budget 
documents. 

The present level of other revenue allocated to the EU budget could be increased if 
the  opportunities  were  more  systematically  exploited.  The  final  report  of  the  High 

29 

 
 
Level Group on Own Resources recommends that as a matter of principle all revenue that 
is  created  by  common  EU  level  rules  should  accrue  to  the  EU  budget.  In  the  past, 
revenue created by EU legislation has sometimes been allocated to national budgets, like 
the  auctioning  proceeds  of  the  Emissions  Trading  Schemes.  The  European  Travel  and 
Information Authorisation System (ETIAS) as proposed by the Commission foresees that 
the  fees/Visa  waivers  to  be  paid  by  visitors  to  the  Schengen  area  from  third  countries 
should  constitute  assigned  revenue  (to  allow  for  additional  appropriations  on  selected 
budget lines). The EU budget might receive approximatively EUR 100 million per year43. 

3.2.  Mapping other future revenues 

its  final  report  and 
The  High  Level  Group  on  Own  Resources  published 
recommendations  in  January  2017.  As  a  follow-up,  Commission  services  have 
thoroughly analysed  these  recommendations  and  examined  possible  variants  in  view  of 
operationalising  the  candidates  as  well  as  a  few  additional  options  which  were  not 
included in the report. Whilst these candidates have their potential merits, they were not 
retained in the final basket as proposed by the Commission for a variety of reasons. 

Excise  duties,  such  as  for  tobacco  or  other  consumer  items  can  be  subject  to  EU  level 
harmonisation. In many cases, they also pursue a double purpose: revenue generation and 
behavioural change. To the extent that they already build on a minimum harmonisation at 
EU  level,  such  surcharges  would,  in  principle,  lend  themselves  as  a  basis  for  an  Own 
Resource for the EU budget. 

An  Own  Resource  based  on  cigarettes  taxation  was  analysed.  In  recent  years,  the 
European  Union  has  strengthened  its  focus  on  tobacco-related  policies,  pursuing  fiscal 
harmonisation  and  fighting  tobacco  smuggling.  A  directive  on  the  structure  and  rate  of 
excise duties already exists. Another directive – the Tobacco Products Directive - aims to 
tackle  illicit  trade  in  tobacco  products,  which  costs  national  (and  indirectly  the  EU-) 
budgets over EUR 10 billion per year.  

Similarly,  a  sugary  drink  tax  coordinated  or  harmonised  at  EU  level  could  address 
negative  externalities  of  consuming  sugar,  in  terms  of  health  problems  and  healthcare 
costs. The rate of obesity is among the indicators for the Sustainable Development Goals. 
Such a tax could be a way to regulate (i.e., discourage) the consumption of sugary drinks 
while  avoiding  distortions  in  the  Single  Market.  A  (minimum)  EU-level  sugary  drinks 
tax, along the lines of those already existing at national level could have been designed as 
an Own-Resource.  

In  the  field  of  environment  taxation,  other  Own  Resource  candidates  were  explored.  A 
motor fuel surcharge could have built on a broad existing tax base and be in line with the 
aim of decarbonising the transport sector44. Moreover, an Own Resource linked to petrol 
could build on an existing framework of harmonisation. 

A  border  carbon  adjustment  scheme45  was  explored.  Similar  to  the  levying  of  custom 
duties,  this  would  build  on  the  EU's  legal  prerogatives  with  respect  to  the  common 

43   These estimated numbers rely on the statistics available in the Smart Border Technical Study. 
44   Thöne  M.  (2016),  Transferring  taxes  to  the  Union:  the  case  of  European  road  transport  fuel  taxes. 
Chapter  in  The  Future  of  EU-Finances,  Working  Papers  for  the  Brussels  Symposium  on  14  January 
2016, Edited by T. Buettner and M. Thöne. 

45   Condon  M.,  Ignaciuk  A.  (2013),  Border  Carbon  Adjustment  and  International  Trade.  A  literature 
review.  OECD  Working  Papers  2013/06;  Helm  D.  and  al.  (2012),  Trade,  climate  change  and  the 

30 

 
                                                 
 
external borders. Compliance with the rules of the World Trade Organization would have 
to  be  ensured.  The  introduction  of  additional  duties  on  imports  would  require  an 
equivalent  measure  affecting  producers  in  the  Union  in  order  to  ensure  non-
discrimination  of  imported  products.  A  carbon  tax  in  non-Emissions  Trading  System 
sectors  could  be  applied  to  both  domestic  and  imported  products  but  the  precise 
definition of a tax base would be difficult in practice. It would have to reflect the actual 
carbon footprint throughout the production chain of each product.  

A seigniorage-based own resource was analysed. Such revenues are not only the addition 
of  what  national  revenues  from  printing  money  used  to  generate  before  the  creation  of 
the euro, they also result from the fact that the euro has become an international reserve 
currency, a status most national currencies did not have. Such revenue source, however, 
can only be legitimately seen in the context of the euro area and not the EU as a whole, in 
particular  in  the  context  of  the  European  and  Monetary  Union  and  stabilisation 
instrument. 

As part of the Multiannual Financial Framework package in 2011, the Commission had 
proposed the introduction of a new Own Resource based on a new Financial Transaction 
Tax46. As no unanimity could be mustered for the Financial Transaction Tax, in 2013 the 
Commission  tabled  a  proposal  for  a  Council  Directive  implementing  enhanced 
cooperation.  The  negotiations  are  still  ongoing  in  the  Council.  The  detailed  provisions 
which should govern the creation of the harmonised Financial Transaction Tax are still to 
be  decided  upon  by  unanimity  by  the  now  10  participating  Member  States47. 
Nevertheless,  the  Financial  Transaction  Tax-based  Own  Resource  could  be  a  viable 
'candidate' which fulfils many criteria (in particular its mobile tax base and cross-border 
nature)  which  can  only  be  regulated  effectively  -  or  taxed  efficiently  -  at  EU  level.  As 
such, it would have a marked EU added value dimension.  

