Explanatory Memorandum to COM(2011)739 - System of own resources of the EU - Main contents
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| dossier | COM(2011)739 - System of own resources of the EU. |
|---|---|
| source | COM(2011)739  |
| date | 09-11-2011 |
On 29 June 2011 the Commission proposed replacing the current system of financing for the EU budget with a new system making full use of the possibilities introduced by the Lisbon Treaty.
The proposals included three main elements complementing each other: the simplification of Member States' contributions, the introduction of new own resources and the reform of correction mechanisms.
It also announced that it would present the relevant detailed regulations or amendments to existing legal acts as well as the related regulations pursuant to Article 322 TFEU by the end of 2011.
Accordingly, this amended proposal for a Council Decision on the system of own resources of the European Union refines and completes the proposal made on 29 June.
It ensures coherence with the proposed Council Directive on a common system of financial transaction tax (hereinafter 'the FTT Directive') adopted on 28 September 2011, the proposals for Council Regulations on making the own resource based on the FTT available to the EU budget and on calculating and making available the own resource based on value added tax (VAT) as well as the amended proposal for a Council Regulation implementing the own resources Decision adopted together with this proposal.
2. Content of the revised proposal
The following sections present the main amendments and proposed additions in relation to the organization of the own resources system. The proposals only bear on aspects dealing with the two new own resources based, respectively, on the financial transaction tax and the value added tax. Other issues, such as corrections, are not affected by these proposals.
2.1. The legal instruments
The legal form of the financial transaction tax is defined in the FTT Directive. The Directive proposes all the practical elements necessary to create and implement the FTT. Logically, the function of the FTT as an own resource can only be envisaged together with the successful implementation of the FTT.
In order to ensure that receipts generated by the FTT can be used effectively to finance a part of the EU budget, rules need to be defined in the context of the own resources legislation. In practice, three legal acts enter into play: (i) the own resources Decision (ORD), which contains the main provisions on own resources such as the list of own resources and the timing for their implementation; (ii) the Regulation implementing the ORD, which notably contains rules on control and supervision for the collection of own resources; (iii) a Regulation on making the FTT-based own resource available to the EU budget. Whereas the first two legal acts have already been proposed by the Commission and merely need refinements to ensure full coherence with the FTT Directive, the proposal for a Council Regulation on making the FTT-based own resource available to the EU budget is a new piece of legislation.
In addition, the Commission also proposes a new legislation on the calculation and the making available of the new own resource based on VAT. This completes the provisions already included in the ORD and in the Regulation implementing it, which are slightly adjusted to ensure consistency with the proposals related to the FTT-based own resource.
2.2. Proposed changes in the ORD
The proposal made on 29 June 2011 includes the list of new own resources, together with the timing for their introduction and relevant limits to their application. It contains in particular a maximum limit to the rates applicable to the new own resources, whereas the proposed implementing regulation pursuant to Article 311 presents actual rates to be applied.
This amended proposal simplifies greatly the way the FTT-based own resource is determined by referring to the rates defined in the FTT Directive for the purpose of determining the FTT-based own resource. Possible adjustments to the rates would be made only in the FTT Directive. This ensures full coherence between the FTT Directive and the rules set out for the own resources system.
In line with the FTT Directive, it is now proposed to use the FTT as an own resource as of 1 January 2014. This means that from the start of its implementation the FTT will partly be used as an own resource.
Minor changes are also brought to provisions regarding the new VAT own resource, in order to ensure full consistency with the provisions set out in the amended proposal for a Regulation on the implementation of the the ORD and the new proposal on the making available of this resource. For consistency, the timing for the introduction of the new VAT resource is aligned to that of the FTT.
Last, changes are brought to provisions relating to the administration and collection of the own resource to ensure coherence with the other parts of the legislation.
2.3. Proposed changes in the regulation implementing the ORD
The regulation pursuant to Article 311 TFEU contains all those practical arrangements for the Union’s resources which should be governed by a more streamlined procedure in order to make the system sufficiently flexible within the framework and limits set out by the own resource Decision, with the exception of those aspects of the own resources system that relate to making own resources available and to meeting cash requirements.
Provisions of a general nature, applicable to all types of own resources and for which appropriate parliamentary oversight is particularly important have also been included in this regulation. This means in particular aspects of control and supervision of revenues.
Three main changes are included in the amended proposal.
Explicit reference to the various types of financial transactions to which the rates would be applied is redundant with provisions laid down in the FTT Directive and the amended proposal for the ORD. It is now proposed to specify the share of the minimum rates defined in the FTT Directive that should be used for the purpose of the FTT-based own resource. Consequently, this share of the receipts resulting from the application of the minimum rates defined in the FTT Directive will accrue to the EU budget and the rest will accrue to the Member States budgets.
The original proposal envisaged the possibility that the FTT would be collected by economic operators rather than by the Member States. In line with the FTT Directive, the Member States administrations will be responsible for collecting the FTT. Therefore, reference to economic operators is no longer necessary.
Last, regarding the new VAT own resource, the text now refers explictly to the calculation method (set out in the proposal on the making available of the new VAT resource) which determines the basis on which to apply the call rate of the resource.
2.4. Making the FTT-based and the VAT-based own resources available to the EU budget
As a complement to the own resources Decision and the regulation pursuant to Article 311 TFEU, a new proposal for a Council Regulation pursuant to Article 322 TFEU comprises the elements concerning the methods and procedures for making the FTT-based own resources available to the EU budget.
In addition, a new proposal for a Council Regulation includes the arrangements on calculating and making available to the EU budget the own resource based on value added tax (VAT).
These proposals include the rules on the establishment of the two own resources, treasury and accounting arrangements, entry in the accounts and corrections, reporting and conservation of supporting documents. Moreover, regarding specifically the new VAT resource, detailed provisions on the calculation method are included.
Both proposals draw heavily on experience accumulated in dealing with traditional own resources (customs duties) and with the current VAT-based own resource. They aim to provide simple and transparent rules with a maximum predictability for the Member States.