POLICY BRIEF March 2026 NEW OWN RESOURCES FOR THE EU BUDGET ABSTRACT As part of its proposals for the Multiannual Financial Framework(MFF) for 2028 to 2034 launched on 16 July 2025, the European Commission suggested five new own resources: new own resources based on revenue from the EU Emission Trading System (ETS), the Carbon Border Adjustment Mechanism(CBAM) and noncollected e-waste; the corporate resource for Europe(CORE); and a tobacco excise duty own resource(TEDOR). In the upcoming negotiations on the next MFF, the implementation of new own resources should be a priority. Their introduction could rest on a two-pronged strategy: with the MFF 2028-2034, the focus should be on the Commission proposals, which could be mobilised quickly. The proposed new own resources based on the EU ETS and the CBAM, as well as the CORE, would be more genuine than current own resources. All Commission proposals would support important EU goals and strategies. Political acceptance should be highest for the CBAM-based own resource, while political feasibility could be lowest for TEDOR and the e-waste-based own resource, which would have to be paid out of member states’ budgets. Further tax-based own resources, which could rest on aviation and shipping, cryptocurrencies and net wealth, should be prepared for the post-2034 MFF. AUTHOR MARGIT SCHRATZENSTALLER Senior Economist, WIFO IN PARTNERSHIP WITH

Policy Brief published in March 2026 by FOUNDATION FOR EUROPEAN PROGRESSIVE STUDIES(FEPS) Avenue des Arts 46 1000 Brussels(Belgium) www.feps-europe.eu @FEPS_Europe IN PARTNERSHIP WITH FRIEDRICH-EBERT-STIFTUNG(FES) EUROPEAN UNION& GLOBAL DIALOGUE| BRUSSELS OFFICE Rue du Taciturne 38 1000 Brussels(Belgium) https://brussels.fes.de/ @FES_Europa AUSTRIAN INSTITUTE OF ECONOMIC RESEARCH(WIFO) Arsenal, Objekt 20 1030, Vienna(Austria) www.wifo.ac.at @WIFOat This Policy Brief was produced with the financial support of the European Parliament. It does not represent the view of the European Parliament. Copyright© 2026 by the Foundation for European Progressive Studies and Friedrich-Ebert-Stiftung Content editor: Anna Kolesnichenko Project coordinator: Luis Sáez Jiménez Language editor: Rosalyne Cowie Layout: Agencia Downtown Cover image: shutterstock.com/g/3rdtimeluckystudio Suggested citation: Schratzenstaller, M.(2026)“New own resources for the EU budget”. Policy Brief, Foundation for European Progressive Studies. ISBN: 978-2-39076-057-3 KBR deposit number: D/2026/15396./09 2 New own resources for the EU budget

TABLE OF CONTENTS 1. Introduction....................................................................................................................... 4 2. The current EU revenue system and its shortcomings...................... 4 3. The European Commission proposals for new own resources..... 6 3.1 Overview of the Commission proposals................................................ 6 3.2 Brief assessment of the Commission proposals............................. 9 4. Proposals by the European Parliament........................................................ 12 5. A two-pronged strategy for the introduction of new own resources.................................................................................................................................. 12 5.1 New own resources for the MFF 2028-2034....................................... 12 5.2 New own resources for the post-2034 MFF........................................ 14 6. Conclusions..................................................................................................................... 15 About the author............................................................................................................... 18 On similar topics................................................................................................................. 20 New own resources for the EU budget 3

Acknowledgements The author is indebted to Giacomo Benedetto and Zsolt Darvas for very helpful comments and suggestions, and to Andrea Sutrich and Stephan Schreml for careful research assistance. 1. Introduction In recent years, the decade-old debate on the reform of the EU’s system of own resources has intensified for various reasons. 1 Most recently, several new own resources have been suggested by the European Commission as part of its proposals for the new Multiannual Financial Framework(MFF) launched mid-July 2025: new own resources based on revenue from the EU Emission Trading System(ETS), the Carbon Border Adjustment Mechanism(CBAM) and non-collected e-waste; the corporate resource for Europe(CORE); and a tobacco excise duty own resource(TEDOR). This policy brief explores options to implement new own resources to(partially) replace current own resources and to enhance the EU’s revenue base. It starts with a brief description of the current EU financing system and its shortcomings. Then the Commission’s latest new own resources proposals are briefly presented and assessed. Moreover, several innovative suggestions for new own resources suggested by the European Parliament are discussed briefly. Also further innovative own resource options are briefly assessed. The policy brief closes with some recommendations regarding the way forward. The assessments undertaken here consider the revenue potential of the various options, their contributions to EU policies, their fairness and distributional implications, and their political feasibility and the speed of their mobilisation. Moreover, they take into account several general principles that make potential revenue sources particularly suitable own resource candidates. 2 In particular, potential new own resources should be genuine, that is, they should be linked to EU policies and mechanisms instead of being transferred as national contributions from member states’ budgets to the EU budget. 3 Genuine own resources enhance the EU’s fiscal autonomy and they mitigate member states’ net position thinking. Furthermore, own resources based on taxes and levies that are hard to enforce at the national levels, so that EUwide coordination is necessary, are particularly suitable as own resources. Moreover, a modern EU revenue system should be based on a broadbased package of diverse new own resources that achieves a fair distribution of the total financial burden across member states and sectors and contributes to various EU objectives and policies. 2. The current EU revenue system and its shortcomings Currently, the regular EU budget, the MFF, is financed mainly through own resources, the share of which in overall EU revenue amounted to 91.8% in 2020(see Figure 1). 4 The remaining EU revenue consists of other revenue, which stems from various rather heterogeneous revenue sources. 5 The share of own resources in overall EU revenue amounted to 79.6% in 2024. According to the latest projections, the share of own resources in overall EU revenue can be expected to rise again to about 98% from 2026. 4 New own resources for the EU budget

