(1a)

This Decision provides the legal basis for the Commission to borrow funds on the capital markets in order to finance expenditure in the framework of the Next Generation EU Recovery Package. The related costs of the principal and interest of the repayments must be re-financed by the Union budget in a pre-defined time frame depending on the maturities of the bonds issued and the debt repayment strategy. Such costs should not lead to an undue reduction in programme expenditure or investment instruments under the Multiannual Financial Framework (MFF), nor should they result in sharp increases in national contributions. Therefore, and in order to enhance the credibility and sustainability of the Next Generation EU repayment plan, such costs should be covered entirely by income from genuine new own resources. The related expenditure appropriations should be counted over and above the MFF ceilings, as to be provided for in the new MFF Regulation.

(1b)

Any amounts generated by new own resources beyond the level necessary to cover the repayment obligations in a given year should remain in the Union budget as general revenue. After the end of the repayment plan, those own resources should continue to fund the Union budget as general revenue. The introduction of a basket of new own resources should guarantee the appropriate level of financing of Union spending in the MFF, while mitigating the predominance of national GNI-based contributions in the financing of the Union's annual budget, and thereby diminish the conception of the Union budget as a ‘zero sum game’ marked by the ‘juste retour’ routines. This in turn could facilitate a better focus of expenditure at Union level on priority areas and common public goods with high efficiency gains compared to national spending.

(1c)

In order for their proceeds to be available when the interest and repayment obligations occur, the new categories of own resources should be introduced as of 2021. The new own resources should be aligned with Union policy objectives and should support the European Green Deal and the functioning of the single market, as well as efforts to improve the effectiveness of corporate taxation and to strengthen the fight against tax fraud, tax evasion and tax avoidance. The European Parliament, in its MFF-Own Resources Interim Report of November 2018, has already endorsed a possible basket of new own resources and other revenue that display such characteristics; that basket could be enlarged to include further options.

(5)

The present system for determining the VAT-based own resource has been repeatedly criticised by the Court of Auditors, the European Parliament and Member States as overly complex. The European Council of 17 — 21 July 2020 has therefore concluded that it is appropriate to simplify the calculation of that own resource.

(5)

The own resource based on Value Added Tax is a well-established source of income for the Union budget and should continue to reflect the intrinsic link between consumers in the single market and the Union public finances. However, the present system for determining the VAT-based own resource has been repeatedly criticised by the Court of Auditors, the European Parliament and Member States as overly complex. It is therefore appropriate to simplify the calculation of that own resource.

(6)

In order to better align the Union's financing instruments with its policy priorities, to better reflect the role of the Union's budget in the functioning of the Single Market, to better support the objectives of Union policies and to reduce Member States' contributions based on Gross National Income ( GNI) to the Union's annual budget, the European Council of 17 — 21 July 2020 concluded that the Union would over the coming years work towards reforming the own resources system and introduce new own resources. .

(6)

In order to finance at least the costs of principal and interest of the repayments of the Union Recovery Instrument, to better align the Union's financing instruments with its policy priorities, to better reflect the Union's budget role for the functioning of the Single Market, to better support the objectives of Union policies, such as the European Green Deal and digital transformation, whilst mitigating the predominance of Member States' GNI -based contributions to the Union's annual budget, it is necessary to introduce new categories of own resources based on the Common Consolidated Corporate Tax Base, the national revenue stemming from the European Union Emissions Trading System and a national contribution calculated on the basis of non-recycled plastic packaging waste, encouraging circular economy . Moreover, new own resources based on a Carbon Border Adjustment Mechanism, in full compatibility with WTO rules, a digital services tax and the Financial Transaction Tax, implemented preferably according to a scheme agreed by all Member States, should be introduced to that end as soon as the underlying legislative conditions are in place. The Commission should make the necessary legislative proposals for those new own resources and potential other new own resources, which support the European Green Deal as well as the functioning of the single market and efforts to improve the effectiveness of corporate taxation, as soon as possible. Potential new own resources already communicated by the Commission, such as the single market levy, should be further assessed before being presented to the European Parliament and the Council.

