CELEX: 51988PC0137
Language: en
Date: 1988-03-16
Title: PROPOSAL FOR A COUNCIL DECISION ON THE SYSTEM OF THE COMMUNITIES' OWN RESOURCES ( .../EEC, EURATOM, ECSC )

No C 102/8                              Official Journal of the European Communities                               16. 4. 88
               Proposal for a Council Decision on the system of the Communities' own resources (EEC,
                                                       Euratom, ECSC)
                                                      COM(88) 137 final
                              (Submitted by the Commission to the Council on 17 March 1988)
                                                         (88/C 102/07)
               (This proposal amends and replaces COM(87) 420 final of 31 July 1987, sent to the Council on
                                                         4 August 1987)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,                           Whereas the European Council meeting in Brussels on
                                                                   11, 12 and 13 February 1988 reached certain
Having regard to the Treaty establishing the European              conclusions;
Economic Community, and in particular Article 201
thereof,
                                                                   Whereas, in accordance with these conclusions, the
Having regard to the Treaty establishing the European              Community will, for each year between now and 1992,
Atomic Energy Community, and in particular Article 173             be assigned a maximum amount of own resources corre-
thereof,                                                           sponding to 1,2 °/o of the total of the Member States'
                                                                   gross national product for the year at market prices,
Having regard to the proposal from the Commission,                 hereinafter referred to as ' G N P ' ;
Having regard        to  the   opinion   of   the  European
Parliament,                                                        Whereas observance of this ceiling is based on main-
                                                                   tenance of a strict relationship between commitment
Having regard to the opinion of the Economic and                   appropriations and payment appropriations, implying an
Social Committee,                                                  overall volume of commitment appropriations corre-
                                                                   sponding in 1992 to 1,3 % of Member States' G N P ;
Whereas Article 199 of the Treaty establishing the
European Economic Community requires that all
estimated items of revenue and expenditure be included             Whereas these ceilings should remain applicable until this
in the budget; whereas the budget shall be in balance;             Decision is amended;
Whereas the Council Decision of 7 May 1985 on the
Communities' system of own resources ('), hereinafter              Whereas, with a view to matching the resources paid by
referred to as 'the Decision of 7 May 1985', raised to             each Member State more closely with its ability to
 1,4 °/o the limit on the rate applied to the uniform value        contribute, the composition of Community own
added tax base previously set at 1 % by the Council                resources must be amended and enlarged; whereas it is
Decision of 21 April 1970 on the replacement of                    necessary for this purpose:
financial contributions from Member States by the
Communities' own resources (2) hereinafter referred to             — to fix at 1,4 % the maximum rate to be applied to
as 'the Decision of 21 April 1970',                                    each Member State's uniform base for value added
                                                                       tax, hereinafter referred to as VAT, limited where
Whereas the resources available within the limit of 1,4 %              appropriate to 55 % of its GNP,
are no longer sufficient to cover the estimates of
Community expenditure;
                                                                   — to introduce an additional type of resource to
Whereas the Community must be provided with stable                     balance budget revenue and expenditure, based on
and guaranteed financial means to be able to operate the               the sum of Member States' G N P ; for this purpose,
common policies, improve the present situation and                     the Commission will introduce a directive on the
ensure a sufficiently lengthy period of budgetary                      application of the rules governing the establishment
security;                                                              of GNP,
Whereas the Single European Act opens up new possi-
                                                                   — to provide for the possibility of new resources
bilities to the Community; whereas Article 8a of the
                                                                       connected with economic and tax harmonization in
Treaty establishing the European Economic Community
                                                                       the Community;
provides for the completion of the internal market by 31
December 1992;
                                                                   Whereas the customs duties on products coming under
                                                                   the Treaty establishing the European Coal and Steel
C) OJ No L 128, 14. 5. 1985, p. 15.                                Community should be included in Community own
(2) OJ No L 94, 28. 4. 1970, p. 19.                                resources;
 ---pagebreak--- 16. 4. 88                              Official Journal of the European Communities                              No C 102/9
Whereas an agreement has been reached by the                                                Article 2
Parliament, the Council and the Commission (budgetary
discipline);                                                      1.     Revenue from the following shall constitute own
