BETA


2018/0133(NLE) Collection of own resources accruing from value added tax

Progress: Awaiting final decision

RoleCommitteeRapporteurShadows
Lead BUDG FERNANDES José Manuel (icon: EPP EPP), HAYER Valérie (icon: Renew Renew) GUALMINI Elisabetta (icon: S&D S&D), LAPORTE Hélène (icon: ID ID), CORMAND David (icon: Verts/ALE Verts/ALE), ZĪLE Roberts (icon: ECR ECR), OMARJEE Younous (icon: GUE/NGL GUE/NGL), PAPADIMOULIS Dimitrios (icon: GUE/NGL GUE/NGL)
Former Responsible Committee BUDG LEWANDOWSKI Janusz (icon: PPE PPE), DEPREZ Gérard (icon: ALDE ALDE)
Committee Opinion ECON
Former Committee Opinion ECON
Lead committee dossier:
Legal Basis:
TFEU 322-p2

Events

2021/04/27
   EC - Commission response to text adopted in plenary
Documents
2021/03/25
   EP - Results of vote in Parliament
2021/03/25
   EP - Decision by Parliament
Details

The European Parliament adopted by 517 votes to 169, with 4 abstentions, a legislative resolution on the draft Council regulation amending Regulation (EEC, Euratom) No 1553/89 on the definitive uniform arrangements for the collection of own resources accruing from value added tax.

The Regulation amending Regulation (EEC, Euratom) No 1553/89 on the definitive uniform arrangements for the collection of own resources accruing from value added tax is part of the own resources reform package proposed by the Commission in May 2018. The Commission proposed substantial simplifications to the calculation and implementation of VAT-based own resources.

The draft Council Regulation made numerous changes to the Commission's proposal. In particular, the provisions on the multi-annual 'freezing' of the weighted average VAT rate per Member State will simplify and streamline the calculation, implementation and control of the VAT-based own resource.

Parliament approved the Council's draft subject to amendments calling for the deletion of provisions that would create a rapid review procedure.

Documents
2021/03/24
   EP - Debate in Parliament
2021/03/17
   EP - Committee report tabled for plenary, 1st reading/single reading
Documents
2021/03/17
   EP - Vote in committee
2021/03/17
   EP - Committee report tabled for plenary, 1st reading/single reading
Documents
2021/03/03
   EP - Committee draft report
Documents
2020/12/08
   CofA - Court of Auditors: opinion, report
2020/11/11
   CSL - Supplementary legislative basic document
Documents
2020/04/30
   IT_CHAMBER - Contribution
Documents
2019/10/21
   EP - Committee referral announced in Parliament
2019/10/10
   EP - FERNANDES José Manuel (EPP) appointed as rapporteur in BUDG
2019/10/10
   EP - HAYER Valérie (Renew) appointed as rapporteur in BUDG
2018/10/24
   CZ_SENATE - Contribution
Documents
2018/10/09
   CofR - Committee of the Regions: opinion
Documents
2018/10/09
   CofA - Court of Auditors: opinion, report
Details

Opinion No 5/2018 of the Court of Auditors .

The financing system for the EU budget has not been significantly reformed since 1988. The Commission has proposed changing this financing system for the future budget under the 2021-2027 Multi-annual Financial Framework (MFF) by:

- reforming existing own resources, which will make up 87 % of EU revenue: keeping TOR but with lower rate of collection costs, maintaining the GNI-based own resource and simplifying the own resource based on VAT;

- introducing a ‘basket’ of three new own resources, which together will make up 12 % of EU revenue: one based on the Common Consolidated Corporate Tax Base (CCCTB), one based on the European Union (EU) Emissions Trading System (ETS) and one based on plastic packaging waste that is not recycled;

- phasing out the corrections that exist in the current system;

- increasing the ceilings for own resources to overcome the impact of Brexit and the integration of European Development Fund (EDF) into the EU budget, as well as to cover financial liabilities linked to loans or financial facilities guaranteed from the EU budget.

Assessment

The proposed new EU financing system took on board a number of the key principles of the reform, but not all and the financing system remains complex. It is of the opinion that a single regulation with a comprehensive set of own resources provisions would simplify the system and make it more transparent.