(7)

As a first step, a new category of own resources based on a national contribution calculated on the basis of non-recycled plastic packaging waste should be introduced. In line with the European strategy for plastics, the Union budget can contribute to reduce pollution from plastic packaging waste. An own resource which is based on a national contribution proportional to the quantity of plastic packaging waste that is not recycled in each Member State will provide an incentive to reduce the consumption of single-use plastics, foster recycling and boost the circular economy. At the same time, Member States will be free to take the most suitable measures to achieve those goals, in line with the principle of subsidiarity. In order to avoid an excessively regressive impact on national contributions, an adjustment mechanism with an annual lump sum reduction should be applied to contributions of Member States with a GNI per capita in 2017 below the EU average. The reduction should correspond to 3,8  kg multiplied by the population in 2017 of the Member States concerned.

(7)

In line with the Union strategy on plastics, the Union budget can contribute to reduce pollution from plastic packaging waste and achieve the packaging waste recycling targets. An own resource which is based on a national contribution proportional to the quantity of plastic packaging waste that is not recycled in each Member State will provide an incentive to reduce the consumption of single-use plastics, foster recycling and boost the circular economy. The Commission should establish a streamlined calculation method, as well as effective registration and control mechanisms. At the same time, Member States will be free to take the most suitable measures to achieve those goals, in line with the principle of subsidiarity. Given that that contribution is intended to be an own resource building on the polluter pays principle, it should not be subject to any correction mechanism.

(7a)

The Union considers it a priority to achieve its emission reduction target of at least 40 % between 1990 and 2030 in accordance with its commitments under the Paris Climate Agreement. The European Union Emissions Trading System (ETS) is one of the main instruments that has been put in place to implement that objective and generates revenue through the auctioning of emission allowances. Considering the harmonised nature of the ETS as well as the funding provided by the Union to foster mitigation and adaptation efforts in Member States, it is appropriate to introduce a new own resource for the Union budget in that context. That own resource should be based on the allowances to be auctioned by Member States, including transitional free allocation to the power sector. In order to take account of the specific provisions for certain Member States provided for in Directive 2003/87/EC of the European Parliament and of the Council  (1a) , allowances redistributed for the purposes of solidarity, growth and interconnections as well as allowances dedicated to the Innovation Fund and the Modernisation Fund should not be counted for determining the own resource contribution. The own resource based on the ETS should also be defined in a way that includes the potential additional revenue resulting from future expansion of the scope of the ETS Directive to new sectors or geographical regions, while ensuring Union competitiveness.

(8)

The European Council of 17 — 21 July 2020 noted that, as a basis for additional own resources, the Commission will put forward in the first semester of 2021 proposals on a carbon border adjustment mechanism and on a digital levy with a view to their introduction at the latest by 1 January 2023. The European Council invited the Commission to put forward a revised proposal on Emissions Trading System, possibly extending it to the aviation and maritime sectors. It concluded that the Union will, in the course of the multiannual financial framework (MFF) for the period 2021-2027, work towards the introduction of other own resources, which may include a Financial Transaction Tax.

(8)

The required additional own resources should be introduced at the latest by 2028 according to a legally binding calendar set out in this Decision, which should ensure that the underlying legislation can be adopted in time and be made operational so that the proceeds are available when the costs occur. The Commission should make legislative proposals to that effect. An interinstitutional agreement between the European Parliament, the Council and the Commission should set out more detailed arrangements and other provisions relating to that legally binding calendar such as the dates of entry into force or possible retroactive application of certain new own resources.

(8a)

As a first step, the contribution based on non-recycled plastic packaging waste will complement the existing own resources as of January 2021. Moreover, 30 % of the revenue of the auctioning proceeds of the ETS will constitute general income for the Union budget as of 2021. As a second step, the Commission will make the necessary proposals to turn the Financial Transaction Tax (FTT) into a basis for an own resource as of 2024. The Commission will also make legislative proposals during the first semester of 2021 to introduce new own resources based on the Carbon Border Adjustment Mechanism (CBAM) and on a digital levy. The proceeds will become available as of 2023. If the CBAM takes the form of additional customs tariffs on imports, it will be covered by the traditional own resources legislation and would not require a separate own resources decision. If the CBAM takes the form of an extension of the scope of the ETS, it should be fully covered by the ETS-based own resource. As a third step, and as part of the midterm review / revision of the Multiannual Financial Framework in the first semester of 2024, the Commission will make further new — or re-cast former — proposals to turn the Common Consolidated Corporate Tax Base (CCCTB) into a basis for an own resource. The legislation should come into effect in time for the proceeds of these new own resources to be available as of 2026. Tax-based own resources will not have to be applied retroactively.

