Explanatory Memorandum to COM(2018)326 - Methods and procedure for making available the Own Resources based on the CCCTB, ETS and non-recycled plastic packaging waste, and measures to meet cash requirements - Main contents
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| dossier | COM(2018)326 - Methods and procedure for making available the Own Resources based on the CCCTB, ETS and non-recycled plastic packaging ... |
|---|---|
| source | COM(2018)326  |
| date | 02-05-2018 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
The purpose of this proposal is to lay down, in accordance with Article 322(2) of the Treaty on the Functioning of the European Union, provisions necessary to determine the methods and procedure whereby Member States make the new own resources available to the Commission. These new Own Resources, referred to in Article 2(1)(c), (d) and (e) of the Commission proposal for a Council Decision on the system of Own Resources of the European Union 1 , are those based on the Common Consolidated Corporate Tax Base, on the European Union Emissions Trading System and on Plastic packaging waste that is not recycled. This Regulation complements Council Regulation (EU, Euratom) No 609/2014 2 , which will continue to apply to existing Own Resources.
The proposed new Own Resources Decision maintains and reforms the existing three Own Resources: Traditional Own Resources, a modified version of the Value Added Tax-based Own Resource and the Own Resource based on the Gross National Income.
In addition, the Own Resources Decision proposal introduces three new Own Resources, based on the Common Consolidated Corporate Tax Base, on the EU Emissions Trading System and on Plastic packaging waste that is not recycled.
The practical arrangements proposed in this Regulation implement the system set out in the proposed Own Resources Decision, and complement the current system for Own Resources by adapting it to the new Own Resources. In particular, the proposed Regulation deals with the calculation, establishment and making available of the new Own Resources, conservation of supporting documents, administrative cooperation, accounts to be kept for Own Resources, the timing for making them available and for making corrections and adjustments and, where necessary, provisions concerning cash requirements.
In addition, the proposal establishes the calculation of the applicable rate for the Own Resource based on Gross National Income, complementing Article 5 of Regulation (EU, Euratom) No 609/2014. The amount of Gross National Income should be calculated once the amounts of all the other Own Resources and of the financial contributions to supplementary research and technological development programmes and other revenue are known. This would ensure the residual character of the Gross National Income Own Resource, designed to top up the amounts of the EU budget that are not reached by the other Own Resources as well as by the other sources of income to the Union budget.
In terms of their handling in the budgetary cycle, Own Resources fall into two groups. Firstly, some revenue items are updated in line with actual developments at a later stage (compared to the amounts budgeted in the budget adopted at the beginning of the budget year), such as the Own Resources based on Value Added Tax and Gross National Income, which presently fall into this category. Secondly, some revenue items are not updated, such as customs duties. The new Own Resources proposed would also fall into one of these two groups and will not require a change in procedure. The Own Resources based on the Common Consolidated Corporate Tax Base and on the Plastic packaging waste contribution would be updated in the light of actually reported and verified figures once they become available. On the other hand, the Own Resource based on the auctioning revenue from the European Union Emissions Trading System would not entail any updates or adjustments at a later stage, similarly to customs duties. With the contribution based on Gross National Income remaining the ‘balancing item’, budgetary equilibrium will be maintained.
The Advisory Committee will be fully involved in the forecast exercise for all Own Resources.
The provisions in this Regulation normally mirror those in Regulation (EU, Euratom) No 609/2014, and references to it are made throughout the text.
In accordance with the fourth paragraph of Article 311 of the treaty on the Functioning of the European Union, the provisions on the making available of Own Resources are complemented by a regulation laying down implementing measures for the Union’s Own Resources system. These provisions, not directly related to making Own Resources available, are set out in the proposal for a Council Regulation laying down the implementing measures on the system of Own Resources 3 , which will repeal and replace current Regulation (EU, Euratom) No 608/2014 4 .
This initiative is part of the broader Own Resources legislative package that the Commission is proposing together with a Multiannual Financial Framework Regulation for 2021-2027 5 . It includes the Own Resources Decision referred to above, a new implementing measures’ Regulation for all Own Resources, current and new, and an amendment 6 to the Regulation for the Value Added Tax based Own Resources 7 . The initiative is not part of the Regulatory Fitness Programme.
The proposed Own Resources Decision includes new Own Resources and its Article 6(3) requires Member States to make the resources provided for in Article 2(1)(a), (b), (c), (d), (e) and (f) available to the Commission, in accordance with regulations adopted under Article 322(2) of the Treaty on the Functioning of the European Union. Regulation (EU, Euratom) No 609/2014 deals with the existing Own Resources referred to in Article 2(1)(a), (b) and (f), of the Decision, and the proposed Regulation deals with the newly created Own Resources referred to in Article 2(1)(c), (d) and (e) of the Decision.
