Where does the money come from?

The European Union has its 'own resources' to finance its expenditure. Legally, these resources belong to the Union. Member States collect them on behalf of the EU and transfer them to the EU budget.

Own resources are of three kinds (the figures below refer to the forecasts for 2010).

• Traditional own resources (TOR) — these mainly consist of duties that are charged on imports of products coming from a non-EU state. They bring in approximately EUR 14.1 billion or 12 % of the total revenue
  
  
• The resource based on value added tax (VAT) is a uniform percentage rate that is applied to each Member State’s harmonised VAT revenue. The VAT-based resource accounts for 11 % of total revenue, or some EUR 14.0 billion..
  
  
• The resource based on gross national income (GNI) is a uniform percentage rate (0.73 %) applied to the GNI of each Member State. Although it is a balancing item, it has become the largest source of revenue and today accounts for 6976 % of total revenue or EUR 8092.7 billion

The budget also receives other revenue, such as taxes paid by EU staff on their salaries, contributions from non-EU countries to certain EU programmes and fines on companies that breach competition or other laws. These miscellaneous resources add up to around EUR 1.4 billion, i.e. about 1 % of the budget.

The total EU revenue for 2010 amounts to some EUR 141.3 billion.

Revenue flows into the budget in a way which is roughly proportionate to the wealth of the Member States. The United Kingdom, Germany, the Netherlands, Austria and Sweden, however, benefit from some adjustments when calculating their contributions.

On the other hand, EU funds flow out to the recipients within the Member States and in third countries in accordance with the priorities that the Union has identified. Less prosperous Member States receive proportionately more than the richer ones and most countries receive more than they pay in to the budget.