EU Council: extra time given to member states to pay exceptionally high additional contributions to the EU budget

Brussels, 19-12-2014 — /EuropaWire/ — Member states that have to pay exceptionally high additional contributions to the EU budget as a result of the annual revision of their VAT and GNI data may request to defer their contributions until 1 September of the following year. That’s the main purpose of a regulation that the Council adopted on 18 December. The Council herewith seeks to prevent that the annual own resources adjustments create an unreasonably heavy financial burden on member states just before the year-end. Without this amendment member states would have had to pay their additional contributions by 1 December.

Member states that wish to defer their contributions have to make a request to the Commission and transmit a payment schedule. The Commission has to confirm that the conditions for postponing the payments are met.

The new regulation provides for the possibility to defer payments resulting from the annual adjustments to previous years’ own resources based on VAT and GNI
• for individual member states if their additional contribution to the EU budget exceeds two twelfths of their yearly contribution
• for all member states if the total additional contributions to the EU budget to be made by them altogether exceed half of one twelfth of their total yearly contributions (which corresponds to an amount of around € 5 billion in 2014)

This year the global threshold was met and therefore all member states were entitled to postpone their contributions. Bulgaria, France, Italy, Cyprus, Malta, Slovenia and the UK decided to benefit from this possibility and made a request to the Commission before the deadline of 1 December.

Other member states have credited to the Commission a net amount of € 4.1 billion by this date, which comes in addition to € 420 million from higher than expected traditional own resources. As part of the agreement reached on the EU budget the Council and the European Parliament adopted draft amending budget no 6/2014 which enters this total additional revenue of € 4.5 billion into the EU budget 2014. They also decided to diminish the GNI contributions of all member states by the same amount, split in accordance with their share in the GNI of the European Union.

Background
The current rules provide for an annual revision of member states’ VAT and GNI data of previous years. The main objective of this exercise is to ensure that the member states’ shares in the financing of the EU budget reflect their real economic performance.

This year’s revision of VAT and GNI balances resulted in an unprecedented amount of € 9.5 billion to be credited to the EU’s own resources account on 1 December. The Council on 7 November recognised that for several member states the obligation to make available very high amounts within such a short delay could cause severe fiscal strain. The Council therefore invited the Commission to propose an amendment to the own resources regulation to allow member states to defer their contributions over a period ending on 1 September 2015. The Commission made its proposal on 12 November. The Court of Auditors adopted its opinion on 27 November, and the European Parliament on 17 December.

Own resources constitute the vast majority of the EU’s revenue. There are three types of own resources:
• traditional own resources: mainly customs duties and sugar levies
• own resources based on the value added tax (VAT)
• own resources based on the gross national income (GNI) which finances all expenditure in the EU budget that is not covered by other revenue

Link to the Council regulation

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