Finally,  digital  taxation  has  been  analysed.  Current  tax  rules,  which  are  based  on  the 
physical  presence  of  activities,  do  not  properly  grasp  the  development  of  the  digital 
economy. The application of national digital taxes with different rates and different rules 
would remain suboptimal and create additional administrative costs for the participants. 
Furthermore,  the  eventual  economic  incidence  of  the  tax  and  its  costs  are  difficult  to 
locate by Member State since it is incompatible with a logic of national jurisdiction. In 
March  2018,  the  Commission  presented  a  proposal  on  a  Digital  Services  Tax48  which 
would  allow  digital  players  to  be  taxed  through  a  fair  and  harmonised  system.  The 
proposal  combines  a  long-term  (comprehensive)  solution,  based  on  a  Directive 
addressing  'where'  and  'what'  to  tax  and  providing  for  future  integration  with  the 
Common Consolidated Corporate Tax Base; and a short-term solution applicable in the 
interim. 

political game theory of border carbon adjustments. Oxford Review of Economics Policy, Volume 28, 
Number  2,  2012,  168-394;  Krenek  A.  and  al.  (2017),  Sustainability-oriented  future  EU  funding:  A 
European border carbon adjustment. FairTax Working Paper Series, n°15. 

46   This proposal was designed during the economic and financial crisis where most governments had to 
provide  extensive  support  to  their  financial  sectors.  Since  the  crisis,  the  EU  has  adopted  several 
regulatory reforms for the financial sector. See IMF(2010), A Fair and Substantial Contribution by the 
Financial Sector.  

47   Austria, Belgium, Germany, Greece, Spain, France, Italy, Portugal, Slovenia and Slovakia. 
48   COM(2018) 148 final of 21 March 2018. 

31 

 
                                                                                                                                                 
4.  PHASING OUT CORRECTIONS 

In addition to being complex, the system of rebates is interrelated with the concept 
of net balances, which is also to become obsolete as regards the evolution of the EU 
budget. Net balances cannot be used either as an exact measure of solidarity or excessive 
budgetary  burden,  nor  as  a  proxy  for  ‘cost-benefit’  assessments.  Expenditure  from  the 
EU  budget  allocated  to  a  specific  Member  State  often  benefits  other  Member  States  as 
well  or  even  addresses  a  common  European  public  good.  In  fact,  net  balances  ignore, 
almost by definition, any European added value not directly measurable.  

The net-balances approach is even less relevant in the context of a modern budget 
focused on common priorities and European public goods. The decreasing weight of 
nationally  allocated  programmes,  in  particular  the  Common  Agricultural  Policy  and 
Cohesion  Policy,  and  the  growing  share  of  spending  priorities  such  as  research  and 
innovation, mobility, border management, security and defence, call for a truly European 
approach  with  the resulting added  value  not  captured by net balances. Introducing new 
revenue  components  which,  by  their  very  nature,  reflect  collective  benefits  of 
cooperation and coordination  at  EU level should further attenuate the perception of the 
EU budget as a zero-sum transfer system. 

Removing corrections immediately could however lead to a significant and sudden 
increase in the contributions of Member States having benefitted from corrections in 
2020. Therefore, lump sum reductions to their Gross National Income-based contribution 
are proposed, which will be gradually phased out. To this end, the gross reductions in the 
Gross  National  Income-based  contributions  granted  to  Denmark,  the  Netherlands  and 
Sweden,  the  reduced  call  rate  for  the  Value  Added  Tax-based  Own  Resource  for 
Germany, the Netherlands and Sweden and the amount of corrections resulting from the 
reduced  contribution  to  the  United  Kingdom  correction  granted  to  Germany,  the 
Netherlands, Austria and Sweden are converted into a corresponding single lump sum for 
each Member State concerned. The ‘rebates on the rebate’ are included in this calculation 
as  they  determine  the  national  contributions  financing  key  of  Member  States  in  2020. 
Abolishing the UK rebate and the Member States contributions to finance it changes the 
financing  key  for  all  Member  States.  While  there  is  an  increasing  financing  share  for 
Germany, the Netherlands, Austria and Sweden, the share in national contributions for all 
other Member States diminishes. The baseline for determining the lump sums is the sum 
of corrections granted in 2020. They will be granted as gross reductions in the Member 
States’ Gross National Income-based contributions and reduced by equal steps over the 
period 2021 and 2025 to be phased out by the end of 2025 (Figure 10). 

32 

 
 
Figure 10 – Phasing out corrections (gross reductions to GNI-based contributions, 2018 
prices)

Source: European Commission Services 

5.  SUMMARY 

The reform of the revenue side could be conceived in a comprehensive way and comprise 
several  elements  yet  without  jeopardising  those  features  of  the  present  system  of  Own 
Resources which have proven their worth.  

The modernisation of existing Own Resources could be achieved through simplification 
and lowering the share of the Gross National Income-based contribution to make it a true 
residual item, balancing the Own Resource system as originally designed.  

The  introduction  of  new  types  of  Own  Resources  would  create  a  more  direct  link 
between  the  budget's  revenue  side  and  EU  policies.  Diversifying  the  revenue  sources 
would make the EU budget more responsive to national evolutions. 

Corrections  will  be  gradually  phased  out  as  they  do  not  correspond  any  more  to  the 
increasing focus on EU added value expenditure.  