Figure 1. Composition of EU total revenue from a long-term perspective, 1958-2034. Source: European Commission, author’s own representation. Excluding other revenue related to NextGenerationEU(NGEU). Currently, four distinct own resources exist. In 2024, traditional own resources(custom duties), the weight of which has been declining over time, contribute 14.2% to overall own resources. The value added tax(VAT) based own resource yields 16.6%, and the plastic-based own resource yields 5.1% of overall own resources. The gross national income(GNI) based own resource, which is the residual revenue source adjusted annually to cover the EU’s financial obligations and achieve a balanced budget, makes up for 64.0% of total own resources. Over the last decades, custom duties and the VAT-based own resource have been losing weight, while the GNI-based own resource has become by far the largest revenue source. The heavy reliance on the GNI-based own resource has several advantages. 6 It achieves a fair distribution of the financial burden across member states, is associated with a moderate administrative burden, generates a reliable and sufficient revenue stream, and is broadly accepted across member states. Notwithstanding these advantages, the EU’s system of own resources has been criticised for a long time. 7 Firstly, with the exception of the plastic-based own resource, which aims to provide incentives to member states to reduce non-recyclable plastic waste, the current own resource system does not contribute to important EU policies. Only customs revenue is related to the tasks and competences of the EU. Moreover, the bulk of current own resources consists of national contributions to the EU paid by member states out of national budgets. This financing structure aggravates the juste retour thinking, prevailing among member states, that New own resources for the EU budget 5

aims to maximise the balance of returns from and national contributions to the EU budget(or at least minimising a negative balance in the case of net contributing member states). In addition, national contributions do not represent an independent revenue source for the EU, and thus, do not provide it with fiscal autonomy. Not least, national contributions are increasingly coming under pressure, as many member states are confronted with fiscal consolidation needs related to the recent multiple crises. Against this background, the implementation of new own resources more recently has been high on the agenda of EU institutions to serve several aims. Firstly, new own resources are proposed to replace a part of existing own resources – and particularly the GNI-based own resource – to improve the structure of the own resource system. Secondly, they are suggested to generate additional revenue for NGEU debt service, which otherwise would eat into important MFF programmes, and to broaden the EU’s revenue base to be able to service potential future EU debt. 8 Thirdly, new own resources could finance an enhanced EU budget fit to respond to pressing challenges, ranging from climate change and environmental sustainability to ramping-up spending for digital change, development cooperation, migration, security and defence, trans-European networks, and research on further enlargement rounds. To cover the existing funding gaps in these areas, the EU budget would need to be more than doubled from the current 1.1% of GNI to up to 2.5% of GNI, according to Thöne, 9 or quadrupled, according to Felbermayr and Pekanov. 10 Financing a higher EU budget through new own resources instead of higher national contributions could help to secure member states’ support for an increase of the EU budget. 3. The European Commission proposals for new own resources 3.1 Overview of the Commission proposals In the recent past, the European Commission repeatedly pushed for the implementation of new own resources more closely linked to EU priorities to strengthen the EU’s fiscal autonomy. The Commission’s 2018 proposals for the MFF 2021-2027 included an own resource based on the auction revenue from the EU ETS, a plasticbased own resource and an own resource based on a common consolidated corporate income tax base including the digital sector. Of these suggestions, the plastic-based own resource was adopted to complement existing own resources as of 2021, while the EU’s Innovation Fund and Modernisation Fund, which are outside the MFF, are financed by ETS revenue. Together with the adoption of the EU pandemic rescue programme NGEU, the introduction of several new own resources was agreed upon by member states in December 2020(see Box 1 for details). The Commission was asked to put forward concrete proposals, on which, however, no agreement could be reached among member states. 6 New own resources for the EU budget