                                                                  resources entered in the budget of the Communities:
Whereas the conclusions of the European Council of 25
                                                                  (a) levies, premiums, additional or compensatory
and 26 June 1984 on the correction of budgetary
                                                                       amounts, additional amounts or factors and other
imbalances will have to be adjusted to take account of
                                                                       duties established or to be established by the
the capping of the VAT base and the introduction of an
                                                                       institutions of the Communities in respect of trade
additional resource; whereas this adjustment should
                                                                       with non-member countries within the framework of
ensure that the VAT share of the United Kingdom will
                                                                       the common agricultural policy, and also contri-
be replaced by its share of payments under the third and
                                                                       butions and other duties provided for within the
fourth resources and that the effect on the United
                                                                       framework of the common organization of the
Kingdom in respect of a given year of the introduction
                                                                       markets in sugar;
of the fourth resource which is not compensated by this
change will be offset by an adjustment to the compen-
sation in respect of that year; whereas the contributions         (b) Common Customs Tariff duties and other duties
of Spain and Portugal to the financing of the correction               established or to be established by the institutions of
should be reduced in accordance with the rebates                       the Communities in respect of trade with non-
provided for in Articles 187 and 374 of the Act                        member countries and customs duties on products
concerning the conditions of accession of the Kingdom                  coming under the Treaty establishing the European
of Spain and the Portuguese Republic and the                           Coal and Steel Community;
adjustments to the Treaties (');
                                                                  (c) the application of a uniform rate valid for all
Whereas when the Community budget contains a                           Member States to the assessment base for value
monetary reserve, hereinafter referred to as the 'EAGGF                added tax which is determined in a uniform manner
monetary reserve', to offset the impact of significant and             for Member States according to Community rules;
unforeseen fluctuations in the ECU/dollar parity on the                however the assessment base for any Member State
expenditure under the Guarantee Section of the                         to be taken into account for the purposes of this
European Agricultural Guidance and Guarantee Fund,                     Decision shall not exceed 55 % of its G N P ;
this Decision must provide for it to be covered by special
provisions;
                                                                  (d) the application of a rate — to be determined under
                                                                       the budgetary procedure in the light of the total of
Whereas provisions must be laid down to cover the                      all other revenue — to the sum of all the Member
changeover from the system introduced by the Decision                  States' GNP.
of 7 May 1985 to that arising from this Decision;
                                                                  Revenue deriving from any new charges introduced
Whereas the European Council of 11, 12 and 13                     within the framework of a common policy, in
February 1988 provided that this Decision should take             accordance with the Treaty establishing the European
effect on 1 January 1988,                                         Economic Community or the Treaty establishing the
                                                                  European Atomic Energy Community, provided the
                                                                  procedure laid down in Article 201 of the Treaty estab-
HAS LAID DOWN THESE PROVISIONS, WHICH IT                          lishing the European Economic Community or in Article
RECOMMENDS TO THE MEMBER STATES FOR                                173 of the Treaty establishing the European Atomic
ADOPTION:                                                         Energy Community has been followed, shall constitute
                                                                  own resources entered in the budget of the Communities.
                         Article 1
                                                                  2.     The sum of the VAT payments         under paragraph
The Communities shall be allocated resources of their             1 (c) and Article 5 (2) must reach        for at least one
own in accordance with the following Articles in order            Member State but shall not exceed        for any Member
to ensure that their budget is in balance.                        State an amount corresponding to 1,4     % of its base.
The budget of the Communities shall, irrespective of
                                                                  3.     The Member States shall retain, by way of
other revenue, be financed            entirely from      the
                                                                  collection costs, 10 % of the amounts paid under para-
Communities' own resources.
                                                                  graphs 1 (a) and 1 (b).
                                                                  4.     The rate fixed under paragraph 1 (d) shall apply to
(') OJ No L 302, 15. 11. 1985, p. 23.                             the G N P of each Member State.