(9)

The European Council of 17 — 21 July 2020 concluded that the own resources arrangements should be guided by the overall objectives of simplicity, transparency and equity, including fair burden-sharing. It also concluded that Denmark, the Netherlands, Austria and Sweden, and in the context of the support for the recovery and resilience, as well as Germany, are to benefit from lump sum corrections to their annual GNI-based contributions for the period 2021-2027.

(9)

Rebates and other correction mechanisms should be abolished.

(9a)

(9b)

In view of future deliberations about treaty changes, and using the momentum of the Conference on the Future of Europe, the democratic legitimacy, accountability, resilience and alignment with major policy objectives of the Union budget’s revenue side, should be further strengthened by granting the European Parliament enhanced competences in the legislative decision making and a more active role in the monitoring of the implementation of the own resources system as well as in the underlying sectoral legislation.

(10)

Member States should retain, by way of collection costs , 25 % of the amounts of traditional own resources collected by them.

(10)

The retention, by way of collection costs , of 20 % of the amounts collected by the Member States for traditional own resources constitutes a high share of own resources not being made available to the Union budget. The collection costs retained by Member States from the traditional own resources should be restored from 20 % to the original level of 10 % to better align financial support for customs equipment, staff and information with the actual costs and needs. That share should be the same for all Member States.

(11)

In accordance with the fourth paragraph of Article 311 of the Treaty on the Functioning for the European Union a Council Regulation laying down implementing measures for the Union's own resources system will be established . Such measures should include provisions of a general and technical nature, applicable to all categories of own resources . Those measures should include detailed rules for the calculation and budgeting of the balance, as well as provisions and arrangements necessary for controlling and supervising the collection of own resources .

(11)

In accordance with the fourth paragraph of Article 311 of the Treaty on the Functioning for the European Union the Council is to lay down implementing measures for the Union's own resources system. Such measures should include provisions of a general and technical nature, applicable to all types of own resources and for which appropriate parliamentary oversight is particularly important . Those measures should include detailed rules for establishing the amounts of the own resources referred to in Article 2(1) to be made available, including the applicable call rates for the own resources referred to in points (b) to (e) of Article 2(1), the technical issues related to Gross National Income, the provisions and arrangements necessary for controlling and supervising the collection of own resources , including rules on inspections and on powers of officials and other servants authorised by the Commission to carry out inspections and any relevant reporting requirements. Those measures should also include practical provisions to periodically inform Member States and the European Parliament as one arm of the budgetary authority, about the state of play of the borrowing, the debt management and related risk management strategies as well as the repayment plan.

(13)

A sufficient margin should be preserved under the own resources ceilings for the Union to cover all of its financial obligations and contingent liabilities falling due in any given year. The total amount of own resources allocated to the Union budget to cover annual appropriations for payments should not exceed 1,40  % of the sum of all the Member States’ GNIs. The total amount of annual appropriations for commitments should not exceed 1,46  % of the sum of all the Member States' GNIs .

(13)

In order to preserve a sufficient margin under the own resources ceilings for the Union to cover all of its financial obligations and contingent liabilities falling due in any given year, the own resources ceiling should be increased to a level of 1,50  % of the sum of the Member States’ Gross National Income at market prices for appropriations for payments.

(16a)

For the sole purpose of covering the additional financial obligations and contingent liabilities arising from the exceptional and temporary empowerment to borrow funds and to ensure financial sustainability even in times of economic downturn, the ceiling for payment appropriations should be increased by 0,6 percentage points.

(19)

The repayment of funds borrowed in order to provide non-repayable support, repayable support through financial instruments or provisioning for budgetary guarantees, as well as the interest due, should be funded by the Union budget. The borrowed funds which are granted as loans to Member States should be repaid by the sums received from beneficiary Member States. The necessary resources need to be allocated and made available to the Union for it to be able to cover all of its financial obligations and contingent liabilities resulting from the exceptional and temporary empowerment to borrow in any given year and under any circumstances in compliance with Article 310(4) TFEU and Article 323 TFEU.

