Own resources: the EU revenue
The rules on own resources make up one of the three interlinked parts of the EU budgetary system. The other two are:
The rules on the EU's own resources establish:
1. A ceiling
This is the maximum amount of own resources which the EU may raise during a year. The ceiling is expressed as a percentage of the EU's gross national income (GNI) and therefore depends on the economic situation in the EU.
2. The different types of own resources
• traditional own resources: mainly customs duties and sugar levies
• own resources based on value added tax: a uniform rate of 0.3% is levied on the harmonised VAT base of each member state; the taxable VAT base is, however, capped at 50% of gross national income (GNI) for each country
• own resources based on the gross national income (GNI): a standard percentage is levied on the GNI of each member state for the expenditure that is not covered by other own resources
The purpose of corrections is to offset or correct budgetary imbalances of some member states.
All forms of corrections, be they on the revenue or on the expenditure side, are based on two principles:
1. Expenditure policy is ultimately the essential means of resolving the question of budgetary imbalances.
2. Any member state sustaining a budgetary burden which is excessive excessive in relation to its relative prosperity may benefit from a correction at an appropriate time.
Other EU sources of revenue
Other sources of revenue exist, such as taxes on EU staff salaries, contributions from non-EU countries to certain programmes and fines on companies for breaching competition law.
Role of the Council
The Council adopts the legislative acts regulating the EU's own resources according to special legislative procedures which differ depending on each act.
Some acts have to be adopted unanimously by the Council after having consulted the European Parliament.
Some are adopted by the Council, deciding by qualified majority, after obtaining the consent of the European Parliament or after consulting the Parliament and the Court of Auditors.
The proposals for those legal acts are submitted by the European Commission. They can be amended before being adopted.
The European Council traditionally gives guidance to the Council of the EU for negotiations with the European Parliament on key elements of the own resources. These are usually negotiated in a package with the multiannual financial framework.