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Decision on the system of own resources

The operation of the European Union (EU) is based on a balanced budget ensuring that the Union has adequate resources to finance its policies, while maintaining strict budgetary discipline. The Own Resources Decision lays down the basic provisions for financing the EU budget. It was adopted unanimously within the Council and after ratification in all Member States.


Council Decision 2007/436/EC, Euratom of 7 June 2007 on the system of the European Communities' own resources.


The budget of the EU is financed wholly from own resources in order to ensure the orderly development of the Union's policies. There are three categories of own resources: "traditional own resources", the own resource based on value added tax (VAT) and the own resource based on gross national income (GNI). Other revenue sources include taxes paid by officials, fines imposed on firms by the Community and interest on late payments.

Own resources ceiling

The own resources ceiling is maintained at 1.24% of the sum of all the EU Member States' GNIs. The ceiling on annual appropriations for payments is set at 1.31% of that figure. Own resources finance all the expenditure entered in the EU's general budget. Any surpluses are carried over to the following financial year.

Traditional own resources

Traditional own resources consist of Common Customs Tariff duties and of levies under the common organisation of the market for sugar ("sugar" levies). Member States may retain, by way of collection costs, 25% of the amounts raised.

VAT resource

The own resource based on VAT are levied on Member States' VAT bases, which have been harmonised for this purpose.

The maximum rate of call of the VAT resource is 0.30%. The maximum VAT base to be taken into account in calculating the rate of call is set at 50% of each Member State's GNI ("capping of the VAT resource"). For the period 2007-2013 the rate of call of the VAT resource is set at 0.225% for Austria, 0.15% for Germany and 0.10% for the Netherlands and Sweden.

The resource based on GNI

In the light of the revenue generated by the other own resources, the GNI resource is based on the application of a uniform rate to the sum of the GNIs of all the Member States.

For the period 2007-2013, two Member States will benefit from a gross reduction in their annual GNI contribution: an annual reduction of EUR 605 million for the Netherlands and of EUR 150 million for Sweden.

Correction in favour of the United Kingdom

The correction in respect of budgetary imbalances in the United Kingdom is calculated on the basis of the difference between the share of the UK VAT base in the EU's total VAT base and the share of the United Kingdom in total allocated expenditure.

Germany, Austria, the Netherlands and Sweden are entitled to a reduction in their share of the financing of the correction in favour of the United Kingdom, which is reduced to one quarter of its normal value.

Collection of own resources

The method for collecting own resources will continue to be determined by national provisions. The Commission will carry out a regular examination of those provisions. The Member States will regularly inform the Commission of any anomalies having a financial impact with respect to collection.


ActEntry into force - Date of expiryDeadline for transposition in the Member StatesOfficial Journal
Decision 2007/436/EC, Euratom--OJ L 163 of 23.6.2007


Council Regulation (EC, Euratom) No 1287/2003 of 15 July 2003 on the harmonisation of gross national income at market prices (GNI Regulation) [Official Journal L 181 of 19.07.2003].
A growing share of the European Communities' own resources is based on gross national income at market prices. The Regulation further reinforces the comparability, reliability and exhaustiveness of this aggregate.

Commission Decision 97/245/EC, Euratom of 20 March 1997 laying down the arrangements for the transmission of information to the Commission by the Member States under the Communities' own resources system [Official Journal L 97 of 12.4.1997].
See consolidated version

Council Regulation (EEC, Euratom) No 1553/89 on the definitive uniform arrangements for the collection of own resources accruing from value added tax [Official Journal L 155 of 7.6.1989].
The Regulation lays down a single method for determining the VAT bases in a uniform manner.
See consolidated version

Follow-up reports:

Commission report on the follow-up of traditional own resources in cases of fraud and irregularities [COM(2004)850 final - Not yet published in the Official Journal].
Under Regulation (EC) No 1150/2000, Member States are required to inform the Commission of cases of fraud or irregularity with a potential financial impact of over 10 000. The report reviews the situation as regards the system for recovering unpaid customs duties. Such duties form part of the own resources allocated directly to the Community budget. The Member States are responsible for the procedures for recovering customs debt under the control of the Commission. The Commission notes that amounts not recovered are relatively small compared with the total amount involved (160 million).

Commission report to the Council and the European Parliament: Fifth report under Article 12 of Regulation (EEC, Euratom) No 1553/89 on VAT collection and control procedures [COM(2004)855 final - Not published in the Official Journal].
Every three years the Commission draws up a report analysing the procedures applied by Member States for registering taxable persons and for determining and collecting VAT. It also analyses the modalities and results of their VAT control systems and suggests improvements.

Last updated: 03.11.2010
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