Dáil Éireann Debate, Monday - 11 September 2023
483. Deputy Louise O'Reilly asked the Minister for Finance if the State is in line for a rebate on its contribution to the EU given the EU's reported higher-than-expected customs duties and VAT receipts; if so, the estimated value of this rebate; and if he will make a statement on the matter. [38915/23]
View answerIreland does not receive rebates on its contributions to the EU budget. However, annual balancing exercises are carried out in respect of GNI and VAT based own resources to ensure that each Member State ends up paying the correct amount in respect of any given year. This involves retrospective comparison of the forecasts for GNI and VAT provided by the member states for the prior year with the actual outturn.
EU budget contributions are calculated through a system known as Own Resources, of which there are currently four types in operation:
• VAT-based own resource
• Traditional own resources (customs duties and levies)
• Non-recycled plastic packaging waste based own resource
• GNI-based own resource
Under the VAT-based contribution , Member States are required to apply a uniform call rate of 0.3% to the national VAT base. The VAT bases for all Member States are first harmonised and then capped at 50% of the GNI base before the levy is applied. In 2022, Ireland’s VAT contribution was €323 million.
Traditional own resources comprise of customs duties on imports from outside the EU. These are collected by Member States on behalf of the EU. 25% is retained by Member States as collection costs. These duties are levied at rates based on the common customs tariff. In 2022, Ireland’s Traditional Own Resource payments were €482 million.
Contributions based on non-recycled plastic packaging waste are calculated from the amount of non-recycled plastic packaging waste that each Member State reports to Eurostat. A uniform call rate of €0.80 per kilogram is applied to plastic packaging waste that is not recycled, with a mechanism in place to avoid excessive contributions from less wealthy Member States. In 2022, Ireland’s plastic-based contribution was €197 million.
The main source of revenue for the EU Budget is the GNI-based own resource. This is calculated proportionately to the Member States’ GNI, used as an indicator of a country’s economic strength, as a share of overall EU GNI. In 2022 Ireland’s GNI contribution was €2.555 billion.
The GNI-based own resource has gradually become the main source of revenue for the EU budget, now representing about 70 per cent of its revenue. As the EU Budget should always be in balance, the GNI-based own resource covers the difference between the overall level of expenditure and the proceeds generated from the VAT, traditional customs based, and non-recycled plastic packaging waste own resources and other revenue including contributions from non-EU countries to certain programmes, interest on late payments and fines.
The payment of VAT and GNI contributions are based on projections, with Member States required to submit data on an annual basis. The following year when the actual figures are available, a "true-up" calculation is prepared and amounts are paid to, or refunded from the EU.
The last year that Ireland received a refund on contributions paid to the EU Budget was 2019. As the GNI outturn for Ireland has since been higher than forecast due to stronger than expected economic performance, Ireland has paid in additional funds from 2020-2022 as a subsequent year adjustment as follows:
|
Gross GNI and VAT contributions (€mn) |
Subsequent year adjustment (€mn) |
Percentage adjustment |
|
|
2019 |
1,992 |
-44.5 |
-2.20% |
|
2020 |
2,187 |
84.5 |
3.90% |
|
2021 |
2,740 |
185.7 |
6.80% |
|
2022 |
2,727 |
101.5 |
3.72% |
