Explanatory Memorandum to COM(2000)583 - Amendment of Council Regulation (EC) No 2223/96 as concerns the use of ESA 95 in the determination of Member States' payments to the VAT-based own resource - Main contents
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dossier | COM(2000)583 - Amendment of Council Regulation (EC) No 2223/96 as concerns the use of ESA 95 in the determination of Member States' ... |
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source | COM(2000)583 ![]() |
date | 20-09-2000 |
The new ESA95 is a major improvement on the previous version, which dates from 1979. Progress has been achieved in the harmonisation of methodology and in the precision and accuracy of the concepts, definitions, classifications and accounting rules which have to be applied in order to arrive at a consistent reliable and comparable quantitative description of the economies of the Member States. Moreover applying the new ESA95 is made compulsory by the Regulation. In implementing the changeover to the new system, all Member States have also made additional improvements in the quality of the national accounts that stem from a thorough review of the sources and methods they use in practice to compile the accounts.
The ESA95 Regulation 2223/96 specifies in article 1 i that ESA shall apply to all Community acts that refer to the ESA or its definitions; except that Article 8 states that for budgetary and own resource purposes, and by way of derogation from article 1 i, the European system of accounts in force shall continue to be ESA79 while Decision 94/728/EC (own-resources decision) remains in force. At the time the ESA95 regulation was adopted, it was assumed the own resources decision would be amended in 1999. A new own resources decision is now expected to enter into force on 1 January 2002.
ESA national accounts data are used in several ways in the budget procedure: in particular to set budget ceilings, to calculate GNP for the fourth resource, and to determine Member States contributions to the VAT-based resource. Only the last of these is affected by this draft regulation.
Very detailed national accounts data are used in determining the VAT-based own resource in order to adjust for differences in tax base between countries' practices and the EU harmonised tax base. As Member States move over to ESA95, they actually do not have the detailed ESA79 data any more. Attempting to recalculate it would be a costly and hazardous exercise, which moreover serves no purpose since the experts agree that for this exercise of re-weighting the tax rates, the use of either ESA79 or ESA95 has no impact on the result. Instead it would be better to use the best data available, which is the ESA95 data. This view has been accepted by the Member States' representatives in the Advisory Committee on Own Resources.
Formally, to allow use of ESA95 data requires a small amendment to regulation 2223/96, which is the purpose of this present draft regulation. Some Member States have specifically requested that the legislation be tidied up on this point.