BOX 1. NGEU AND NEW OWN RESOURCES. The Interinstitutional Agreement(IIA) accompanying NGEU adopted in December 2020 includes a legally binding agreement on the stepwise introduction of new own resources during the 2021 to 2027 MFF period. The first step consisted of the implementation of the plasticbased own resource in 2021. Moreover, the European Commission was asked to suggest concrete proposals for own resources based on a CBAM, as well as a revised EU ETS possibly extended to aviation and shipping, and for a digital levy by June 2021, which were supposed to repay debt incurred to finance NGEU. By June 2024, the European Commission was asked to put forward a proposal for further new own resources, which could be based on financial transactions, the corporate sector or a new harmonised corporate tax base. They should have been adopted by the Council by mid2025, with a view to their introduction by the beginning of 2026. As no agreement could be reached on the first basket of new own resources, the European Commission proposed an adjusted basket of new own resources 11 as one element of the MFF mid-term review in June 2023. This adjusted package includes an ETS-based own resource, consisting of 30% of auction revenues from the ETS and yielding€7 billion per year as of 2024 and€19 billion per year as of 2028; a CBAM-based own resource, based on 75% of revenues from the CBAM, from which a yearly amount of €1.5 billion is expected as of 2028; and an own resource stemming from levying 0.5% on the gross operating profit of corporations, which should generate yearly revenues of€16 billion. Altogether, this adjusted first basket of new own resources was expected to yield€23 billion annually if it started in 2024 and up to€36.5 billion by 2028. No progress has been made regarding this adjusted package of new own resources either, which motivated the Commission to launch a slightly revised proposal for a package of new own resources together with the MFF proposals issued mid-July 2025. As one element of their post-2027 MFF proposals issued in mid-July 2025, the Commission suggested five new own resources from which overall annual revenues of€44 billion are expected(Figure 2). 12 Together with several adjustments to current own resources yielding€14.3 billion in additional revenue, the Commission’s own resource proposals would imply about€58 billion in revenue per year. New own resources for the EU budget 7

Figure 2. European Commission proposal for new own resources from July 2025. Source: European Commission, in 2025 prices. The Commission’s proposals comprise the following options for new own resources: • EU ETS-based own resource: a share of 30% of the revenue from the first pillar of the EU ETS(ETS1) shall generate€9.6 billion per year. • CBAM-based own resource: 75% of the revenue from the CBAM introduced in 2023, which is expected to yield€1.4 billion per year. • Non-collected e-waste-based own resource: a contribution of€2 per kilogram of noncollected e-waste(to be adjusted to inflation annually) shall lead to revenues of€15 billion annually. • TEDOR: 15% of revenue based on the memberstate-specific minimum rate for manufactured tobacco and tobacco-related products shall contribute€11.2 billion per year. • CORE: an annual lump-sum contribution of companies operating in the EU with an annual turnover above€100 billion is expected to generate€6.8 billion annually. Some of the suggested options are based on earlier proposals(own resources based on revenue from the EU ETS and the CBAM; see Box 1), while CORE replaces earlier proposals for a contribution of the corporate sector; own resources based on non-collected e-waste and TEDOR are new proposals. 8 New own resources for the EU budget

Several adjustments of current own resources are expected to yield another€14.3 billion per year(see Figure 2). In particular, the share of member states in revenue from customs to cover collection costs shall be reduced from 25% to 10%, the call rate of the plastic based own resource shall be inflation adjusted annually, and lump-sum reductions granted to various member states with regard to the GNI- and the plastic-based own resource shall be eliminated. In summary, the Commission’s own resource package shall yield estimated annual revenues of€58.2 billion. 3.2 Brief assessment of the Commission proposals The revenue potential related to the Commission’s own resource proposal should suffice to cover NGEU debt repayment; the expected revenue could be more than double the amount needed. Thus, cuts in MFF programmes and/or an increase of member states’ GNIbased own resource payments that would be required otherwise for NGEU debt service could be avoided. The remainder of the yield from these new own resources could replace a part of member states’ GNI-based own resource payments: according to Commission estimates, the share of GNI-based own resources in overall own resources could decrease from a share of 72% in 2026 and 2027 to 50% in 2034(see Figure 2). Such a use of new own resource revenue at the same time implies that the potential of new own resources to finance a considerable extension of the MFF would not be exploited: the Commission proposals foresee an increase of the volume of the current MFF, which amounts to 1.12% of GNI, to 1.26% of GNI only. Hereby, the major share of the envisaged increase(0.11% of GNI) is dedicated to NGEU-related debt repayment so that non-debt service spending would be raised by a mere 0.03% of GNI. The ETS- and CBAM-based own resources would represent – at least in a broader sense – genuine own resources insofar as they stem from EU mechanisms that are much more efficient if implemented at the EU level, as they include a cross-border element(i.e., carbon emissions). In a similar vein, CORE could be regarded as a genuine own resource, as it might be harder to implement at the member state level due to potential avoidance reactions. Moreover, CORE would be paid by corporations instead out of member states’ budgets. TEDOR and the e-waste-based own resource, on the other hand, would constitute purely national contributions paid out of member states’ budgets, which would therefore not enhance the EU’s fiscal autonomy. The proposed new own resources differ markedly regarding their revenue potential. At €15 billion per year, estimated revenue is highest for the non-collected e-waste-based own resource. TEDOR(€11.2 billion) and the ETSbased own resource(€9.6 billion) are expected to yield substantially lower revenue. Projected CORE revenue will lie even lower at€6.8 billion annually. Estimated revenues from the CBAMbased own resource are rather negligible, at €1.4 billion per year. While TEDOR revenues are expected to yield rather stable revenues and CORE revenues should grow over time, ETSbased own resource revenues will increase until 2031 to steadily decrease in the years after. 13 In the longer term, own resources based on the EU ETS and the CBAM, as well as TEDOR, could decrease if the policies they are to support are effective. The link to EU policies is strong for own resources based on the EU ETS, the CBAM and non-collected e-waste. These three own resource options are closely related to the EU’s climate and environmental policy. TEDOR is linked to Europe’s Beating Cancer Plan and New own resources for the EU budget 9

