Explanatory Memorandum to COM(2018)322 - Implementing measures for the system of Own Resources of the EU - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2018)322 - Implementing measures for the system of Own Resources of the EU. |
|---|---|
| source | COM(2018)322  |
| date | 03-05-2018 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
The purpose of this proposal is to lay down implementing measures as provided in Article 7 of the Commission proposal for a Council Decision on the system of Own Resources of the European Union 1 pursuant to the fourth paragraph of Article 311 of the Treaty on the Functioning of the European Union. It is to repeal and replace Council Regulation (EU, Euratom) No 608/2014 2 .
The proposed new Own Resources Decision will maintain and reform the existing three Own Resources: Traditional Own Resources, a modified version of the Value Added Tax-based Own Resource and the Own Resource based on the Gross National Income.
In addition, the Own Resources Decision proposal introduces three new Own Resources, based on the Common Consolidated Corporate Tax Base, on the European Union Emissions Trading System, and on Plastic packaging waste that is not recycled.
This proposal for a regulation covers all the practical arrangements for the Union’s Own Resources. In the same spirit as Regulation (EU, Euratom) No 608/2014, the proposed Regulation sets out a streamlined procedure in order to make the system flexible within the framework and limits set out by the Own Resources Decision.
The proposal includes provisions of a general nature that are applicable to all types of Own Resources, and for which appropriate parliamentary oversight is particularly important. They mainly cover matters of control and supervision of revenues, including relevant reporting requirements and the related powers of Commission inspectors.
These implementing measures are complemented, in accordance with Article 322(2) of the Treaty on the Functioning of the European Union, by regulations determining the methods and procedure by which Own Resources revenue is be made available or paid to the Commission, including measures to meet cash requirements where necessary.
This initiative is part of the broader Own Resources legislative package that the Commission is proposing together with a Multiannual Financial Framework Regulation for 2021-2027 3 . It includes the Own Resources Decision referred to above, a specific Making Available Regulation for the new Own Resources 4 and an amendment 5 to the Regulation on the Value Added Tax Own Resources 6 . The initiative is not part of the Regulatory Fitness Programme.
The current Regulation (EU, Euratom) No 608/2014 lays down implementing measures for the system of Own Resources of the European Union, pursuant to Article 9 Decision No 2014/335/EU, Euratom 7 . The proposed Own Resources Decision includes new Own Resources and Article 7 requires implementing measures to be provided for:
(a)the detailed rules for calculating and establishing the amounts of the Own Resources;
(b)the provision and arrangements necessary for controlling and supervising the revenue stemming from the Own Resources;
(c)the reference Gross National Income, the provisions to adjust the Gross National Income and the provisions to recalculate the ceilings for payments and commitments in case of significant changes to the Gross National Income;
(d)the procedure for calculating and budgeting the annual budgetary balance.
Contents
In view of the above, the elements proposed by the Commission relate to implementing measures for:
–all the Own Resources established under Article 2 of the Own Resources Decision, as it is the case now with the current implementing Regulation (EU, Euratom) No 608/2014, including their:
call rates,
control and supervision;
reporting requirements;
powers and obligations of Commission inspectors as well as the preparation and management of inspections;
Committee procedure;
–the calculation and budgeting of the surplus;
–the definition of reference Gross National Income and provisions to address significant changes to the European system of regional and national accounts, taken over from the current Own Resources Decision No 2014/335/EU, Euratom,
The Commission proposal is explained in more in Section 5.
• Consistency with existing policy provisions in the policy area
The legal basis for the Own Resources Decision is the third paragraph of Article 311 of the Treaty on the Functioning of the European Union. The fourth paragraph of Article 311 and Article 322(2) of the Treaty are the legal basis for the acts that will lay down the implementing measures for the system of Own Resources and for the making those Own Resources available.
This Regulation’s legal basis is the fourth paragraph of Article 311 of the Treaty. It is further referred to in Article 7 of the new Own Resources Decision (Article 9 of the 2014 Own Resources Decision). Finally, it is connected to the Making Available Regulations, specifically: (i) the current Regulation (EU, Euratom) No 609/2014 for Traditional Own Resources and the Own Resources based on Value Added Tax and Gross National Income; and (ii) the proposed complementary Making Available Regulation for the new Own Resources based on the Common Consolidated Corporate Tax Base, the European Union Emissions Trading System, and Plastic packaging waste.
• Consistency with other Union policies
Given the nature of Own Resources, their management relies on the correct application of other Union policies:
–Traditional Own Resources (mainly customs duties), are linked to the customs union;
–Own Resources based on Value Added Tax and on the Common Consolidated Corporate Tax Base are linked to Single Market and taxation policy;
–Own Resources based on the European Union Emissions Trading System and on Plastic packaging waste are linked to policies on the environment and climate action.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
This Regulation’s legal basis is the fourth paragraph of Article 311 of the Treaty on the Functioning of the European Union. It is further referred to in Article 7 of the new Own Resources Decision (Article 9 of the 2014 Own Resources Decision)..
• Subsidiarity (for non-exclusive competence)
By the nature of the Union budget and the Own Resources that make up its revenue, implementing measures for the system of Own Resources need to take a Union-wide perspective and cannot be achieved by the Member States.
• Proportionality
This proposal for a new Regulation takes over most of the current implementing measures in force. The inclusion of new Own Resources in the Own Resources Decision calls for updated legislation that includes implementing measures for these new Own Resources and that improves the existing measures.
