Proposal for a Council Decision on the system of Own Resources of the European Union

Author (Corporate)
Series Title
Series Details (2018) 325 final (02.05.18)
Publication Date 02/05/2018
Content Type

The European Commission on 2 May 2018 proposed a pragmatic, modern, long-term budget for the 2021-2027 period. The package of proposals was set out in the Communication 'A modern budget for a Union that protects, empowers and defends. The Multiannual Financial Framework 2021-2027'.

Further information:

The proposal on the next Multiannual Financial Framework period offers the opportunity to modernise the EU's financial framework. Today, the Union is facing the need to fund new Union priorities and European public goods. At the same time, economic changes and globalisation are posing new challenges for national tax systems, and there are new policies which can be strengthened by providing financial incentives for them at EU level. Moreover, many have called for a reform of the revenue side of the budget in order to increase its clarity, fairness and transparency.

The array of new political priorities with budgetary consequences and the United Kingdom's withdrawal from the EU call for particular attention to the architecture of the Own Resources system. In addition, digitalisation, globalisation and other economic developments are posing challenging for national statistical authorities. In the general context of taxation, market integration, free movement of capital and the rise of intangibles have led to questions about the adequacy of national taxation frameworks to properly address the developments in these fields. Finally, climate change and environmental pollution generate negative externalities which require a response at EU level, if not at global level.

Beyond the basic requirement of providing sufficient revenue to cover spending, the Own Resources system should be reformed to help address these new challenges and designed in a way that yields more benefits than just a regular stream of fiscal income. The present proposal will simplify key elements of the existing EU financing system and make it more transparent.

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Related Link(s)
European Commission: Press Release, 02.05.18: EU budget: Commission proposes a modern budget for a Union that protects, empowers and defends
EUR-Lex: SWD(2018)172: Financing the EU budget: report on the operation of the own resources system
EPRS: Briefing: EU Legislation in Progress, November 2018: Own resources of the European Union: Reforming the EU's financing system (COM (2018)325-328)

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