33 

 
 
 
 
 
 
PART  3:  A  BASKET  OF  OWN  RESOURCES:  BUILDING  ON  COMPLEMENTARITIES  TO 
ENHANCE FISCAL COHERENCE, RESILIENCE AND FAIRNESS 

This part analyses the merits of proposing a basket of Own Resources for the EU budget. 
Since 1988, when the Commission launched the Single Market project and then enlarged 
to new countries, no new categories of Own-Resources have been introduced. The new 
Own Resource created at that time aimed to ensure financial autonomy and the capacity 
to balance an expenditure driven budget. Since then, the proposed reforms have not been 
approved  for  various  reasons,  including  the  perceived  merits  of  a  simple  and  stable 
system  based  on  national  contributions49.  A  mixture  of  financial  interests,  political  and 
institutional considerations have stood in the way of finding agreement and overcoming 
veto threats ever since (Part I).  

However, the increasing challenges posed by globalisation and digitalisation, the stronger 
integration of European economies and the need to reinforce the sustainability of growth, 
reveal some weaknesses in the current system on both the revenue and expenditure sides. 
The economic and financial crisis, as well as the recent migration crisis, has shown the 
need to increase the reactivity and flexibility of the EU budget. The Mid-Term Review of 
the  Multiannual  Financial  Framework  has  addressed  some  of  these  shortcomings  by 
increasing the flexibility of the expenditure side. 

Section  1  describes  how  the  different  Own  Resources  could  be  phased  in  in  the  EU 
budget,  taking  account  of  the  ongoing  policy  discussions  at  the  EU  level.  Section  2 
highlights  the  increased  fiscal  coherence  between  EU  and  national  budgets  on  the 
revenue  side.  Section  3  describes  how  the  basket  of  Own  Resources  amplifies  the 
existing  adjustment  system  ensured  by  the  Gross  National  Income-based  contribution. 
Section  4  discusses  how  the  coherence  of  reporting  national  contributions  to  the  EU 
budget could be improved. Section 5 concludes. 

1.  TIMING AND PHASING IN OF NEW OWN RESOURCES 

Due to the ratification requirement, Own Resources decisions only enter into force 
with a time lag which can last up to over two years. It can be applied with retroactive 
effect, which in the past has further complicated the working of correction mechanisms. 
However, the allocation of new Own Resources to the EU budget can also start at a later 
stage, or be conditional, for example, upon the coming into effect of a relevant basic act. 

A basket of new Own Resources will provide some fresh money to the EU budget. 
While  most  of  the  proposed  new  revenue  sources  will  not  create  entirely  new  revenue 
streams,  they  are  clearly  linked  to  initiatives  taken  at  EU  level  and  reflect  directly  or 
indirectly the added value of the Own Resources system. In terms of estimated revenue, 
the new Own Resources have the potential to provide a significant share of the necessary 
income.  Depending  on  the  agreed  ceiling  for  payments  under  the  next  Multiannual 
Financial Framework, as  well as on the impact of the proposed  changes to  the existing 
Own Resources (i.e. customs duties and the reformed Value Added Tax) revenues from 
the new Own Resources could provide (i) additional revenues to contribute to the closing 
of  the  financing  gap  (Part  I,  Section  2)  and/or  (ii)  replace  part  of  the  Gross  National 
Income-based contributions (Figure 11).  

49   See  Part  I.  In  2011,  the  Commission  proposed  to  introduce  a  new  Own  Resource  based  on  the 

Financial Transaction Tax and to simplify the Value Added Tax-based Own Resource.  

34 

 
                                                 
Figure 11  – A new basket of Own Resources adding to, or partly replacing, Gross National 
Income-contributions 

Source: European Commission Services 

A basket of new Own Resources could be phased in progressively. Table 2 assumes 
that the Own Resources based on Value Added Tax, the Emissions Trading System and 
Plastic Packaging Waste that is not recycled will be collected as of the entry into force of 
the  Own  Resources  Decision,  whereas  the  Own  Resource  based  on  the  Common 
Consolidated  Corporate  Tax  Base  is  projected  to  'kick  in'  in  2023,  once  the  relative 
legislation is transposed and applied by corporations to declare their taxable profits.  

Table 2 – Reform of the revenue side of the EU budget: phasing in of Own Resources  

% shares 

GNI-based Own Resource 
Value Added Tax-based Own 
Resource 
Traditional Own Resources 

CCCTB-based Own Resource 

ETS-based Own Resource 

Plastic-based Own Resource 

TOTAL Own Resources 

Other revenues 

TOTAL revenues 

2018 

2021 

2022 

2023 

2024 

2025 

2026 

2027 

71 

12 

16 

99 
1 
100 

64 

14 

15 

2 
4 
99 
1 
100 

64 

14 

15 

2 
4 
99 
1 
100 

57 

13 

14 
9 
2 
4 
99 
1 
100 

57 

14 

15 
9 
2 
4 
99 
1 
100 

56 

14 

15 
9 
2 
4 
99 
1 
100 

56 

14 

15 
9 
2 
4 
99 
1 
100 

56 

14 

15 
9 
2 
3 
99 
1 
100 

Average 
2021-2027 
58 

14 

15 
6 
2 
4 
99 
1 
100 

Source: European Commission services long-term projections.  
Call  rates:  Value  Added  Tax-Own  Resource:  2018-21:  0.3%  on  final  base;  as  from  2021:  1%  on  standard-rated  base;  Common 
Consolidated Corporate Tax Base: 3% on tax base; Plastic: EUR 0.80 per kg of non-recycled Plastic Packaging Waste. The Common 
Consolidated Corporate Tax Base-based Own Resource revenues start flowing only in 2023.  
Note:  The  table  is  built  on  purely  illustrative,  smoothed  figures:  it  takes  as  starting  point  the  2016  outturns  or  2018  adopted 
projections,  and  applies  to  them  the  growth  rates  of  Gross  Domestic  Product  in  the  long-term  projections  developed  by  the 
Commission  for  e.g.  the  Sustainability  report,  also  used  to  project  Multiannual  Financial  Framework  expenditure.  Conversely,  the 
revenues from Plastic Packaging Waste and Emissions Trading System Own Resources are estimated to remain stable over time in 
nominal terms.  
Note: This presentation does not include the United Kingdom’s payments on outstanding commitments and liabilities at the end of 
2020 due in line with the terms agreed in the draft withdrawal agreement. 