The implementing measures included in this proposal follow the current system and also follow the Commission proposal of 2011 (COM(2011) 740) while adapting it to the new landscape of multiple and new Own Resources. It is in the interests of the Union and its Member States to ensure that the system of Own Resources works well, so the control and inspection measures are designed to allow smooth cooperation between the Union bodies and the Member States.
In addition, provisions for which appropriate parliamentary oversight is particularly important have been included in this proposal.
• Choice of the instrument
The fourth paragraph of Article 311 of the Treaty on the Functioning of the European Union specifically states ‘The Council, acting by means of regulations (…) shall lay down implementing measures for the Union’s Own Resources system’.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
The explanatory memorandum for the proposal for a new Own Resources Decision provides more information on recent reports and documents analysing the need to reform the Own Resources system.
Following on from that, a new Regulation laying down implementing measures for the system of Own Resources is necessary since the current Regulation (EU, Euratom) No 608/2014 only refers to Traditional Own Resources and Own Resources based on Value Added Tax and Gross National Income, while the proposed Own Resources Decision introduces new Own Resources for which control and inspection measures are needed.
The implementing measures follow provisions already in force, since the proposal extends the system already in place in Council Regulation (EU, Euratom) No 608/2014 to the new Own Resources. In addition, it complements and makes reference to the relevant legislation on the new Own Resources. Therefore, the implementing measures proposed will be a continuation of the system in place, expanding it to the new Own Resources.
This proposal is not linked to the Regulatory Fitness Programme; it is targeted at Member States and not at microenterprises or small and medium-sized enterprises or other stakeholders; it is in principle neutral on sectoral Union competitiveness or international trade. The proposal has no consequences for the protection of fundamental rights.
4. BUDGETARY IMPLICATIONS
The budgetary implications of this proposal and of the Own Resources legislative package are included in a Legislative Financial Statement attached to the proposal for the Making Available Regulation for the new own resources. The reformed Own Resources system can be implemented at the same level of administrative appropriations and staff resources as the present system.
5. OTHER ELEMENTS
The application of the Own Resources legislation, including the implementing measures Regulation, is discussed on a regular basis in the Advisory Committee on Own Resources.
Chapter I Determining Own Resources
–Article 1 of the proposal, Applicable call rates: the Article provides for the uniform call rates to be applied to the categories of Own Resources set out in Article 2(1)(b), (c), (d) and (e) (i.e., the Own Resources based on Value Added Tax, Common Consolidated Corporate Tax Base, the European Union Emissions Trading System and Plastic packaging waste) of the Commission proposal for the new Own Resources Decision.
–Article 2 of the proposal, Reference Gross National Income and significant changes thereto: provisions under Articles 2(7) and 3 i of Own Resources Decision No 2014/335/EU, Euratom are taken over and updated.
–Article 3 of the proposal, Calculation and budgeting of the balance: provisions under Article 1 of Regulation (EU, Euratom) No 608/2014 are taken over and updated.
Chapter II Provisions concerning control and supervision and relevant reporting requirements
–Article 4 of the proposal Control and supervision measures: provisions under Article 2 of Regulation (EU, Euratom) No 608/2014 are taken over and updated in relation to the new Own Resources set up in Article 2(1)(c), (d) and (e) of the proposed Own Resources Decision. In addition, specific inspection provisions for the Own Resource based on Value Added Tax have been taken over from Article 11(1) of Council Regulation (EEC, Euratom) 1553/89. Simplification has been sought, aiming as much as possible at a system that is applicable to all Own Resources.
–Article 5 of the proposal Powers and obligations of the authorised agents of the Commission: provisions are taken over and updated from Article 3 of Regulation (EU, Euratom) No 608/2014. Simplification has been sought, aiming at a system that is applicable to all Own Resources.
–Articles 6 of the proposal Preparation and management of inspections: provisions are taken over and updated from Article 4 of Regulation (EU, Euratom) No 608/2014. Simplification has been sought, aiming as much as possible at a system that is applicable to all Own Resources.
–Article 7 of the proposal, Reporting fraud and irregularities affecting entitlements to Traditional Own Resources: provisions under Article 5 of Regulation (EU, Euratom) No 608/2014 are maintained, unchanged, since these provisions are only relevant for Traditional Own Resources.
–Article 8 of the proposal, Reporting by Member States of their inspections of Traditional Own Resources: provisions under Article 6 of Regulation (EU, Euratom) No 608/2014 are maintained, unchanged, since these provisions are only relevant for Traditional Own Resources.
Chapter III Committee and final provisions
–Article 9 of the proposal, Committee procedure: provides for implementing powers to be conferred on the Commission in accordance with Regulation (EU) No 182/2011.
–Article 10 of the proposal, ‘Final provisions’: repeals Regulation (EU, Euratom) No 608/2014.
–Article 11 of the proposal, ‘Entry into force’: states that the Regulation should enter into force at the same time as the Own Resources Decision. This Regulation will apply retroactively from 1 January 2021 for the own resources based on the European Union Emissions Trading System and on Plastic packaging waste. Concerning the own resource based on the Common Consolidated Corporate Tax Base, those provisions will apply from the second year following the end of the transposition period for the Directive on the Common Consolidated Corporate Tax Base.