the increase in minimum tobacco tax rates the Commission has proposed simultaneously. In contrast, there is no obvious link between EU policies and CORE. The Commission obviously has proposed CORE as a substitute for earlier plans for a digital tax that have not been followed up further to not exacerbate tensions in US-EU relations, but also for other previous proposals for a contribution of the corporate sector. While CORE is intended as the corporate sector’s contribution to EU revenue, its concrete design has several shortcomings. Specifically, it is designed as a tax on turnover and as such does not consider profit margins but has to be paid by loss-making firms as well, so that firms are burdened unevenly. In addition, as lump-sum payments increase step-wise in several brackets according to the level of firm turnover, large firms are favoured in comparison to smaller ones. 14 Moreover, inflation will lead to bracket creep, because Commission plans do not foresee regular adjustment of the brackets to inflation. Quantitative estimates for the distribution of the financial burden of the proposed new own resources across member states are not available. The rough assessment that is undertaken here is based on previous estimations and rough indicators. It can be expected that the regional distribution would differ across the individual own resource options. The ETS-based own resource would burden some emission-intensive Eastern European member states disproportionately. 15 TEDOR would place a disproportionate burden on almost all“new” member states as well, whose shares in tobacco and cigarettes released for consumption are overproportionate compared to their shares in GNI. In contrast, in the face of comparatively high e-waste collection rates in many“new” member states, the e-waste based own resource could burden“old” member states overproportionately. The CBAM-based own resource burdens third countries outside the EU, while member states’ budgets are not affected directly. Of course, ETS and CBAM revenue could be fully assigned to member states as an alternative to transferring it to the EU, insofar as member states’ budgets would be affected indirectly. No estimates are available for the CORE. While the individual own resource proposals would place differing financial burdens on member states and it can be expected that they would cancel out to a certain degree, more in-depth analysis is needed to determine whether, taken together, the new own resources proposed by the Commission would lead to a regionally balanced distribution of the financial burden. At the same time, however, it should be kept in mind that just comparing financial burdens imposed on member states by new own resources with the current situation and/or payments received out of the MFF is far too shortsighted, as member states’ net benefits from the MFF go far beyond monetary flows. 16 All five own resource options proposed by the Commission could be mobilised rather quickly, as their implementation would not require lengthy preparations. Their political feasibility, however, could differ. It can be expected to be highest for the CBAMbased own resource, which burdens EU member states only indirectly: as revenues from CBAM could be assigned to member states’ budgets, channelling them into the EU budget creates an opportunity cost for member states. 17 This opportunity cost would be small, however, so that political opposition to using CBAM revenue as a new own resource can be expected to be low. Moreover, the political legitimacy of using CBAM revenues, as well as ETS revenues, to finance the EU budget is higher compared to the other revenue sources, as they are directly linked to EU competences. For own resources based on ETS revenue and CORE, political feasibility could 10 New own resources for the EU budget

be lower overall compared to the CBAM-based own resource: making a share of ETS revenue available for the EU budget implies a rather significant reduction of ETS revenue flowing to member states. By proposing to allocate only a share of ETS1 revenue to the EU budget, to reserve ETS2 revenue for social compensation and redistribution, the Commission may mitigate member states’ political resistance against using part of the ETS revenue to finance the EU budget. Also CORE might meet a medium degree of political feasibility: on one hand, member states may object to additional taxes on multinational firms for fear of a deterioration of international competitiveness; on the other hand, the CORE does not burden member states’ budgets directly. For TEDOR and the e-wastebased own resources, political feasibility could be lowest, as they would have to paid out of member states’ budgets. Table 1 provides an overview of the brief assessment of the Commission proposals undertaken above. Table 1. Recent Commission proposals for new own resources. Proposed new own resource ETS-based own resource CBAM-based own resource Estimated annual revenue, in billion€ Regional distribution Link to EU policies Disproportionate burden on some 9.6 emission-intensive Strong Eastern European member states 1.4 None Strong Political feasibility/ speed of mobilisation Medium/high High/high Non-collected e-waste-based own resource TEDOR Disproportionate 15 burden on“old“ Strong member states Disproportionate 11.2 burden on“new“ Strong member states Low/high Low/high CORE 6.8 n.a. Weak Medium/high Source: author’s own elaboration. New own resources for the EU budget 11

