Every seven years, the Union decides about its future finances. This is a time for Leaders to commit financially to the kind of Union they want.
What could new Own Resources bring to the EU budget?
- Emission Trading System: The European Emissions Trading System is the cornerstone of EU climate policy. A number of allowances are auctioned by Member States and purchased by companies to cover their greenhouse gas emissions. A share of the proceeds from the auctioning of allowances could be made available for the EU budget. Depending on the market prices for allowances, a share of the revenues generated by the Emission Trading System could generate estimated revenues between EUR 7 billion and EUR 105 billion over seven years.
- VAT-based Own Resource: Value Added Tax is a consumption tax assessed on the value added to all goods and services sold in the EU. Today, the Own Resource based on that tax relies on very complex statistical calculations. A reformed Own Resource could be levied from a simplified Value Added Tax base. Revenues from the current VAT-based Own Resource are currently around EUR 105-140 billion over seven years and could be adjusted by calibrating the call-rate in function of required levels.
- Common Consolidated Corporate Tax Base: Large companies greatly benefit from the Single Market. The Common Consolidated Corporate Tax Base is a single set of common rules for the calculation of companies' taxable profits in the Union. A contribution based on a harmonised corporate tax base, possibly including a digital component, would reinforce the link between the benefits of the Single Market and the financing of the Union. Each Member State would retain the possibility to tax its share of the profits at its own national tax rate. Depending on the model chosen and the call-rate applied, a tax linked to the common consolidated corporate tax base could bring between EUR 21 and EUR 140 billion over seven years, not including expected revenue from the decrease of tax evasion.
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