The Impact of the Traditional Own Resources on the Budget of the European Union

Abstract

Traditional own resources are a part of a broader category of European Union revenues – the own resources. The own resources category consists of three types of resources: traditional own resources, which mainly consist of customs duties on imports from outside the European Union and sugar levies, own resources based on value-added tax (VAT) and own resources based on GNI – gross national income (each Member State transfers a standard percentage of its GNI to the EU), which serves as the balancing resource. Currently, the types of own resources and the methods for calculating them have been set by Council in a decision of 26 May 2014 on the system of own resources of the European Union. Changes were introduced to the system of the own resources for the period 2014-2020. The decision has entered into force on 1 October 2016, however, the rules apply retroactively as of 1 January 2014. The aim of this article is to analyze the issue of traditional own resources (a part of a broader category of resources – the own resources) and its impact on the budget of the European Union.