Own Ressources
The own resources system describes how and where the EU draws on national budgets to finance itself, that is, to be able to finance common policies, as well as the functioning of its own institutions.
Current Legislation
The own resources system
The current three main sources of revenue for the 2021-2027 EU budget are:
As of 1 January 2021, a new revenue source to the EU budget is a contribution based on the non-recycled plastic packaging waste.
The Council adopted a legislative package, composed by 3 acts (select the last consolidate version):
including a new own resources decision, introducing some changes to the own resources system for the period 2014-20. The new own resources rules apply, following the entry into force of this decision on 1 October 2016, retroactively as of 1 January 2014.
As said before, EU has 4 types of own resources (Council Decision (EU, Euratom) 2020/2053 of 14 December 2020):
Correction mechanisms
Correction mechanisms are designed to correct excessive contribution by certain Member States:
For the period 2021-2027, the following Member States shall benefit from a gross reduction in their annual GNI-based contributions under point (d) of paragraph 1 in the amount of EUR 565 million for Austria, EUR 377 million for Denmark, EUR 3 671 million for Germany, EUR 1 921 million for the Netherlands and EUR 1 069 million for Sweden. Those amounts shall be measured in 2020 prices and adjusted to current prices by applying the most recent gross domestic product deflator for the Union expressed in euro, as provided by the Commission, which is available when the draft budget is drawn up. Those gross reductions shall be financed by all Member States.
- customs duties
- contributions based on the Value Added Tax (VAT) collected by Member States
- direct contributions by EU countries, also known as Gross National Income (GNI)-based contributions.
As of 1 January 2021, a new revenue source to the EU budget is a contribution based on the non-recycled plastic packaging waste.
The Council adopted a legislative package, composed by 3 acts (select the last consolidate version):
- Council Regulation (EU, Euratom) No 609/2014
- Council Regulation (EU, Euratom) 2021/768
- Council Decision 2014/335/EU, Euratom
including a new own resources decision, introducing some changes to the own resources system for the period 2014-20. The new own resources rules apply, following the entry into force of this decision on 1 October 2016, retroactively as of 1 January 2014.
As said before, EU has 4 types of own resources (Council Decision (EU, Euratom) 2020/2053 of 14 December 2020):
- Traditional own resources: consist mainly of customs duties on imports from outside the EU and sugar levies. EU Member States keep 20 % of the amounts as collection costs (25% in 2011).
- Own resources based on value added tax (VAT): a uniform rate of 0.3 % is levied on the harmonised VAT base of each Member States.
- Own resources based on GNI: each Member State transfers a standard percentage of its GNI to the EU. Although designed simply to cover the balance of total expenditure not covered by the other own resources, this system has become the largest source of revenue of the EU budget.
- Own resources based on not-recycled plastic packaging waste, EUR 0.80/kg.
Correction mechanisms
Correction mechanisms are designed to correct excessive contribution by certain Member States:
For the period 2021-2027, the following Member States shall benefit from a gross reduction in their annual GNI-based contributions under point (d) of paragraph 1 in the amount of EUR 565 million for Austria, EUR 377 million for Denmark, EUR 3 671 million for Germany, EUR 1 921 million for the Netherlands and EUR 1 069 million for Sweden. Those amounts shall be measured in 2020 prices and adjusted to current prices by applying the most recent gross domestic product deflator for the Union expressed in euro, as provided by the Commission, which is available when the draft budget is drawn up. Those gross reductions shall be financed by all Member States.
Check the legislative texts on:
- EU's own resources
- European Union system of national and regional accounts
- Purchasing power parities
- Regulation (EU, Euratom) No 609/2014 on the methods and procedure for making available the traditional own resources based on value added tax and gross national income and on the measures to meet cash requirements
- Regulation (EU, Euratom) No 2021/770 on the calculation of the own resource based on non-recycled plastic packaging waste
EU Budget - How the own ressources system is implemented
The (EU, Euratom) 2021/768 implements the Council Decision, previously described, on the own resources.
It contains rules for:
It is complemented by Regulation (EU, Euratom) No 609/2014 (check the consolidated version) which sets out the methods and procedures for making own resources available to the European Commission and by the Council Decision 2015/335/EU.
The Commission presented a Proposal for a Council Regulation amending Regulation (EU, Euratom) 2021/768 of 30 April 2021 as regards implementing measures for new own resources of the European Union COM/2022/102 final.
It contains rules for:
- the calculation and budgeting of the balances*
- their control and supervision and
- reporting requirements for national authorities.
It is complemented by Regulation (EU, Euratom) No 609/2014 (check the consolidated version) which sets out the methods and procedures for making own resources available to the European Commission and by the Council Decision 2015/335/EU.
The Commission presented a Proposal for a Council Regulation amending Regulation (EU, Euratom) 2021/768 of 30 April 2021 as regards implementing measures for new own resources of the European Union COM/2022/102 final.
EU Countries' contribution to the EU Budget
With the Council Regulation (EU, Euratom) No 2021/768, the European Union has adopted rules on methods and procedures to be followed by EU countries in regard to their contributions to the EU’s budget, which are known as the EU’s own resources.
This Regulation:
This Regulation:
- lays down the rules setting the methods and procedures by which EU countries make available to the European Commission the EU’s own resources. Own resources constitute the vast majority of income that finances the EU’s budget and comprise:
- duties charged on imports from outside the EU and taxes on sugar production within the EU,
- revenue based on a share of the value-added tax (VAT) collected by EU countries,
- revenue based on each EU country’s gross national income* (GNI).
- defines the measures to meet, where appropriate, cash requirements (i.e. cash flow needs).