In addition, for the purpose of setting the applicable rate for the residual Own Resource based on Gross National Income, a new Article is proposed, complementing Article 5 of Regulation (EU, Euratom) No 609/2014. Under the proposed Article, the revenue from the Own Resources based on the Common Consolidated Corporate Tax Base, the European Union Emissions Trading System and Plastic packaging waste is added to the revenue from Traditional Own Resources and the Own Resources based on Value Added Tax, in order to calculate the part of the budget to be covered by the Own Resource based on Gross National Income.
The Commission proposal is explained in more detail below in section 5.
• Consistency with existing policy provisions in the policy area
The legal basis for the Own Resources Decision is the third paragraph of Article 311 of the Treaty on the Functioning of the European Union. The fourth paragraph of Article 311 and Article 322(2) of the Treaty are the legal basis for the acts that will lay down the implementing measures for the system of Own Resources and for making those Own Resources available.
This Regulation’s legal basis is Article 322(2) of the Treaty on the Functioning of the European Union. It is furthered referred to in Article 6 of the new Own Resources Decision (Article 8 of Own Resources Decision No 2014/335/EU, Euratom 8 ). It complements the current Making Available Regulation (EU, Euratom) No 609/2014 for Traditional Own Resources and the Own Resources based on Value Added Tax and Gross National Income. Finally, it is connected to the Regulation laying down implementing measures for the system of Own Resources (the current Regulation (EU, Euratom) No 608/2014 and the proposed new implementing measures Regulation).
• Consistency with other Union policies
Contents
Given the nature of Own Resources, their management relies on the correct application of other Union policies:
–traditional Own Resources (mainly customs duties) are linked to the customs union;
–Own Resources based on Value Added Tax and on the Common Consolidated Corporate Tax Base are linked to Single Market and taxation policy;
–Own Resources based on the European Union Emissions Trading System and on Plastic packaging waste are linked to Union policies on the environment and climate action.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
This Regulation’s legal basis is Article 322(2) of the Treaty on the Functioning of the European Union. It is further referred to in Article 6 of the new Own Resources Decision (Article 8 of Own Resources Decision 2014/335/EU, Euratom).
• Subsidiarity (for non-exclusive competence)
By the nature of the Union budget and the Own Resources that make up its revenue, the system of Own Resources and arrangements for making them available need to take a Union-wide perspective and cannot be achieved by the Member States.
• Proportionality
This proposal for a new Regulation complements the existing provisions and adapts them to the new Own Resources. The inclusion of new Own Resources in the Own Resources Decision calls for updated legislation that includes provisions on making these new Own Resources available and that updates and improves the existing provisions.
Given that it is in the interests of the Union and its Member States to ensure that the system of Own Resources works well, the methods for making the Own Resources available are designed to allow smooth cooperation between the Union and the Member States.
• Choice of the instrument
Article 322(2) of the Treaty on the Functioning of the European Union does not specify the instrument to be used 9 . However, Article 8 of Decision 2014/335/EU, Euratom and Article 6 of the proposed Own Resources Decision require Member States to make the resources available to the Commission ‘in accordance with regulations’ adopted under Article 322(2) of the Treaty on the Functioning of the European Union.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
The explanatory memorandum for the Proposal for a Council Decision on the system of Own Resources of the European Union provides more information on the recent reports and documents analysing the need to reform the Own Resource system.
Therefore, a new Making Available Regulation is necessary since the current Regulation (EU, Euratom) No 609/2014 only refers to Traditional Own Resources and Own Resources based on Value Added Tax and Gross National Income, while the proposed Own Resources Decision introduces new Own Resources for which provisions on making them available are needed.
The proposal follows provisions already in force, since it adapts the system in place under Council Regulation (EU, Euratom) No 609/2014 to the new Own Resources. In addition, it complements and makes reference to the relevant legislation on the new Own Resources. Therefore, the proposal will be a continuation of the system in place, expanding it to the new Own Resources.
This proposal is not linked to the Regulatory Fitness Programme; it is targeted at Member States and not at microenterprises or small and medium-sized enterprises or other stakeholders; it is in principle neutral on sectoral Union competitiveness or international trade. The proposal has no consequences for the protection of fundamental rights.
4. BUDGETARY IMPLICATIONS
The budgetary implications of this proposal and of the Own Resources legislative package are detailed in a Legislative Financial Statement attached to this proposal. With the introduction of new Own Resources, the reformed Own Resources system can be implemented at the same level of administrative appropriations and staff resources as the present system.
5. OTHER ELEMENTS
The application of the Own Resources legislation, including the methods and procedure for making available Own Resources, is discussed on a regular basis in the Advisory Committee on Own Resources.