(19)

The repayment of funds borrowed in order to provide non-repayable support, repayable support through financial instruments or provisioning for budgetary guarantees, as well as the interest due, should be funded by proceeds from the new own resources introduced in the Union budget. The borrowed funds which are granted as loans to Member States should be repaid by the sums received from beneficiary Member States. The necessary resources need to be allocated and made available to the Union for it to be able to cover all of its financial obligations and contingent liabilities resulting from the exceptional and temporary empowerment to borrow in any given year and under any circumstances in compliance with Article 310(4) TFEU and Article 323 TFEU.

(25)

This Decision should enter into force only once it has been approved by all Member States in accordance with their respective constitutional requirements thus fully respecting national sovereignty. The European Council of 17 — 21 July 2020 noted the intention of Member States to proceed with the approval of this Decision as soon as possible. Due to the need to urgently enable borrowings with a view to financing measures addressing the consequences of the COVID-19 crisis, this Decision should enter into force on the first day of the first month following receipt of the last notification of the completion of the procedures for the adoption of this Decision.

(25)

In order to allow the beginning of the process of ratification this Decision is adopted by the Council after having consulted the European Parliament. The European Parliament expressed its intention to swiftly provide the consultative opinion which is legally necessary to expedite the process authorising the Commission to start with the borrowing operations to finance the European Recovery Instrument. This Decision should enter into force only once it has been approved by all Member States in accordance with their respective constitutional requirements thus fully respecting national sovereignty, including with regard to new categories of own resources . The European Council of 17 — 21 July 2020 noted the intention of Member States to proceed with the approval of this Decision as soon as possible. Due to the need to urgently enable borrowings with a view to financing measures addressing the consequences of the COVID-19 crisis, this Decision should enter into force on the first day of the first month following receipt of the last notification of the completion of the procedures for the adoption of this Decision.

(c)

the application of a uniform call rate to the weight of plastic packaging waste generated in each Member State that is not recycled. The call rate shall be EUR 0,80 per kilogram. An annual lump sum reduction for certain Member States as defined in the fourth subparagraph shall apply ;

(c)

the application, as of 1 January 2021, of a uniform call rate to the weight of plastic packaging waste that is not recycled; the actual call rate shall not exceed EUR  2,00 per kilogram;

(ca)

the application, as of 1 January 2021 of a uniform call rate to the amount representing the revenue generated by the allowances to be auctioned referred to in point (a) of Article 10(2) of Directive 2003/87/EC and the market value of transitional free allowances for the modernisation of the energy sector as determined in Article 10c(3) of that Directive; the actual call rate shall not exceed 50 %; the entirety of the incremental revenue generated by any future enlargement of the scope of the Emissions Trading System after 1 January 2021 to additional sectors and regions;

(cb)

the revenue generated by a Carbon Border Adjustment Mechanism pursuant to Commission proposal […/…] by 1 January 2023;

(cc)

the revenue collected from the Digital Services taxation, pending adoption and implementation of the Council Directive on a common system of a digital services tax on revenues resulting from the provision of certain digital services (COM(2018)0148) by 1 January 2023; the actual call rate shall not exceed 100 %;

(cd)

the application, as of 1 January 2026 of a uniform call rate to the share of taxable profits attributed to each Member State pursuant to Union rules on the Common Consolidated Corporate Tax Base; the actual call rate shall not exceed 6 %;

(ce)

the application, as of 1 January 2024, of a financial transaction tax to be levied pursuant to Council Directive (EU) No […/…], with the applicable call rates in the amount of a share not exceeding the minimum rates set out in that Directive; if the Financial Transaction Tax directive is temporarily implemented under enhanced cooperation, this own resource shall not affect the Member States that are not participating in the enhanced cooperation;

(ba)

the budgetary treatment of revenue stemming from competition fines and infringement cases;

(bb)

rules for establishing the amounts of the own resources referred to in points (a) — (ce) of Article 2(1) to be made available, including the applicable call rates for those own resources, within the limits set in those points as well as the calculation of the applicable rate of the own resource based on Gross National Income;

(bc)

the reference Gross National Income, the provisions to adjust Gross National Income and the provisions to recalculate the ceilings for payments and commitments in case of significant changes to Gross National Income, for the purposes of applying Article 2(1);