 ---pagebreak--- N o C 102/10                            Official Journal of the European Communities                                  16. 4. 88
5.    If, at the beginning of the financial year, the budget          (b) applying the difference thus obtained to total
has not been adopted, the previous uniform VAT rate                        allocated expenditure;
and rate applicable to Member States' GNP, without
prejudice to whatever provisions may be adopted in
accordance with Article 8 (2) by reason of the entry of               (c) multiplying the result by 0,66.
an EAGGF monetary reserve in the budget, shall remain
applicable until the entry into force of the new rates.
                                                                   2. The reference compensation is the correction resulting
                                                                      from application of (a), (b) and (c) below, corrected
                                                                      by the benefits accruing to the United Kingdom from
6.    By way of derogation from paragraph 1 (c) if, on 1              the changeover to capped VAT and the payments
January of the financial year in question, the rules for              referred to in Article 2 (1) (d).
determining the uniform basis for assessing VAT are not
yet applied in all the Member States, the financial contri-
bution to the budget of the Communities to be made by                 It shall be established by:
a Member State not yet applying this uniform basis shall
be determined according to the proportion of its gross
national product at market prices to the sum total of the             (a) calculating the difference,       in the   preceding
gross national product of the Member States at market                      financial year, between
prices in the first three years of the five-year period                    — the percentage share of the United Kingdom
preceding the year in question. This derogation shall                          in the sum total of VAT payments which
cease to have effect as soon as the rules for determining                      would have been made during that financial
the uniform basis for assessing valued added tax are                           year, including adjustments in respect of
applied in all Member States.                                                  earlier financial years, for the amounts
                                                                               financed by the resources referred to in Article
                                                                               2 (1) (c) and (d) if the uniform VAT rate had
                                                                               been applied to non-capped bases, and
                           Article 3
                                                                           — the percentage share of the United Kingdom
1.    The total amount of own resources assigned to the                        in total allocated expenditure;
Communities may not exceed 1,20 % of the total GNP
of the Community.
                                                                      (b) applying the difference thus obtained to total
                                                                           allocated expenditure;
2.    The commitment appropriations entered in the
general budget of the Communities may not exceed                      (c) multiplying the result by 0,66;
1,30 % of the total GNP of the Community.
                                                                      (d) taking the difference between the payments by the
                                                                           United Kingdom taken into account in the first
                           Article 4                                       indent of paragraph 2 (a) and the first indent of
                                                                           paragraph 1 (a);
The United Kingdom shall be granted a correction in
respect of budgetary imbalances. This correction shall
consist of a basic amount and an adjustment. The                      (e) subtracting the amount calculated at (d) from the
adjustment shall correct the basic amount to a reference                   amount calculated at (c).
compensation amount.
                                                                   3. The basic amount is adjusted in such a way as to
                                                                      correspond to the reference compensation amount.
1. The basic amount shall be established by:
                                                                                              Article 5
   (a) calculating the difference,       in   the  preceding
        financial year, between                                    1.    The cost of the correction shall be borne by the
        — the percentage share of the United Kingdom               other Member States in accordance with the following
             in the sum total of the payments referred to in       arrangements:
            Article 2 (1) (c) and (d) made during the
            financial year, including adjustments at the
             uniform rate in respect of earlier financial          the distribution of the cost shall first be calculated by
            years,                                                 reference to each Member State's share of the payments
                                                                   referred to in Article (2) (1) (d), the United Kingdom
            and                                                    being excluded; it shall then be adjusted in such a way as
        — the percentage share of the United Kingdom               to restrict the share of the Federal Republic of Germany
            in total allocated expenditure;                        to two thirds of the share resulting from this calculation.
 ---pagebreak--- 16. 4. 88                              Official Journal of the European Communities                                 No C 102/11
2.    The correction shall be granted to the United                                             Article 9
Kingdom by a reduction in its VAT payments.
                                                                  The mechanism for the graduated refund of own
                                                                  resources accruing from value added tax or GNP-based
The costs borne by the other Member States shall be               financial contributions introduced for the Kingdom of
added to their VAT payments.                                      Spain and the Portuguese Republic up to 1991 by
                                                                  Articles 187 and 374 of the Act concerning the
                                                                  conditions of accession of the Kingdom of Spain and the
3.    The Commission shall perform the calculations               Portuguese Republic and the adjustments to the Treaties
required for the application of Article 4 and the present         shall apply to the own resources accruing from VAT and
Article.                                                          the GNP-based resource referred to in Article 2 (1) (c)
                                                                  and (d) of this Decision. It shall also apply to payments
                                                                  by these two Member States in accordance with Article 5
4.    If, at the beginning of the financial year, the budget      (2) of this Decision.
has not been adopted, the correction granted to the
United Kingdom and the costs borne by the other
Member States as entered in the last budget finally                                            Article 10
adopted shall remain applicable.