Comparing the present revenue composition in 2018 with that projected in 2027 shows 
the  continuity  and  the  innovation  in  the  reform  of  the  EU  budget.  Under  the  current 
system,  depending  on  the  year  and  the  stage  of  the  annual  budget  cycle,  the  Gross 
National  Income-based  Own  Resource  covers  between  two  thirds  and  three  quarters  of 
total revenue. Once the new Own Resources are introduced, the Gross National Income 
would  cover  more  than  half  of  total  revenue  and  would  continue  to  'absorb'  the 
fluctuations of annual payments from the EU budget. 

35 

 
 
 
 
 
 
 
2.  COMPLEMENTARITIES WITH NATIONAL BUDGETS: INCREASED FISCAL COHERENCE 

ON THE REVENUE SIDE 

2.1.  Complementarities  between  EU  and  national  level:  Structure  of  the 

budget 

The  diversification  of  Own  Resources  enhances  the  EU  dimension  of  budget 
revenues.  As  shown  in  Figure  10,  the  degree  of  national  and  supranational  decision-
making  matches  with  the  link  to  EU  competences  for  each  proposed  Own  Resource. 
More upwards and rightwards in the matrix are the revenue sources satisfying both these 
criteria of fiscal coherence50.   

Figure 12 – Assessment matrix for Own Resources 

Source: European Commission Services adapted from the final report of the High-Level Group on Own Resources. 

The "basket" approach puts back genuine Own Resources in terms of linking them to key 
EU policies. It displays a strong relation to EU policies and the need to act at EU level 
when  it  comes  to  address  negative  externalities  (greenhouse  gas  emissions,  plastic 
waste).  At  the  same  time,  they  are  also  linked  to  the  benefits  of  the  internal  market 
generated  by  trade  and  tax  harmonisation.  EU  initiatives  on  Value  Added  Tax  and 

50   On the competences between the EU and Member States, see Lipatov V., Weichenrieder A., (2016), The 
subsidiarity  principle  as  a  guideline  for  financing  the  European  Budget,  in  The  Future  of  EU-Finances, 
Working Papers for the Brussels Symposium on 14 January 2016, by T. Buettner and M. Thöne (eds.). See 
also Barbier-Gauchard, European public expenditures: Community level and National level. In EU Budget 
and  National  Budgets:  Facts,  figures  and  Impact.  Study,  European  Parliament,  Directorate  General  for 
Internal  Policies.  On  the  structure  of  budgetary  revenues,  see  A.  Boiar  (2015),  Optimal  structure  of 
International Union budgetary revenues. Romanian Journal of Economics, Institute of National Economy, 
vol. 40(1(49)), pp 72-88. 

36 

 
 
                                                 
corporate  taxation  contribute  to  ensuring  a  level  playing  field  for  companies  and 
consumers.  

As a result, the composition of the EU budget revenue side would be more akin to 
the  structure  of  national  budgets51  (Figure  13;  Box  6).  Depending  on  the  call  rates 
applied, the EU budget could get a significant share from consumption tax (Value Added 
Tax),  corporate  income  tax  (Common  Consolidated  Corporate  Tax  Base)  and  from 
environmental  contributions  (Emissions  Trading  System,  plastic).  The  rest  would  be 
financed  by  a  Gross  National  Income-contribution  (which  can,  in  some  sense,  loosely 
mirror the role of personal income tax revenues in national budgets).  

Currently,  most of national  budget revenues  come from personal income tax, including 
social  contribution.  Consumption  taxes  are  also  a  substantial  source  of  revenues  while 
environmental  revenues  constitute  a  lower  share,  and  account  for  6.7%  of  national  tax 
revenues on average.  

Figure 13 – Composition of revenues in Member States and new proposed EU budget 

Source: European Commission Services, based on Eurostat.  
Note:  The  chart  presents  a  backward  simulation  of  how  the  EU  budget  could  have  been  funded,  compared  with  average  of  the  27 
national budgets, based on Eurostat data for 2011-2016, weighted with Gross National Income. Personal income-based revenues also 
include  social  contributions.  EU  budget  revenues  comprise  the  Gross  National  Income-based  and  Value  Added  Tax-based 
contributions (average over 2011-2016), Common Consolidated Corporate Tax Base revenues (3% call rate) which are based on 2012 
estimates made with the CORTAX model, and environmental-based revenues that include the Emissions Trading System- and Plastic-
based Own Resources (2016 estimates). 

Box 6: Comparison of budget structure in federal systems 

In size, the EU budget will remain relatively small  (around 1% of EU  Gross  National Income) 
and cannot be compared to the size of national budgets where the share of revenues varies from 
26% of Gross Domestic Product in Ireland to 53% in Denmark and France). However, the basket 
of  new  Own  Resources  would  considerably  change  the  structure  of  the  EU  budget,  making  it 
more comparable to national ones. 