4. Proposals by the European Parliament In its resolution“A new start for EU finances, a new start for Europe”, the European Parliament 18 puts forward a number of own resource candidates. Several of the options mentioned in the parliament’s resolution were proposed and discussed earlier, particularly as part of the IIA adopted in 2020(see Box 1): specifically, an own resource based on corporate taxation, namely, the“Business in Europe: Framework for income taxation(BEFIT)” proposal, that is, a share of an EU-wide consolidated and coordinated corporate tax base; 19 the financial transaction tax; and taxes on the digital economy, that is, a digital levy or similar. In addition, the parliament suggests several new own resources: a tax on cryptocurrencies; an own resource based on a “fair border mechanism”; and several statisticsbased own resources, such as a gender pay gap-based own resource and own resources linked to biowaste or food waste. As concrete design features are missing for all own resource options mentioned by the parliament, their revenue potential cannot be assessed here. Statistical own resources, that is, own resources based on the gender pay gap, biowaste and food waste, could be mobilised rather quickly. In contrast, fast mobilisation appears difficult for own resources based on BEFIT; a fair border mechanism; and taxes on financial transactions, cryptocurrencies and the digital economy. For some of these options, the details and technicalities would require further discussion and elaboration(in particular, own resources based on a fair border mechanism or BEFIT or a tax on cryptocurrencies), others are politically contentious and may meet with some resistance from at least some member states (e.g., the financial transaction tax or taxes on the digital economy). 5. A two-pronged strategy for the introduction of new own resources A strategy for the introduction of new own resources could rest on two pillars. The first pillar could consist of the implementation – with some modifications – of the recent Commission proposal with the upcoming MFF 2028-2034. The second pillar could be based on the implementation of further new own resources with the post-2034 MFF. Generally, the EU should move towards “genuine” own resources based on common EU tax policies. 20 Statistical own resources paid out of member states’ budgets(like the existing plastic-based or proposed e-waste-based own resource) have the advantage that, in most cases, they can be mobilised quickly, and they may also have steering effects. However, as national contributions, they still further member states’ net-position thinking. The way forward therefore should strongly rest on tax-based own resources, that is, own resources based on taxes that cannot be enforced effectively at the national level due to leakages and cross-border effects(e.g., carbon emissions). 21 In addition, a modern EU revenue system should rely on a diverse basket of new own resources to ensure a fair distribution of the overall financial burden across member states and different sectors and to offset net-balance concerns member states may have. 5.1 New own resources for the MFF 2028-2034 The upcoming negotiations on the MFF 2028-2034, in principle, should focus on the Commission proposals, whereby some modifications might be considered. Firstly, the ETS-based own resource could be extended to the ETS2 to be introduced in 2027, and the share of 30% currently envisaged to flow into the EU budget could be substantially increased 12 New own resources for the EU budget

– it could be even considered, following Darvas et al., 22 that member states keep only a rather limited share covering collection costs only. Secondly, the share of 75% of CBAM revenue that, according to Commission plans, shall be directed to the EU budget could be increased to 90%, thus adjusting the share going to member states to cover collection costs to their future share of 10% in custom revenue suggested by the Commission. Moreover, the scope of the CBAM should be significantly widened in the future. 23 Increasing the scope of the ETS- and the CBAM-based own resources and raising the share of ETS- and CBAM-based own resources flowing to the EU would significantly expand EU revenues, and thus, contribute to an expansion of the overall volume of the EU budget. Thirdly, an own resource from the corporate sector is justified to make the sector contribute to the financing of the EU budget. As mentioned above, the CORE proposed by the Commission is characterised by several shortcomings. This brings up the question of a well-designed contribution of the corporate sector. The best solution would be a BEFIT-based own resource based on company profits. This own resource would be closely linked to an important EU policy; it would, to a certain extent, constitute a genuine own resource, and it would represent a dynamic revenue source in the longer term. BEFIT implementation is envisaged for 2028, so that revenue based on BEFIT would be available starting with the upcoming MFF 2028-2034. However, also considering the already decadeold, and finally failed, attempts to coordinate corporate tax bases across EU member states, the prospects for a timely agreement on BEFIT are questionable. Moreover, even with timely implementation in 2028, a transitional period is foreseen until 2035, which implies that revenue from a BEFIT-based own resource will only be available with considerable delay. Proposals to implement an excess profit tax, which according to Dubinina et al. could yield$6 billion at a rate of 10%, 24 could be interpreted as an alternative way to make the corporate sector contribute to EU revenue. However, excess profit taxes are characterised by various problematic design issues. They focus on specific sectors; this is associated with delineation issues, namely, the question of which specific sectors to subject to taxation. Another challenge is the definition and quantification of excess profits. Moreover, a differentiation between“justified” innovation rents and“unjustified” excess profits that should be subjected to an excess profit tax appears difficult. Excess profits taxes could also create uncertainty among firms and investors, and thus, deteriorate overall investment conditions. In addition, there is the risk that an excess profit tax induces profit shifting to noor low-tax countries to avoid the tax. While all these issues may be surmountable through an adequate design and a restricted scope of the tax, it would not supply stable revenue, since revenue generation would be subject to specific events resulting in extra profits. Altogether, therefore, excess profit taxes appear unsuitable as a general contribution of the corporate sector to the EU budget. A digital services tax has been propagated for some time as another alternative form of corporate sector contribution to the EU budget. According to(probably rather optimistic) estimations by Thomadakis, 25 a digital services tax of 5% could yield€37.5 billion annually. The tax would be more genuine than the current own resources. However, it would be associated with several drawbacks. A digital services tax would primarily burden US tech firms and it could be expected to intensify US-EU tensions. Moreover, it is based on turnover instead of profits, and it may at least partially be shifted to consumers. While a digital services tax could temporarily address tax avoidance by digital New own resources for the EU budget 13