The Court of Auditors considers that the proposed simplified VAT-based own resource includes assumptions on standard-rated transactions that do not adhere to some of the calculation steps described by the Commission.

The proposed simplification is based on three steps:

- Step 1: focusing on supplies which are subject to the VAT standard rate;

- Step 2: streamlining the procedure for calculating VAT bases by using simplified assumptions based on the standard-rated receipts;

- Step 3: applying a uniform call rate on the standard-rated bases to obtain the own resource.

The examination of the proposed methodology reveals that the assumptions used by the Commission to calculate the simplified VAT contributions do not adhere to the above steps (1) and (2).

The Court criticised the VAT-based own resource for the complexity of its calculation and its lack of direct link to the tax base. The Commission’s new proposal for the VAT-based own resource simplifies the calculation, but still does not provide any direct link to the tax base. Such a link could, however, be obtained by applying a call rate directly to the VAT receipts.

Recommendations

The Commission should reconsider its proposal for the simplified VAT-based own resource. Should it decide to keep this source of revenue, it could:

- either clarify that the simplifications proposed do not lead to the calculation of the VAT contributions based on the standard-rated taxable bases,

- or introduce a new source of revenue based only on VAT receipts.

2018/07/03
   PT_PARLIAMENT - Contribution
Documents
2018/06/26
   CZ_CHAMBER - Contribution
Documents
2018/05/31
   EP - Committee referral announced in Parliament
2018/05/16
   EP - LEWANDOWSKI Janusz (PPE) appointed as rapporteur in BUDG
2018/05/16
   EP - DEPREZ Gérard (ALDE) appointed as rapporteur in BUDG
2018/05/02
   EC - Legislative proposal published
Details

PURPOSE: to simplify the arrangements for the collection of own resources accruing from value added tax.

PROPOSED ACT: Council Regulation.

ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts the act after consulting the European Parliament but without being obliged to follow its opinion.

BACKGROUND: this proposal constitutes an integral part of the reform of the own resources system as set out in the proposal for a Council Decision on the system of own resources of the European Union.

The proposal draws on past experiences in administering own resources and aims to simplify the calculation of the own resource based on value added tax. It also streamlines the practical arrangements.

CONTENT: the aim of the proposal is to simplify considerably the own resources aspects of value added tax by amending Regulation (EEC, Euratom) No 1553/89 . It now focuses on standard-rated supplies (so the weighted average rate will not be needed), while the number of corrections are reduced to an absolute minimum and the financial compensations have been removed.

For the sake of simplicity and transparency, and in order to reduce administrative burden, the standard rated value added tax own resource should be calculated on the basis of a common Union share of standard rated transactions. That share should represent the average of the lowest shares of standard rated supplies to final consumption in Member States over a period of five years that has been calculated using national accounts and fiscal data approved by the Advisory Committee on Own Resources.

The arrangements for calculating the standard rated value added tax own resource base should be determined in a uniform manner starting from actually collected receipts for every given calendar year as the sole definitive method for determining the standard rated value added tax own resource base.

Documents

Votes

Perception des ressources propres provenant de la taxe sur la valeur ajoutée - Collection of own resources accruing from value added tax - Erhebung der Mehrwertsteuereigenmittel - A9-0049/2021 - José Manuel Fernandes, Valérie Hayer - Am 1

2021/03/24 Outcome: +: 517, -: 169, 0: 4
DE ES FR RO PT SE EL BG AT IE FI DK BE HR SI SK LT NL MT CY LU EE LV IT CZ PL HU
Total
88
59
78
33
21
20
21
17
18
13
14
14
21
12
8
14
11
29
6
6
5
7
8
73
21
52
21
icon: PPE PPE
171

Denmark PPE

For (1)

1

Malta PPE

2
2

Luxembourg PPE

2

Estonia PPE

For (1)

1

Latvia PPE

2

Hungary PPE

1
icon: S&D S&D
142

Greece S&D

2

Slovenia S&D

2

Slovakia S&D

Against (1)

3

Lithuania S&D

2

Cyprus S&D

2

Luxembourg S&D

For (1)