Figure A shows the composition of different sources of revenues allocated between the levels of 
government  for  Germany,  the  United  States  and  the  EU.  For  Germany  and  the  United  States, 
"non-federal" consists of tax income revenues at the state/regional and local levels. In the United 
States, corporate income tax is mainly a federal revenue and consumption  (sales)  tax  a state or 

51   Note  that  in  general,  the  comparison  between  EU  and  national  budget  is  done  for  expenditures.  See 
Mathis  A.,  (2014),  Key  figures  on  National  Budgets  and  EU  budget.  In  EU  Budget  and  National 
Budgets:  Facts,  figures  and  Impact.  Study,  European  Parliament,  Directorate  General  for  Internal 
Policies. 

37 

 
 
 
                                                 
local  one.  In  Germany,  the  main  taxes  are  shared  between  the  federal  and  state  government 
levels, whereas social contributions are managed by a separate entity at federal level. 

All these systems are not comparable in terms of governance and institutions, but in most cases, 
central and national budgets display some form of relationship in terms of structure and size of 
revenues52.  At  present,  the  EU  has  a  remarkably  high  share  of  national  contributions  based  on 
Gross National Income and little direct relationship with national budgets. 

Figure A – Revenues by level of governance in the EU and in two federal systems 

Source: European Commission Services. 
Note: The data are presented as a percentage of Gross Domestic Product (and of the EU-27 total Gross National Income for the EU 
Budget). 

Overall the diversification of revenues of the EU budget would not concentrate the 
burden  on  a  few  Member  States.  The  underlying  bases  for  the  new  Own  Resources 
States  in  recent  years  have  been  comparable  to  that  of  Gross  National  Income  (Figure 
14).  The  coefficients  of  variation  across  countries  of  Gross  National  Income,  Value 
Added Tax and corporate income tax are all around 1.6 over the 2011-2015 period. For 
plastics and the Emissions Trading System, they are even lower.  

Figure 14 – Variability of Gross National Income and candidate Own Resources  

Source: European Commission Services, based on Eurostat (national revenue and Gross National Income data).  
Note: minimum, maximum and quartiles values of the distribution of each resource are scaled to the respective median value (used as 
numéraire).  

52   See  Hagelstam  K.,  and  al.  (2017),  The  Fiscal  Governance  Frameworks  of  the  United  States  and  the 
European  Union:  Comparing  'Apples  and  Pears'.  European  Parliament,  Economic  Governance  Support 
Unit.  

38 

 
 
 
                                                 
2.2.  Complementarities between the EU and the national level: the cyclicality 

of the basket of Own Resources 

The revenue profile of each Own Resource differs (Figure 15). Looking at the cyclical 
fluctuations over the past two decades, Value Added Tax revenues follow quite closely 
the  economic  cycle,  whereas  among  the  newly  proposed  Own  Resources  the  corporate 
tax  is  expected  to  experience  wider  fluctuations,  judging  from  past  swings  in  taxable 
corporate income.  

By  contrast,  revenues  from  Plastic  packaging  waste-related  contributions  can  be 
considered as less cyclical as they are determined both by economic activity and by the 
policy  undertaken  in  these  areas.  As  regards  the  Emissions  Trading  System  Own 
Resource,  experience  shows  that  the  revenues  from  the  auctioning  of  allowances  are 
correlated  with  economic  activity,  as  well  as  with  the  EU  policy  targets  in  both  the 
climate  mitigation  and  the  renewables  sector.  Emissions  Trading  System  revenues  are 
also strongly influenced by exogenous factors such as the relative price of gas relative to 
coal. The specific evolution of the Emissions Trading System revenues in the 2013-2016 
period displayed in Figure 15 is furthermore explained by the introduction of legislative 
measures to address the surplus of allowances on the EU carbon market.  

Figure 15 – Developments of Gross National Income and (candidate) Own Resources  

Source: European Commission Services.  
Note: Annual % change of the respective bases on which Own Resources are (to be) calculated. EU-27 (without UK), current prices in 
EUR except for plastics (quantity). For Value Added Tax and Corporate Income Tax, the respective national tax receipts are shown; 
for Plastic, the quantity of non-recycled Plastic Packaging Waste; for Emissions Trading System, the quantity of allowances available 
for auctioning. For Gross National Income actual dynamics are depicted. 

The  revenue  cycles  could  make  the  different  Own  Resources  complementary.  One 
advantage  of  having  a  basket  that  includes  a  plurality  of  Own  Resources  with 
differentiated responses to the cycle is that the ups and downs in their annual revenues 
might compensate each other, contributing to a greater stability of the basket as a whole – 
and  hence  of  EU  budget  revenues.  However,  the  tax  base  of  environmental  Own 
Resource is smaller, which means that these Own Resources may only partially dampen 
the fluctuations in the more cyclical ones. 

39 

 
 
3.  THE IN-BUILT BURDEN-SHARING MECHANISM OF EU FINANCING 

The  adjustment  mechanism  played  by  the  Gross  National  Income  will  be 
amplified53.  The  Gross  National  Income-contribution  is  determined  by  the  difference 
between  expenditure  and  other  resources  and  revenues.  As  expenditure is  decided  on  a 
multiannual basis, it remains quite stable and independent from national economic cycles 
(Part  I).  This  has  played  a  buffering  role  during  the  economic  and  financial  crisis.  For 
example, recent evolutions show that EU investment funds have played a positive role, 
maintaining  public  investment  in  those  countries  hit  by  the  crisis,  such  as  Greece, 
Portugal, Slovenia and Cyprus (Figure 16).  

Figure 16: Share of EU Investment Funds in national government investment 

* EU Investment fund corresponds to Heading 1 of the EU budget. 
Source: AMECO and European Commission Services 

In order to maintain the level of EU expenditure during an adverse business cycle in one 
or  more  Member  States,  Gross  National  Income  contributions  take  up  the  slack  in  the 
other Own Resources. Any potential decrease of revenues needs to be compensated by a 
higher  Gross  National  Income  contribution  which  is  shared  among  Member  States 
according to their Gross National Income. The mechanism works already with the current 
structure of EU revenues. More cyclical revenues would amplify this mechanism.  