platforms until other internationally coordinated solutions, which are currently on hold, have been implemented, it is not suitable as a general contribution of the corporate sector. As part of its adjusted basket of new own resources launched in June 2023, the Commission had suggested a statistical own resource based on company profits(calculated by applying 0.5% to firms’ gross operating surplus, GOP) as a temporary solution to be applied until the adoption of BEFIT. However, no consensus could be reached on its introduction. CORE can be seen as a renewed push by the Commission towards an administratively simple temporary contribution from the corporate sector. Compared to the proposal of a GOPbased own resource, which would have to be directly paid out of member states’ budgets, CORE is more genuine, as it would have to be paid by corporations. Indeed, a drawback of CORE is that it would entail a marked additional burden for companies operating at low profit margins or making losses: Darvas et al. show that, while a 0.1% tax on turnover would equal a 0.5% profit tax for companies with a profit margin of 20%, 26 it would imply a 5% profit tax for companies with a 2% profit margin. However, considering the problems associated with alternative designs for a contribution from the corporate sector mentioned above, CORE might – as a temporary solution – not be an ideal solution, but rather the politically most feasible. 5.2 New own resources for the post-2034 MFF The second pillar of reforms aimed at establishing a fiscally sustainable EU revenue system are further potential revenue sources on which the post-2034 MFF could rest. From a long-term perspective, the design of the EU revenue system needs to rely on further bases that grow dynamically in the longer term, as own resources based on emissions will eventually lose importance with progress being made in decarbonisation. Several tax-based options could be considered and developed in more detail. All these options refer to taxes than cannot be effectively levied unilaterally, as they cause cross-border avoidance reactions. As such, they would be associated with no or only low opportunity costs for member states, as the respective tax bases cannot or can only insufficiently be exploited unilaterally. The first option is own resources based on the taxation of cryptocurrencies. This option may be seen as a replacement for an EU-wide financial transaction tax, for which – after several unsuccessful initiatives at the EU level to implement the tax in all or a group of member states 27 – current prospects do not seem to be promising. The taxation of cryptocurrencies is a rather new subject in research, 28 and its aims and concrete design need to be specified in more detail. In principle, the taxation of cryptocurrencies could address three problems: the large emission intensity of the mining of cryptocurrencies; 29 the financial and security risks associated with cryptocurrencies; 30 and the substantial evasion of taxes on the profits made with cryptocurrencies. Empirical evidence and country experiences with cryptocurrency taxation are very limited. For Denmark, Boas and Baraké find that cryptocurrency owners change to non-taxed platforms abroad to avoid Danish taxation of gains from cryptocurrencies, 31 which suggests an internationally or at least, in a first step, EU-wide coordinated approach. An EU-wide coordinated net wealth tax could be a second option for tax-based own resources. Several proposals have been put forward during the last decade, 32 which according to simulations could yield considerable revenues. In the EU, there is only one member state – Spain – that still levies a net-wealth tax. Besides other 14 New own resources for the EU budget

issues related to the taxation of net wealth, the fear of legal and illegal capital flight, as well as tax avoidance and evasion, has motivated many governments to abandon the net-wealth tax. A coordinated EU-wide net-wealth tax may contribute to current efforts at the global level to ensure adequate taxation of high-net-wealth individuals. As a third option, own resources based on aviation and shipping could be considered. Despite the extension of the ETS to aviation and shipping, structural undertaxation of the aviation and shipping sectors persists in the EU. Specifically regarding aviation taxes, effective enforcement at the member state level is difficult, and unilateral aviation taxes – which mostly take the form of flight ticket taxes – are constantly under pressure for fear of losing international competitiveness. An EU-wide coordinated implementation of flight ticket taxes could secure effective tax collection and yield substantial revenue. 33 As this option is the least-complex one and could be – based on member states’ experiences – mobilised rather quickly, it could be considered already for the upcoming MFF 2027-2034. long-term challenges the EU is facing. Not least, the implementation of new own resources has been stipulated in the legally binding IIA from 2020 to finance NGEU debt service. A failure to introduce them may undermine the EU’s creditworthiness, thus possibly increasing the cost of future EU borrowing. The introduction of new own resources could rest on a two-pronged strategy: with the MFF 2028-2034, the focus should be on Commission proposals, while further tax-based own resources, which could rest on aviation and shipping, cryptocurrencies, and net wealth, should be prepared for the post2034 MFF. 6. Conclusions The implementation of new own resources should be a priority in the upcoming negotiations on the MFF for 2028 to 2034. New own resources could support important EU goals and strategies; mitigate member states’ net-position thinking; replace part of GNIbased own resources, and thus, allow member states to decrease distorting taxes within a supranational tax shift; generate additional revenue for NGEU debt service, thus avoiding cuts in other MFF spending; and help finance and make politically more acceptable the extension of the EU budget urgently required to finance European public goods needed to cope with the New own resources for the EU budget 15