1

Estonia S&D

2

Latvia S&D

2

Czechia S&D

For (1)

1
icon: Renew Renew
97
3

Austria Renew

For (1)

1

Ireland Renew

2

Finland Renew

3

Croatia Renew

For (1)

1

Slovenia Renew

2

Slovakia Renew

2

Lithuania Renew

1

Luxembourg Renew

2

Estonia Renew

3

Latvia Renew

For (1)

1

Italy Renew

2

Hungary Renew

2
icon: Verts/ALE Verts/ALE
68

Spain Verts/ALE

3

Portugal Verts/ALE

1

Sweden Verts/ALE

3

Austria Verts/ALE

3

Ireland Verts/ALE

2

Finland Verts/ALE

3

Denmark Verts/ALE

2

Belgium Verts/ALE

3

Lithuania Verts/ALE

2

Netherlands Verts/ALE

3

Latvia Verts/ALE

1

Czechia Verts/ALE

3

Poland Verts/ALE

For (1)

1
icon: The Left The Left
39

Portugal The Left

4

Sweden The Left

For (1)

1

Ireland The Left

Against (1)

4

Finland The Left

For (1)

1

Denmark The Left

Against (1)

1

Belgium The Left

For (1)

1

Netherlands The Left

Against (1)

1

Cyprus The Left

2

Czechia The Left

Abstain (1)

1
icon: NI NI
38

Germany NI

2

Croatia NI

Against (1)

2

Slovakia NI

Against (1)

2

Lithuania NI

Against (1)

1

Netherlands NI

Against (1)

1
icon: ECR ECR
62

Romania ECR

Against (1)

1
3

Greece ECR

Against (1)

1

Bulgaria ECR

2

Croatia ECR

Against (1)

1

Slovakia ECR

Abstain (1)

2

Lithuania ECR

Against (1)

1

Netherlands ECR

Abstain (1)

4

Latvia ECR

2
icon: ID ID
73

Austria ID

3

Finland ID

2

Denmark ID

Against (1)

1

Netherlands ID

Against (1)

1

Estonia ID

Against (1)

1

Czechia ID

Against (1)

Abstain (1)

2

History

(these mark the time of scraping, not the official date of the change)