As  a  result,  more  cyclical  revenues  for  the  EU  would  better  sustain  national 
economies  hit  by  potential  asymmetric  shocks.  The  greater  cyclicality  of  revenues 
from  the  basket  would  reduce  the  contributions  to  the  EU  of  the  Member  States  in 
question  more  than  proportionally  (i.e.  compared  with  Gross  National  Income-based 
Own Resource only), while the other Member States would share the extra burden. Thus, 
the basket would ensure an in-built capacity to provide support to one or more Member 
States  hit  by  an  asymmetric  shock  (see  Box  7).  Conversely,  in  the  case  of  symmetric 
shocks  the  residual  Gross  National  Income  contribution  would  increase  proportionally 
for  all  Member  States,  ensuring  that  the  impact  is  equally  distributed  (i.e.  no  relief  for 
specific countries).  

53   For the smoothing effect of the current system, see Buettner T., Revenue smoothing by the EU funding 
system,  in  The  Future  of  EU-Finances,  Working  Papers  for  the  Brussels  Symposium  on  14  January 
2016, Edited by T. Buettner and M. Thöne. 

40 

 
 
 
                                                 
Figure  17  shows  what  the  composition  of  EU  revenues  would  have  been  in  the  past 
decade if the new Own Resources had already been in place54. The more cyclical 'fiscal 
revenues' would have dropped, needing Gross National Income call rates to increase. The 
reverse would have happened in the economic recovery phase.  

Mirroring  the  higher  cyclicality  of  the  basket  of  Own  Resources,  the  Gross  National 
Income call rates would have been lower and would also have fluctuated more (see the 
lower marks in Figure 18).  

Figure 17 – Backward simulation of EU revenue composition with basket of Own Resources 

Source: European Commission Services 

Figure 18 – Gross National Income call rates: actual and simulated (with basket of Own 
Resources) 

Source: European Commission Services 

Positive  economic  developments  would  also  have  a  distributive  impact,  i.e.  all 
countries would benefit from increased revenues from EU instruments, but to a different 
extent. For instance, in 2015, Emissions Trading System revenues increased by EUR 1.7 
billion.  Had  the  EU  Emissions  Trading  System  already  been  part  of  the  EU  Own 
Resources,  by  itself  this  revenue  would  have  helped  reduce  Gross  National  Income-
contributions for everyone, including the most carbon intensive economies.  

Box 7: Amplifying the in-built burden sharing mechanism.  

54   For simplicity excluding Traditional Own Resources 

41 

 
 
 
                                                 
1. Assume that the total Own  Resources  required  to finance the EU budget are constant over a 
period of time and that Gross National Income is also constant in each Member State over that 
period.  

2. In year n the Common Consolidated Corporate Tax Base revenues in country A drop sharply 
compared with n-1, e.g. by EUR 4 billion;  

3. For simplicity, assume that a 5% EU call rate on the corporate tax base is equal to one-tenth of 
national revenues: this implies an initial EUR 400-million shortfall for the EU budget; 

4. In order to offset the EUR 400 million, a differentiated basket of Own Resources would make 
it  possible  that  the  shortfall  is  offset  entirely  within  the  budget  (e.g.  through  an  increase  in 
Common Consolidated Corporate Tax Base revenues from other countries), although it is equally 
possible that the overall impact is deepened (simultaneous decrease of several Own Resources). 
In  any  case,  the  Gross  National  Income  contribution  will  play  its  role  of  balancing  item:  for 
simplicity, let's say that it will increase by EUR 400 million, via a proportionally higher call rate 
on every Member State. Country A will also pay a higher Gross National Income contribution, in 
proportion to its weight on the total. 

In sum, this simulation shows the interplay of two mechanisms, both relieving a country hit by an 
asymmetric shock from bearing its whole burden. Of course, in this example, country A would 
still bear nine-tenths of its revenue shortfall and pay a smaller additional Gross National Income 
contribution.  This  minimises  the  wrong  incentives  for  country  A,  e.g.  to  avoid  making  high 
efforts to collect taxes. 

Although  the  example  is  fictitious,  it  illustrates  how  the  mechanism  could  have  worked  during 
the  recent  economic  and  financial  crisis.  Had  a  corporate-income-based  Own  Resource  been 
present then, the EU budget could have slightly relieved some Member States from bearing the 
burden of its revenue shock, by automatically sharing it with the other Member States not hit by 
the shock.  

4.  REPORTING  EU  CONTRIBUTIONS  IN  NATIONAL  BUDGETS:  HETEROGENEITY 

ACROSS MEMBER STATES  

As  mentioned  above  the  EU  budget  is  characterised  by  a  high  proportion  of  national 
contributions  compared  to  other  areas.  These  contributions  aim  to  finance  EU  public 
goods as well as other more nationally based expenditures.  

At  present,  the  description  and  classification  of  contributions  to  the  EU  budget  in 
Member  States'  accounts  and  budgets  vary  widely.  Despite  the  high  degree  of 
harmonisation of national accounts, which is framed by the Regulation on the European 
System of Accounts55, only a few Member States (notably Austria, France, Germany and 
Romania) classify EU contributions in their budget as an attribution of fiscal receipts (or 
'negative  income').  Most  Member  States  treat  them  as  government  expenditure.  Some 
Member States differentiate between the Gross National Income -based contributions, the 
Value Added Tax-based contributions and the traditional Own Resources (table 3)56.  

