The EU budget:
- mainly customs duties on imports from outside the EU and sugar levies.
EU governments keep 25% to cover the cost of collection.
In detail: Public finances – page 238
A standard percentage is levied on the harmonised VAT base of each EU country. The VAT resource accounts for around €14bn.
The VAT base to be taxed is capped at 50% of GNI for each country. This rule is intended to prevent less prosperous countries having to pay a disproportionate amount (in such countries consumption – and so VAT – tend to account for a higher percentage of national income).
In detail: Public finances – page 239
A standard percentage is levied on the GNI of each EU country. It is used to balance revenue and expenditure, i.e. to fund the part of the budget not covered by other sources of income.
Although designed simply as a balancing system, this has become the largest source of revenue – €92.7bn in 2010.
In detail : Public finances – page 241
The budget also has other sources of revenue, e.g.:
In detail : Public finances – page 245
When the EU Council and the European Parliament approve the annual EU budget, total revenue must equal total expenditure.
In practice, however, actual revenue and expenditure often differ from the estimates. There is usually a surplus, which is used to reduce EU countries' contributions to the budget for the following year.
In the past, some countries felt that they were paying too much towards the budget, compared to other countries.
Measures were taken to correct (compensate) these imbalances, including:
The cost of the UK rebate is divided among EU member countries in proportion to the share they contribute to the EU's GNI. However, since 2002 this has been limited to 25% of its normal value for Germany, the Netherlands, Austria and Sweden, who considered their relative contributions to the budget to be too high. This cost is shared by the other 22 EU members.
In detail :