The EU Commission has put together a comprehensive package of proposals aimed at reorganizing the EU's financial constitution from 2021 onwards.

AD – 05/2018

Multiannual Financial Framework 2021-2027

The proposal for the Multiannual Financial Framework (MFF) for the period 2021 to 2027, which was forwarded by the EU Commission to the Council, was discussed for the first time on 14 May 2018. The intention is to use this opportunity to reform the EU's own resources system. 

What are EU own resources?

The expenditure planned in the MFF must be financed through revenue. The EU itself does not impose taxes and duties. Instead, it receives so-called own resources from the Member States (Article 311 TFEU). Own resources consist of a share of VAT collected by Member States, ‘membership fees’ paid by the Member States based on their gross national income, and customs duties paid on imports into the EU. 


Changes to own resources require unanimity in the Council, consultation (not approval) of the European Parliament and ratification by all Member States, in accordance with their respective constitutional requirements.  

New own resources

The European Commission has proposed the following new own resources: 


  • 20% of the revenues from the Emissions Trading System; 
  • 3% of the new Common Consolidated Corporate Tax Base (which is yet to be introduced); and 
  • 0.80 EUR for every kilo of non-recycled plastic packaging waste. 


Critics had feared that the Commission would propose an ‘EU Tax’ paid directly by citizens and companies to the EU treasury; however, this is not a part of the current proposal. 


More information on the reform of the own resources system can be found in the European Commission’s proposal for a Council Regulation. 

Additionally a corresponding working document of the European Commission is available. 

What next?

The European Council will officially deal with the European Commission’s proposal for the first time on 28 and 29 June – it is said that conclusions are already being made on the roadmap towards concluding MFF negotiations and possibly also on individual taxation issues, if agreement can be reached.