Table 3: Overview of the treatment of contributions to the EU budget  

55   Regulation  549/2013  of  the  European  Parliament  and  the  Council  of  21  May  2013  on  the  European 
system of national and regional accounts in the European Union (ESA 2010) covers the reporting of 
public  finances  and  specifies  very  precisely  how  the  own  resources  should  be  reflected  in  national 
accounts:  recording  of  taxes  which  are  collected  by  national  governments  on  behalf  of  the  EU  (e.g. 
custom  duties)  is  prescribed  in  article  4.25  and  recording  of  Value  Added  Tax-  and  Gross  National 
Income-based resources is prescribed in article 4.140. 

56   How  do  Member  States  handle  contributions  to  the  EU  budget  in  their  national  budgets?  Study 
conducted  by  the  Centre  for  European  Policy  Studies  for  the  European  Parliament's  Committee  on 
Budgets, 17.7.2014.  

42 

 
                                                 
Value Added Tax 

Gross National Income  

Traditional Own 
Resource 

Reduction in federal 
government's receipts (an 
attribution to the sub-national 
entities)  

Government expenditure  

Member 
State 
BE 

FR 

DE 
BG 

CZ  
DK  
EE  
IE  
ES  
IT  

CY 

LT 

LU 

HR 

Central government 
expenditure  
Expenditure (transfers) by the 
Ministry of Finance  

Deduction from the 
government revenues 

NL 

Government expenditure 

AT  

PL  

PT  
RO 

FI 
SE 

Government expenditure 
Government expenditure 

A levy on state revenue (an 
equivalent to the attributions to 
the local governments)  
Reduction in government income  
An attribution of government 
receipts  
Separate government expenditure  
Government expenditure  
Government expenditure 
Government expenditure 
Central government expenditure 
Central government expenditure   Central government 

Expenditure (transfers) by the 
Ministry of Finance  

Expenditure on general public 
services  
Government expenditure 

Government expenditure 
("International membership fees 
and payments to the EU")  
Government expenditure 

Negative income (on the income 
side of the budget), i.e. a 
"reduction of earnings and 
deposits to public expenditures"  
Government expenditure ("Own 
Resources of the European 
Union") 
Central government expenditure 
Deduction from the receipts from 
the EU budget (not an attribution 
of government revenue nor 
government expenditure)  
Government expenditure  
Government expenditure 

expenditure  
Expenditure (transfers) 
by the Ministry of 
Finance  

Deduction from the 
government revenues 

Government expenditure 
(sugar levies)  

Government expenditure 
(customs tariffs, sugar 
fees)  

Source: based on European Parliament study (2014), How do Member States handle contributions to the EU budget in their national 
budget. 

Member States apply inconsistent accounting rules to their contributions to the EU 
budget.  Although  different  treatments  in  national  budgets  are  made  neutral  for  the 
purpose of fiscal surveillance (i.e. they ensure compliance with the Stability and Growth 
Pact), reporting national contributions as government expenditure may have implications 
on the way the EU budget is portrayed in national political debates.  

The ratification of the Own Resources decision by national parliaments should shield it 
from  interference  during  Member  States'  annual  budgetary  sessions:  even  if  classified 

43 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
under  government  expenditure,  the  transfers  due  to  the  EU  should  be  ring-fenced  from 
any  spending  cuts  or  reallocations,  as  well  as  from  any  spending  review  exercises  or 
other  mechanisms  to  attribute  revenues  and  expenditure  across  levels  of  government. 
However,  defining  those  transfers  as  an  outlay  of  national  governments  may  lend 
arguments to politicians who see the EU uniquely as a burden and ignore its added value.   

A  more  harmonised  reporting  at  national  level  would  herald  a  willingness  to 
improve  fiscal  coherence.  As  the  final  report  of  the  High  Level  Group  on  Own 
Resources  points  out,  the  above-mentioned  inconsistencies  are  indicative  of  the 
prevailing  perception  of  Own  Resources  payments  as  a  national  'transfer'  to  the  EU 
budget. As a step towards more fiscal coherence between the national and EU level, the 
competent authorities could treat the 'national contribution' in a more consistent manner. 
National budgets should clearly indicate that these are public revenues to be allocated to 
the EU level rather than expenditure items in competition with other public investment. 

5.  SUMMARY 

The  diversification  of  revenue  sources  would  bring  some  benefits  compared  to  the 
current system. It builds on the major improvements made in the past -  the introduction 
of  the  Gross  National  Income  contribution  as  a  balancing  item  –  and  exploits  the 
mechanism in a way that would make the revenue side of the EU budget closer to EU and  
national evolutions.   

From a policy perspective, the basket of Own resources would increase the link between 
the  revenue  side  of  the  EU  budget  and  key  EU  policies  (climate  change,  environment, 
Single Market).  

From a budgetary perspective, it would provide fresh money and improve the synergies 
between the revenue and expenditure side.  

From  an  economic  perspective,  the  basket  of  new  Own  Resources  would  increase  the 
flexibility  of  the  revenue  side  of  the  EU  budget  given  the  different  cyclical  pattern  of 
these  Own  Resources.  Furthermore,  it  would  amplify  the  in-built  burden  sharing 
mechanism and the smoothing effect of the EU budget and assimilate it better to national 
economic developments.  