events/5/docs
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docs/4/docs/0/url
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New
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  • Regulation
  • Amending Regulation (EEC, Euratom) No 1553/89
New
Regulation
docs/6
date
2021-03-25T00:00:00
docs
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  • The European Parliament adopted by 517 votes to 169, with 4 abstentions, a legislative resolution on the draft Council regulation amending Regulation (EEC, Euratom) No 1553/89 on the definitive uniform arrangements for the collection of own resources accruing from value added tax.
  • The Regulation amending Regulation (EEC, Euratom) No 1553/89 on the definitive uniform arrangements for the collection of own resources accruing from value added tax is part of the own resources reform package proposed by the Commission in May 2018. The Commission proposed substantial simplifications to the calculation and implementation of VAT-based own resources.
  • The draft Council Regulation made numerous changes to the Commission's proposal. In particular, the provisions on the multi-annual 'freezing' of the weighted average VAT rate per Member State will simplify and streamline the calculation, implementation and control of the VAT-based own resource.
  • Parliament approved the Council's draft subject to amendments calling for the deletion of provisions that would create a rapid review procedure.
docs/6
date
2021-03-25T00:00:00
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        • date: 2018-10-09T00:00:00 docs: url: https://dm.cor.europa.eu/CORDocumentSearch/Pages/redresults.aspx?k=(documenttype:AC)(documentnumber:2389)(documentyear:2018)(documentlanguage:EN) title: CDR2389/2018 type: Committee of the Regions: opinion body: CofR
        • date: 2018-10-09T00:00:00 docs: url: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:C:2018:431:TOC title: OJ C 431 29.11.2018, p. 0001 title: N8-0011/2019 summary: Opinion No 5/2018 of the Court of Auditors . The financing system for the EU budget has not been significantly reformed since 1988. The Commission has proposed changing this financing system for the future budget under the 2021-2027 Multi-annual Financial Framework (MFF) by: - reforming existing own resources, which will make up 87 % of EU revenue: keeping TOR but with lower rate of collection costs, maintaining the GNI-based own resource and simplifying the own resource based on VAT; - introducing a ‘basket’ of three new own resources, which together will make up 12 % of EU revenue: one based on the Common Consolidated Corporate Tax Base (CCCTB), one based on the European Union (EU) Emissions Trading System (ETS) and one based on plastic packaging waste that is not recycled; - phasing out the corrections that exist in the current system; - increasing the ceilings for own resources to overcome the impact of Brexit and the integration of European Development Fund (EDF) into the EU budget, as well as to cover financial liabilities linked to loans or financial facilities guaranteed from the EU budget. Assessment The proposed new EU financing system took on board a number of the key principles of the reform, but not all and the financing system remains complex. It is of the opinion that a single regulation with a comprehensive set of own resources provisions would simplify the system and make it more transparent. The Court of Auditors considers that the proposed simplified VAT-based own resource includes assumptions on standard-rated transactions that do not adhere to some of the calculation steps described by the Commission. The proposed simplification is based on three steps: - Step 1: focusing on supplies which are subject to the VAT standard rate; - Step 2: streamlining the procedure for calculating VAT bases by using simplified assumptions based on the standard-rated receipts; - Step 3: applying a uniform call rate on the standard-rated bases to obtain the own resource. The examination of the proposed methodology reveals that the assumptions used by the Commission to calculate the simplified VAT contributions do not adhere to the above steps (1) and (2). The Court criticised the VAT-based own resource for the complexity of its calculation and its lack of direct link to the tax base. The Commission’s new proposal for the VAT-based own resource simplifies the calculation, but still does not provide any direct link to the tax base. Such a link could, however, be obtained by applying a call rate directly to the VAT receipts. Recommendations The Commission should reconsider its proposal for the simplified VAT-based own resource. Should it decide to keep this source of revenue, it could: - either clarify that the simplifications proposed do not lead to the calculation of the VAT contributions based on the standard-rated taxable bases, - or introduce a new source of revenue based only on VAT receipts. type: Court of Auditors: opinion, report body: CofA
        • date: 2018-06-26T00:00:00 docs: url: http://www.connefof.europarl.europa.eu/connefof/app/exp/COM(2018)0328 title: COM(2018)0328 type: Contribution body: CZ_CHAMBER
        • date: 2018-10-24T00:00:00 docs: url: http://www.connefof.europarl.europa.eu/connefof/app/exp/COM(2018)0328 title: COM(2018)0328 type: Contribution body: CZ_SENATE
        • date: 2018-07-03T00:00:00 docs: url: http://www.connefof.europarl.europa.eu/connefof/app/exp/COM(2018)0328 title: COM(2018)0328 type: Contribution body: PT_PARLIAMENT
        events
        • date: 2018-05-02T00:00:00 type: Legislative proposal published body: EC docs: url: http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/com/2018/0328/COM_COM(2018)0328_EN.pdf title: COM(2018)0328 url: https://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!DocNumber&lg=EN&type_doc=COMfinal&an_doc=2018&nu_doc=0328 title: EUR-Lex summary: PURPOSE: to simplify the arrangements for the collection of own resources accruing from value added tax. PROPOSED ACT: Council Regulation. ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts the act after consulting the European Parliament but without being obliged to follow its opinion. BACKGROUND: this proposal constitutes an integral part of the reform of the own resources system as set out in the proposal for a Council Decision on the system of own resources of the European Union. The proposal draws on past experiences in administering own resources and aims to simplify the calculation of the own resource based on value added tax. It also streamlines the practical arrangements. CONTENT: the aim of the proposal is to simplify considerably the own resources aspects of value added tax by amending Regulation (EEC, Euratom) No 1553/89 . It now focuses on standard-rated supplies (so the weighted average rate will not be needed), while the number of corrections are reduced to an absolute minimum and the financial compensations have been removed. For the sake of simplicity and transparency, and in order to reduce administrative burden, the standard rated value added tax own resource should be calculated on the basis of a common Union share of standard rated transactions. That share should represent the average of the lowest shares of standard rated supplies to final consumption in Member States over a period of five years that has been calculated using national accounts and fiscal data approved by the Advisory Committee on Own Resources. The arrangements for calculating the standard rated value added tax own resource base should be determined in a uniform manner starting from actually collected receipts for every given calendar year as the sole definitive method for determining the standard rated value added tax own resource base.
        • date: 2018-05-31T00:00:00 type: Committee referral announced in Parliament, 1st reading/single reading body: EP
        links
        other
        • body: EC dg: url: http://ec.europa.eu/info/departments/secretariat-general_en title: Secretariat-General commissioner: OETTINGER Günther
        procedure/dossier_of_the_committee
        Old
        BUDG/8/13042
        New
        • BUDG/9/00285
        procedure/instrument
        • Regulation
        • Amending Regulation (EEC, Euratom) No 1553/89
        procedure/subject
        Old
        • 2.70.02 Indirect taxation, VAT, excise duties
        • 8.70.01 Financing of the budget, own resources
        New
        2.70.02
        Indirect taxation, VAT, excise duties
        8.70.01
        Financing of the budget, own resources
        procedure/summary
        • Amending Regulation (EEC, Euratom) No 1553/89
        activities/0/commission/0
        DG
        Commissioner
        OETTINGER Günther
        activities/0/docs/0/text
        • PURPOSE: to simplify the arrangements for the collection of own resources accruing from value added tax.