Chapter I ‘General Provision’
Article 2 of the proposal, ‘conservation of supporting documents’: provisions replicate those under Article 3 of Regulation (EU, Euratom) No 609/2014, differentiating between provisions for the Own Resource based on the European Union Emissions Trading System (which are similar to those applicable to Traditional Own Resources), and provisions for the Own Resources based on the Common Consolidated Corporate Tax Base and Plastic packaging waste (which are similar to those applicable to the Own Resources based on the Value Added Tax and Gross National Income).
Article 3 of the proposal, ‘administrative cooperation’ mirrors Article 4 of Regulation (EU, Euratom) No 609/2014.
Article 4 of the proposal, ‘effects on the Own Resource based on Gross National Income’, ensures the residual character of the Own Resource based on Gross National Income. It complements Article 5 of Regulation (EU, Euratom) No 609/2014 by stating that the amount of Own Resource based on Gross National Income will be calculated after the revenue stemming from all the other Own Resources, already existing and new, has been added. It also ensures that the gross reductions granted in the new Own Resources Decision are taken into account for the entry into the accounts and the making available of the Own Resource based on Gross National Income.
Chapter II ‘Accounts for Own Resources’
Article 5 of the proposal, ‘entry in the accounts and reporting’ mirrors Article 6 of Regulation (EU, Euratom) No 609/2014, adapting it to the needs of the new Own Resources.
Article 6 of the proposal, ‘accounting corrections for the Own Resources based on the European Union Emissions Trading System’, mirrors Article 7 of Regulation (EU, Euratom) No 609/2014, adapting this Own Resource to what is established there for Traditional Own Resources, since both Own Resources share a similar nature.
Chapter III ‘Calculation of Own Resources’
Articles 7, 8 and 9 cover the calculation methods of the Own Resources based on the Common Consolidated Corporate Tax Base, the European Union Emissions Trading System and Plastic packaging waste. It should be read in connection with Article 1 of the Commission proposal for a Council Regulation laying down implementing measures for the system of Own Resources of the European Union, which sets the applicable call rates.
Chapter IV ‘Making available Own Resources’
Article 10 of the proposal ‘treasury and accounting arrangements’ refers to Article 9 of Regulation (EU, Euratom) No 609/2014.
Articles 11 and 12 cover the making available of the new Own Resources. As explained, the Own Resource based on the European Union Emissions Trading System follows the provisions that are applicable to Traditional Own Resources (see Article 10 of Regulation (EU, Euratom) No 609/2014). The Own Resources based on the Common Consolidated Corporate Tax Base and Plastic packaging waste, however, follow the provisions applicable to the Own Resources based on Value Added Tax and Gross National Income (see Article 10a of Regulation (EU, Euratom) No 609/2014).
Article 13 of the proposal, ‘adjustments to the Own Resources based on the Common Consolidated Corporate Tax Base and on the Plastic packaging waste of previous financial years’ adapts the provisions of Article 10b of Regulation (EU, Euratom) No 609/2014, applicable to the Own Resources based on Value Added Tax and Gross National Income. Now, two new Own Resources will be included in the yearly balances exercise where the forecasts are compared with the first real data. In a second step, the total amount of balances is distributed among the Member States according to their GNI share (netting). It also states that the corrections or adjustments following inspections shall be made available at the date specified by the Commission. The amounts stemming from the results of inspections will not be included in the yearly balances exercise.
Article 14, ‘bringing forward twelfths’ mirrors Article 10a(2) of Regulation (EU, Euratom) No 609/2014 and is made applicable to the Own Resources based on the Common Consolidated Corporate Tax Base and Plastic packaging waste.
Article 15, ‘interest on amounts made available belatedly’ mirrors Article 12 of Regulation (EU, Euratom) No 609/2014. Interest will be due for any delay in making available the Own Resource based on the European Union Emissions Trading System, as it is the case with Traditional Own Resources. With regard to the Own Resources based on the Common Consolidated Corporate Tax Base and on Plastic packaging waste, as it is the case with those based on the Value Added Tax and Gross National Income, there is an exhaustive list of reasons for which interest should be payable.
Chapter V ‘Management of cash resources’
Article 16 ‘requirements on management of cash resources and execution of payment orders’ refers to Articles 14 and 15 of Regulation (EU, Euratom) No 609/2014.
Chapter VI ‘Final provisions’
Article 17 of the proposal, ‘Committee procedure’, provides for implementing powers to be conferred on the Commission in accordance with Regulation (EU) No 182/2011.
Article 18 of the proposal, ‘transitional provisions’, defines the provisions for the transitionary period.
Article 19 of the proposal, ‘entry into force’, states that the Regulation will enter into force at the same time as the Own Resources Decision. The Regulation will apply retroactively from 1 January 2021 for the Own Resources based on the European Union Emissions Trading System and on Plastic packaging waste. Concerning the Own Resource based on the Common Consolidated Corporate Tax Base, those provisions shall apply from the second year following the end of the transposition period for the Directive on the Common Consolidated Corporate Tax Base.