                                                                  The Commission shall submit by the end of 1991 a
                                                                  report on the operation of the system, including a re-
                          Article 6                               examination of the correction of budgetary imbalances
                                                                  granted to the United Kingdom, established by this
The revenue referred to in Article 2 shall be used                Decision.
without distinction to finance all expenditure entered in
the budget of the Communities without prejudice to
whatever provisions may be adopted in accordance with                                          Article 11
Article 8 (2) by reason of the entry of an EAGGF
monetary reserve in the budget.                                    1.    Member States shall be notified of this Decision by
                                                                  the Secretary-General of the Council of the European
                                                                  Communities; it shall be published in the Official Journal
This provision shall be without prejudice to the                   of the European Communities.
treatment of contributions by certain Member States to
supplementary programmes provided for in Article 130 L            Member States shall notify the Secretary-General of the
of the EEC Treaty.                                                Council of the European Communities without delay of
                                                                  the completion of the procedures for the adoption of this
                                                                  Decision in accordance with their respective constitu-
                          Article 7                               tional requirements.
Any surplus of the Communities' own resources over the
                                                                  This Decision shall enter into force on the first day of
 actual expenditure during a financial year shall be
                                                                  the month following receipt of the last of the notifi-
carried over to the following financial year.
                                                                   cations referred to in the second subparagraph. It shall
                                                                  take effect on 1 January 1988.
                          Article 8
                                                                   2. (a) Subject to points (b) and (c) above, the Decision
 1.   The Community own resources referred to in                           of 7 May 1985 shall be repealed on 1 January
Article 2 shall be established and collected by the                        1988. To the extent necessary, any references to
 Member States in accordance with national provisions                      the Decision of 21 April 1970 or to the Decision
 imposed by law, regulation of administration action,                      of 7 May 1985 shall be construed as references to
which shall, where necessary, be adapted to meet the                       this Decision
 requirements of Community rules. Member States shall
 make these resources available to the Commission.
                                                                       (b) Article 3 of the Decision of 7 May 1985 shall
                                                                           continue to apply to the calculation and
 2.    Without prejudice to the auditing of accounts                       adjustment of revenue accruing from the appli-
 provided for in Article 206a of the Treaty establishing                   cation of rates to the uncapped uniform
 the European Economic Community, or to the                                assessment basis for value added tax in 1987 and
 inspection arrangements made pursuant to Article 209 (c)                  earlier years.
 of that Treaty, the Council shall, acting unanimously on                  For 1988 the deduction in favour of the United
 a proposal from the Commission and after consulting the                   Kingdom in respect of previous financial years
 European Parliament, adopt the provisions necessary to                    shall be calculated in accordance with points (b)
 apply this Decision and to make possible the inspection                   (i), (ii) and (iii) of Article 3 (3) of the Decision of
 of the collection, making available to the Commission                     7 May 1985. The distribution of the cost of
 and payment of the revenue referred to in Article 2 and                   financing it shall be calculated in accordance with
 in Article 5.                                                             Article 5 (1) of this Decision. The amounts corre-
 ---pagebreak--- No C 102/12                        Official Journal of the European Communities                              16. 4. 88
     sponding to the deduction and the distribution of              payments of adjustments of corrections for earlier
     the cost of financing it shall be assigned to the              years.
     VAT payments in accordance with Article 5 (2) of
     this Decision. When Article 2 (6) has to be                (c) Article 4 (2) of the Decision of 7 May 1985 shall
     applied, the value added tax payments shall be                 continue to apply to the financial contributions
     replaced by financial contributions in the calcu-              needed to finance the completion of the
     lations referred to above for any Member State                 supplementary programme for the operation of
     concerned. This system shall also apply to the                 the HFR reactor of 1984 to 1987.