EU Commission Proposes "Independent Revenue Sources" Plan

The European Commission has unveiled a new proposal for an own resource system, known as the Corporate Resource for Europe (CORE), as part of a package aimed at shaping the EU budget for the 2028-2034 period.

The CORE contribution calculation is based on the definition of net turnover as it is in Article 2 (5) of Directive 2013/34/EU. This financial contribution, designed to target large companies with annual net turnover exceeding €100 million active in the EU single market, has raised questions regarding its legal basis, given its resemblance to a tax.

The CORE proposal is a significant step towards a more robust and independent EU budget. Adoption of the CORE proposal requires a unanimous agreement by all EU Member States in the Council after a consultation of the European Parliament. Following Council adoption, the decision must be ratified by all Member States in accordance with their constitutional requirements.

The CORE annual lump-sum contributions are differentiated based on a company's annual net turnover, with four tiers for different turnover ranges. Companies with an annual net turnover of more than €100m but less than €250m will pay €100,000, while those with an annual net turnover of €250m to less than €500m will pay €250,000. Companies with an annual net turnover of €500m to less than €750m will pay €500,000, and those with an annual net turnover of €750m or more will pay €750,000.

However, the CORE proposal has faced criticism in the European Parliament and some Member States have expressed their dissent. The concerns revolve around issues of fairness and robustness, as the lump-sum contribution per legal entity is independent of the profitability of the company.

The package also includes a proposal for a Council Decision on the system of own resources, which introduces five new own resources for the European Union (EU). The CORE is introduced under Article 311 TFEU and does not necessitate additional sectoral legislation, according to the European Commission.

The European Commission's Own Resources Decision (ORD) is another key aspect of the proposal. This decision aims to provide the EU with a more stable and predictable revenue base, which is essential for the smooth functioning of the EU budget. Adoption of the ORD requires unanimous approval by the Council (EU Member States) and consultation of the European Parliament.

As of now, there are no specific member states publicly identified as having declared an official position on the introduction of the CORE. The ORD will now move to negotiations between Member States. The proposal for CORE could be seen as a "quick fix" to address the need for alternatives to Pillar One and Digital Services Taxes amid ongoing trade negotiations with the United States.

The publication of this proposal package on 16 July 2025 marks a significant step towards shaping the future of the EU budget. The next steps will involve intense negotiations and debates among the EU Member States and the European Parliament to reach a consensus on these proposals.