Taxes on production and imports paid to the Institutions of the European Union

4.25 The taxes on production and imports paid to the Institutions of the European Union include, in particular:

1. taxes paid directly by resident producer units to the Institutions of the European Union (the ECSC levy on mining and iron and steel producing enterprises);
2. taxes collected by national governments on behalf of the Institutions of the European Union, namely:
   (1) receipts from the common agricultural policy:
   levies on imported agricultural products, monetary compensatory amounts levied on exports and imports, sugar production levies and the tax on isoglucose, co-responsibility taxes on milk and cereals;
   (2) receipts from trade with third countries: customs duties levied on the basis of the Integrated Tariff of the European Union (TARIC);
   (3) receipts from VAT in each Member State.

4.27 However, some economic activities, transactions or events, which under tax legislation ought to impose on the units concerned the obligation to pay taxes, permanently escape the attention of the tax authorities. It would be unrealistic to assume that such activities, transactions or events give rise to financial assets or liabilities in the form of payables or receivables. For this reason, the amounts to be recorded in the system are determined by the amounts due for payment only when evidenced by tax assessments, declarations or other instruments which create liabilities in the form of clear obligations to pay on the part of taxpayers. The system does not impute missing taxes not evidenced by tax assessments.

Taxes recorded in the accounts may be derived from two sources: amounts evidenced by assessments and declarations or cash receipts.

(a) If assessments and declarations are used, the amounts shall be adjusted by a coefficient reflecting assessed and declared amounts never collected. As an alternative treatment, a capital transfer, to the relevant sectors could be recorded equal to the same adjustment. The coefficients shall be estimated on the basis of past experience and current expectations in respect of assessed and declared amounts never collected. They shall be specific to different types of taxes.

(b) If cash receipts are used, they shall be time-adjusted so that the cash is attributed when the activity took place to generate the tax liability. This adjustment may be based on the average time difference between the activity and cash tax receipt.

4.28 The total value of the taxes which should be recorded includes any interest charged on arrears of taxes due and any fines imposed by taxation authorities if it is impossible to record such interest and fines separately from taxes; it also includes any charges which may be imposed in connection with the collection or recovery of taxes outstanding. Correspondingly, it is reduced by the amount of any tax rebates made by general government as a matter of economic policy and any tax refunds made as a result of over-payments.

4.29 In the system of accounts, taxes on production and imports (D.2) appear:

1. among uses in the generation of income account of the total economy;
2. among resources in the allocation of primary income account of the general government sector and in the external account of primary incomes and current transfers.

Other taxes on production (D.29) appear among uses in the generation of income accounts of the industries or sectors which pay them.