In the context of the legislative negotiations on the new system of EU financing, the Council is proposing a simplification of the calculation of the VAT-based own resource and has requested an opinion on this from the ECA as soon as possible.
The ECA welcomes the Council proposal, which significantly simplifies the current calculation of Member States' VAT-based contributions by eliminating most corrections and compensations, and introducing the use of a 'definitive' multiannual Weighted Average Rate (WAR) frozen at the reference year of 2016. However, in our opinion, there is a risk that such a frozen multiannual WAR will not be representative for all Member States. Consequently, the calculation of the Member States' VAT-bases and related contributions may not maintain reasonable accuracy.
To improve the current proposal, we suggest considering a mechanism which would ensure the WAR is reviewed, during the multiannual financial framework period, for instance, in the light of changes to Member States' VAT policies. We believe that our suggestion will ensure greater accuracy without creating much administrative burden for the Commission and the Member States.
Opinion No 11/2020 concerning the draft Council Regulation (EU, Euratom) amending Regulation (EEC, Euratom) No 1553/89 on the definitive uniform arrangements for the collection of own resources accruing from value added tax