ENDNOTES 1  Schratzenstaller, M., D. Nerudova, V. Solilova et al.(2022)“New EU own resources: Possibilities and limitations of steering effects and sectoral policy co-benefits”. European Parliament, March. 2  Fuest, C. and J. Pisani-Ferry(2020)“Financing the EU: New context, new responses”. Policy report 24. EconPol; Schratzenstaller, M., D. Nerudova, V. Solilova et al.(2022)“ New EU own resources: Possibilities and limitations of steering effects and sectoral policy co-b enefits”. 3  Nonetheless, also genuine own resources(currently custom revenues) are collected by member states and trans ferred to the EU, as the EU does not have its own collection mechanisms. 4  The dominance of own resources within the EU revenue system is based on the guiding principle anchored in Article 311 TFEU, according to which the EU’s financial obligations are to be covered, in principle, by own resources:“Without prejudice to other revenue, the EU budget shall be financed by own resources”. Useful overviews of the EU system of own resources are provided in Schwarcz, A.(2021)“ Reform of the EU own resources”. European Parliament, March; Schwarcz, A.(2023)“ The Union’s revenue”. Fact Sheets on the European Union- 2023. European Parliament; D’Alfonso, A.(2021)“ Own resources of the European Union: Reforming the EU’s financing system”. Briefing, PE 630.265. European Parliamentary Research Service, June. 5  For details, see: Schratzenstaller, M., P. Heimberger, V. Kubeková et al.(2025)“Other revenue for the EU budget – status quo and potential”. Intereconomics, 5(60): 281-289. DOI: 10.2478/ie-2025-0055 6  Schratzenstaller, M., A. Krenek, D. Nerudová et al.(2017)“EU taxes for the EU budget in the light of sustainability orientation – a survey”. Jahrbücher Für Nationalökonomie Und Statistik, 3(237): 163-189. DOI: 10.1515/jbnst-2017-1106; Schratzenstaller, M., D. Nerudova, V. Solilova et al.(2022)“New EU own resources: Possibilities and limitations of steering effects and sectoral policy co-b enefits”. 7  Schratzenstaller, M., A. Krenek, D. Nerudová et al.(2017)“EU taxes for the EU budget in the light of sustainability orientation – a survey”; Schratzenstaller, M., D. Nerudova, V. Solilova et al.(2022)“ New EU own resources: Possibilities and limitations of steering effects and s ectoral policy co-benefits”. 8  Grund, S. and A. Steinbach(2023)“European Union debt financing: Leeway and barriers from a legal perspective”. Working paper no. 15/2023. Bruegel, 12 September. 9  Thöne, M.(2024)“ European public goods and the 2028-2034 Multiannual Financial Framework: Financing the EU in a decade of reform”. European Parliament, October. 10  Felbermayr, G. and A. Pekanov(2024)“Pan-European public goods: Rationale, financing and governance”. European Parliament, 6 June. 11 “ An adjusted package for the next generation of own resources”. COM(2023) 330 Final. European Commission, 20 June 2023. 12 “Europe’s budget own resources”. European Commission, July 2025;“A dynamic EU budget for the priorities of the future: The Multiannual Financial Framework 2028-2034”. SWD(2025) 570 final/2. European Commission, 16 July 2025; “Proposal for a Council decision on the system of own resources of the European Union and repealing decision(EU, Euratom) 2020/2053”.(COM(2025) 574 final 2025/0574(CNS)). European Commission, 16 July 2025. 13  It should be noted that due to the volatility of auction prices, ETS revenue is hard to predict.“Concerning the proposal for a Decision on the system of own resources of the European Union”. Opinion, no. 04. European Court of Auditors, 2026. 14  Darvas, Z., R. Dom and M.-S. Lappe(2025a)“CORE concerns: Why a turnover-based levy is wrong for the EU budget”. Bruegel, 22 July. 15  Darvas, Z., R. Dom, M.-S. Lappe et al.(2025b)“ Bigger, better funded and focused on public goods: How to revamp the European Union budget”. Blueprint Series 37. Bruegel. 16  Stehrer, R., R. Stöllinger, G. Hunya et al.(2020)“ How EU funds tackle economic divide in the European Union”. European Parliament, July. 17  Darvas et al.(2025b)“Bigger, better funded and focused on public goods: How to revamp the European Union budget” 16 New own resources for the EU budget