44 

 
45 

B 2018Net sugar sector levies (80 %)Net customs duties (80 %)Total net traditional own resources (80 %)p.m.   Collection costs (20% of gross TOR)VAT-based own resources GNI-based own resources Reduction in favour of: Denmark, Netherlands and SwedenUnited Kingdom correctionTotal 'national contributions'Share in total 'national contributions' (%)(1)(2)(3)=(1)+(2)(4)(5)(6)(7)(8)(9)=(5)+(6)+(7)+(8)(10)(11)=(3)+(9)Belgium 0   2.473.200.000   2.473.200.000   618.300.000   562.615.800   2.903.751.024   31.084.353   242.848.053   3.740.299.230  3,12% 6.213.499.230  Bulgaria 0   88.100.000   88.100.000   22.025.000   71.622.900   328.618.305   3.517.825   27.483.181   431.242.211  0,36% 519.342.211  Czech Republic 0   287.500.000   287.500.000   71.875.000   219.838.200   1.169.417.228   12.518.490   97.801.325   1.499.575.243  1,25% 1.787.075.243  Denmark 0   377.700.000   377.700.000   94.425.000   342.184.800   1.988.878.554  - 120.268.697   166.334.951   2.377.129.608  1,98% 2.754.829.608  Germany 0   4.731.600.000   4.731.600.000   1.182.900.000   2.093.050.050   22.179.140.343   237.425.396   319.035.307   24.828.651.096  20,69% 29.560.251.096  Estonia 0   32.900.000   32.900.000   8.225.000   34.618.800   150.570.131   1.611.838   12.592.561   199.393.330  0,17% 232.293.330  Ireland 0   305.400.000   305.400.000   76.350.000   258.161.700   1.586.323.054   16.981.424   132.668.215   1.994.134.393  1,66% 2.299.534.393  Greece 0   177.100.000   177.100.000   44.275.000   222.046.800   1.228.008.524   13.145.704   102.701.463   1.565.902.491  1,31% 1.743.002.491  Spain 0   1.712.500.000   1.712.500.000   428.125.000   1.588.284.900   7.831.230.835   83.832.514   654.945.669   10.158.293.918  8,47% 11.870.793.918  France 0   1.749.800.000   1.749.800.000   437.450.000   3.133.713.300   15.579.982.522   166.782.096   1.302.993.398   20.183.471.316  16,82% 21.933.271.316  Croatia 0   52.600.000   52.600.000   13.150.000   72.490.800   315.289.647   3.375.143   26.368.472   417.524.062  0,35% 470.124.062  Italy 0   2.095.900.000   2.095.900.000   523.975.000   1.996.195.200   11.417.664.921   122.224.918   954.888.235   14.490.973.274  12,08% 16.586.873.274  Cyprus 0   21.900.000   21.900.000   5.475.000   27.833.700   121.059.189   1.295.926   10.124.487   160.313.302  0,13% 182.213.302  Latvia 0   48.000.000   48.000.000   12.000.000   34.150.500   182.476.056   1.953.387   15.260.935   233.840.878  0,19% 281.840.878  Lithuania 0   87.400.000   87.400.000   21.850.000   52.562.400   268.745.684   2.876.895   22.475.882   346.660.861  0,29% 434.060.861  Luxembourg 0   22.000.000   22.000.000   5.500.000   59.204.550   257.502.768   2.756.540   21.535.609   340.999.467  0,28% 362.999.467  Hungary 0   157.000.000   157.000.000   39.250.000   157.682.400   808.637.255   8.656.378   67.628.382   1.042.604.415  0,87% 1.199.604.415  Malta 0   13.200.000   13.200.000   3.300.000   15.690.300   68.242.993   730.534   5.707.334   90.371.161  0,08% 103.571.161  Netherlands 0   2.746.600.000   2.746.600.000   686.650.000   469.998.750   4.798.219.225  - 705.434.085   69.019.868   4.631.803.758  3,86% 7.378.403.758  Austria 0   221.100.000   221.100.000   55.275.000   519.125.400   2.427.051.517   25.981.335   34.911.864   3.007.070.116  2,51% 3.228.170.116  Poland 0   705.200.000   705.200.000   176.300.000   597.816.000   3.054.180.887   32.694.690   255.428.883   3.940.120.460  3,28% 4.645.320.460  Portugal 0   154.700.000   154.700.000   38.675.000   289.464.300   1.261.617.229   13.505.482   105.512.244   1.670.099.255  1,39% 1.824.799.255  Romania 0   162.200.000   162.200.000   40.550.000   205.819.200   1.222.656.183   13.088.408   102.253.833   1.543.817.624  1,29% 1.706.017.624  Slovenia 0   77.400.000   77.400.000   19.350.000   60.011.100   280.092.333   2.998.359   23.424.831   366.526.623  0,31% 443.926.623  Slovak Republic 0   105.300.000   105.300.000   26.325.000   90.016.800   564.933.530   6.047.555   47.246.822   708.244.707  0,59% 813.544.707  Finland 0   154.100.000   154.100.000   38.525.000   288.650.400   1.479.930.609   15.842.504   123.770.345   1.908.193.858  1,59% 2.062.293.858  Sweden 0   548.000.000   548.000.000   137.000.000   321.624.300   3.291.292.047  - 166.217.026   47.343.511   3.494.042.832  2,91% 4.042.042.832  United Kingdom 0   3.535.600.000   3.535.600.000   883.900.000   3.465.086.700   15.973.262.111   170.992.114  - 4.992.305.660   14.617.035.265  12,18% 18.152.635.265  Total   0   22.844.000.000   22.844.000.000   5.711.000.000   17.249.560.050   102.738.774.704   0  0 119.988.334.754  100,00% 142.832.334.754  Total own resources in % of GNI :p.m.own resources: 142.832.334.754  +142.832.334.754other revenue: 1.848.645.936  ---------------------------------------=0,91%=15.747.670.000.000total revenue: 144.680.980.690  =Ceiling of the own resources in % of GNI :  1,20 %total expenditure: 144.680.980.690  TABLE 7Member StateTraditional own resources (TOR)VAT- and GNI-based own resourcesTotal own resourcesSummary of financing of the general budget by class of own resource and by Member State