          PROPOSED ACT: Council Regulation.

          ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts the act after consulting the European Parliament but without being obliged to follow its opinion.

          BACKGROUND: this proposal constitutes an integral part of the reform of the own resources system as set out in the proposal for a Council Decision on the system of own resources of the European Union.

          The proposal draws on past experiences in administering own resources and aims to simplify the calculation of the own resource based on value added tax. It also streamlines the practical arrangements.

          CONTENT: the aim of the proposal is to simplify considerably the own resources aspects of value added tax by amending Regulation (EEC, Euratom) No 1553/89. It now focuses on standard-rated supplies (so the weighted average rate will not be needed), while the number of corrections are reduced to an absolute minimum and the financial compensations have been removed.

          For the sake of simplicity and transparency, and in order to reduce administrative burden, the standard rated value added tax own resource should be calculated on the basis of a common Union share of standard rated transactions. That share should represent the average of the lowest shares of standard rated supplies to final consumption in Member States over a period of five years that has been calculated using national accounts and fiscal data approved by the Advisory Committee on Own Resources.

          The arrangements for calculating the standard rated value added tax own resource base should be determined in a uniform manner starting from actually collected receipts for every given calendar year as the sole definitive method for determining the standard rated value added tax own resource base.

        activities/1
        date
        2018-05-31T00:00:00
        body
        EP
        type
        Committee referral announced in Parliament, 1st reading/single reading
        committees
        committees/0/date
        • 2018-05-16T00:00:00
        • 2018-05-16T00:00:00
        committees/0/rapporteur
        • group: EPP name: LEWANDOWSKI Janusz
        • group: ALDE name: DEPREZ Gérard
        other/0
        body
        EC
        dg
        commissioner
        OETTINGER Günther
        procedure/dossier_of_the_committee
        BUDG/8/13042
        procedure/stage_reached
        Old
        Preparatory phase in Parliament
        New
        Awaiting committee decision
        activities
        • date: 2018-05-02T00:00:00 docs: url: http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/com/2018/0328/COM_COM(2018)0328_EN.pdf celexid: CELEX:52018PC0328:EN type: Legislative proposal published title: COM(2018)0328 type: Legislative proposal published body: EC commission:
        committees
        • body: EP responsible: True committee_full: Budgets committee: BUDG
        • body: EP responsible: False committee_full: Economic and Monetary Affairs committee: ECON
        links
        other
          procedure
          reference
          2018/0133(NLE)
          title
          Collection of own resources accruing from value added tax
          legal_basis
          Treaty on the Functioning of the EU TFEU 322-p2
          stage_reached
          Preparatory phase in Parliament
          summary
          Amending Regulation (EEC, Euratom) No 1553/89
          subtype
          Consultation of Parliament
          type
          NLE - Non-legislative enactments
          subject