18 “Own resources: A new start for EU finances, a new s tart for Europe: European Parliament Resolution of 10 May 2023 on own resources: A new start for EU finances, a new start for Europe(2022/2172(INI))”. European Parliament, 2023. 19  For details, see:“Europe’s budget own resources”. European Commission. 20  Saint-Amans, P.(2024)“ Broader border taxes: A new option for European Union budget resources”. Policy brief, no. 06/2024. Bruegel, 21 March. 21  Schratzenstaller, M., A. Krenek, D. Nerudová et al.(2017)“EU taxes for the EU budget in the light of sustainability orientation – a survey”. 22  Darvas et al.(2025b)“Bigger, better funded and focused on public goods: How to revamp the European Union budget” 23  Ibid 24  Dubinina, E., J. Garcia-Bernardo and P. Janský(2024)“The excess profits during COVID-19 and their tax revenue potential”. Empirica, 4(51): 1001-1036. DOI: 10.1007/s10663-024-09630-2 25  Thomadakis, A.(2025)“Towards a European digital services tax: Renewing the momentum for a fair contribution”. CEPS Centre for European Policy Studies, April. 26  Darvas et al.(2025a)“CORE concerns: Why a turnover-based levy is wrong for the EU b udget”. 27  For a more detailed discussion, see: Pekanov, A. and M. Schratzenstaller(2019)“A global financial transaction tax: Theory, practice and potential revenues”. WIFO Working Papers, 582. 28  Among the very small body of relevant literature are Baer, K., R. A. De Mooij, S. Hebous et al.(2023)“What’s in your wallet? The tax treatment of cryptocurrencies”. Working paper no. 10372. Center for Economic Studies and ifo Institute, April; Boas, H. F. and M. Baraké(2025)“Enforcing taxes on cryptocurrencies”. Working paper no. 29. EU Tax Observatory, 25 April. 29  For example, see: Krause, M. J. and T. Tolaymat(2018)“Quantification of energy and carbon costs for mining cryp tocurrencies”. Nature Sustainability, 11(1): 711-718. DOI: 10.1038/s41893-018-0152-7 30  For example, see: Hansen, P. R., C. Kim and W. Kimbrough(2024)“Periodicity in cryptocurrency volatility and liquid ity”. Journal of Financial Econometrics, 1(22): 224-251. DOI: 10.1093/jjfinec/nbac034 31  Boas, H. F. and M. Baraké(2025)“ Enforcing taxes on cryptocurrencies”. 32  Guschanski, A. and R. Wildauer(2025)“ Can a wealth tax reduce CO 2 emissions in Europe?” Working paper. Centre for Political Economy, Governance, Finance and Accountability(PEGFA). University of Greenwich; Kapeller, J., S. Leitch and R. Wildauer(2023)“Can a European wealth tax close the green investment gap?” Ecological Economics, 209: 107849. DOI: 10.1016/j.ecolecon.2023.107849; Krenek, A. and M. Schratzenstaller(2022)“A harmonized net wealth tax in the European Union”. Jahrbücher Für Nationalökonomie Und Statistik, 5-6(242): 629-668. DOI: 10.1515/jbnst-2021-0045; Landais, C., E. Saez and G. Zucman(2020)“A progressive European wealth tax to fund the European COVID response”, in A. Bénassy-Quéré and B. Weder di Mauro(eds) Europe in the Time of Covid-19(London: CEPR Press), p. 113-118; Piketty, T.(2014) Capital in the Twenty First Century(A. Goldhammer, trans.)(Cambridge, MA: Belknap Press). 33  Krenek, A. and M. Schratzenstaller(2017)“Sustainability-oriented tax-based own resources for the European Un ion: A European carbon-based flight ticket tax”. Empirica, 4(44): 665-686. DOI: 10.1007/s10663-017-9381-7 New own resources for the EU budget 17

ABOUT THE AUTHOR MARGIT SCHRATZENSTALLER Margit Schratzenstaller is Senior Economist at WIFO and has been working in the Research Group“Macroeconomics and Public Finance” since 2003. She is member of the Austrian Fiscal Council. Her areas of expertise include(European) tax and budget policy, EU budget, greening of public finances, wealth taxation as well as family policy and gender budgeting. 18 New own resources for the EU budget

ABOUT THE FOUNDATION FOR EUROPEAN PROGRESSIVE STUDIES(FEPS) FEPS is the European progressive political foundation and the think tank of the progressive political family at EU level. Our mission is to develop innovative research, policy advice, training and debates to inspire and inform progressive politics and policies across Europe. Avenue des Arts 46 1000 Brussels, Belgium info@feps-europe.eu www.feps-europe.eu @FEPS_Europe ABOUT FRIEDRICH-EBERT-STIFTUNG(FES) EUROPEAN UNION& GLOBAL DIALOGUE| BRUSSELS OFFICE The EU Office of the Friedrich-Ebert-Stiftung(FES), with its headquarters in Brussels and activities in Brussels and Strasbourg, was opened in 1973. It participates in the European integration process, backs and accompanies the interests of the Federal Republic of Germany in Europe and contributes to shaping the external relations of the European Union. Rue du Taciturne 38 1000 Brussels(Belgium) Brussels@fes.de https://brussels.fes.de/ @FES_Europa ABOUT THE AUSTRIAN INSTITUTE OF ECONOMIC RESEARCH(WIFO) The Austrian Institute of Economic Research(WIFO) is a non-profit, independent, non-university research institute and has been Austria’s leading institute for applied empirical economic research for almost 100 years. Arsenal, Objekt 20 1030, Vienna(Austria) Office@wifo.ac.at www.wifo.ac.at @WIFOat New own resources for the EU budget 19

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