Seán Fleming (Laois-Offaly, Fianna Fail)
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27. To ask the Minister for Finance the discussions his Department has had with the EU on Ireland’s budget contribution; if the additional contribution that is being asked of Ireland is based on consistent calculations across all EU states; the extent to which the additional contribution reflects a restatement of gross national income to reflect the value of research and development and certain previously excluded illegal activities; and if he will make a statement on the matter. [41757/14]

Michael Noonan (Limerick City, Fine Gael)
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Ireland's contribution to the EU Budget is an obligation of EU membership and is a charge on the Central Fund under national legislation. The contribution formula for the EU Budget is comprised of Traditional Own Resources (customs duties), a VAT-based payment and a balancing component paid in accordance with each Member State's (MS) share of EU Gross National Income (GNI).

Annually, a technical rebalancing exercise is carried out whereby updated Member State GNI and VAT data is used to retrospectively adjust preceding years' budget contributions. The updated data is agreed with the relevant national authorities, including the CSO and the Revenue Commissioners in Ireland. These balancing payments are called up for automatic payment, in accordance with the relevant legislation, on 1 December every year.

In parallel with this, the Commission has proposed Draft Amending Budget 6 (DAB 6) which includes a technical redistribution of these balancing payments across MS. The net impact of these two exercises is an estimated additional contribution of €6.5m for Ireland. It should be noted that, whereas the payment under the technical balancing exercise is automatic, DAB 6 must be agreed by both Council (QMV) and Parliament. Separately, DAB 6 also updates the forecast for MS customs duties in 2014 to reflect current revenue developments. For Ireland, this involves a separate increase of €6m in our customs duties payment.

In relation to the change in the treatment of research and development in the national accounts, this was introduced as part of the new ESA 2010 statistical standards. However, MS GNI based contributions will be calculated on the basis of the earlier ESA 1995 standards until the new Council own resource decision is adopted (likely to be in 2016).  As such, Ireland's additional contribution under the rebalancing exercise is unrelated to the change to ESA 2010.

Inclusion of certain previously excluded illegal activities are part of the ESA 1995 framework. However, as illegal economic activity accounts for less than 1% of Irish GDP, the impact on our EU budget contribution is negligible.