C-3/86 Commission v Italy

Judgment of the Court of 28 June 1988. - Commission of the European Communities v Italian Republic. - Failure of a Member State to fulfil its obligations - Sixth VAT Directive, Article 25 (3) and (5) - Flat-rate compensation scheme for beef, pork and milk. - Case 3/86. European Court reports 1988 Page 03369

Summary Parties Grounds Decision on costs Operative part

Tax provisions - Harmonization of laws - Turnover tax - Common system of value-added tax - Flat-rate scheme for farmers - Application of flat-rate compensation percentages to supplies of goods and services made to recipients themselves subject to the flat-rate scheme or to non-taxable persons - Not permissible .

( Council Directive 77/388, Art . 25 ⁵ and ⁸ )

The effect of Article 25 ⁵ and ⁸ of the Sixth Council Directive ( 77/388/EEC ) on the harmonization of the laws of the Member States relating to turnover taxes is that, in the context of the flat-rate scheme for farmers, the flat-rate compensation percentages provided for in Article 25 ³ should not be applied when goods or services are supplied by a farmer subject to the flat-rate scheme to a farmer to whom the same scheme applies or to a non-taxable person . In such cases compensation for the value-added charge on inputs is obtained by the payment of an all-in price for those goods or services which is deemed to include that charge; thus the invoicing of the flat-rate amount would serve no useful purpose since the buyer and the recipient of the service would be unable to deduct the input tax .

In Case 3/86

Commission of the European Communities, represented by Johannes Foens Buhl, Legal Adviser to the Commission, and Guido Berardis, a member of its Legal Department, acting as Agents, with an address for service in Luxembourg at the office of G . Kremlis, a member of the Commission' s Legal Department, Jean Monnet Building, Kirchberg,

applicant,

Italian Republic, represented by Ivo M . Braguglia, avvocato dello Stato, with an address for service in Luxembourg at the Italian Embassy,

defendant,

APPLICATION for a declaration that the Italian Republic has failed to fulfil its obligations under Community provisions and, in particular, Article 25 ³ and ⁵ of the Sixth Council Directive 77/388/EEC, of 17 May 1977, on the harmonization of the laws of the Member States relating to turnover taxes - Common system of value-added tax : uniform basis of assessment ( Official Journal 1977, L 145, p . 1 ),

THE COURT

composed of : Lord Mackenzie Stuart, President, G . Bosco, J . C . Moitinho de Almeida and G . C . Rodríguez Iglesias, Presidents of Chambers, T . Koopmans, U . Everling, Y . Galmot, C . Kakouris and F . Schockweiler, Judges,

Advocate General : C . O . Lenz

Registrar : B . Pastor, Administrator

having regard to the Report for the Hearing and further to the hearing on 13 January 1988,

after hearing the Opinion of the Advocate General delivered at the sitting on 24 February 1988,

gives the following

Judgment

Grounds

1By application lodged at the Court Registry on 9 January 1986, the Commission of the European Communities brought an action under Article 169 of the EEC Treaty for a declaration that, by introducing and maintaining in force a flat-rate scheme which is incompatible with Article 25 3 ) and ⁵ of the Sixth Directive ( Council Directive 77/388/EEC of 17 May 1977, Official Journal 1977, L 145, p . 1 ) as regards the unlimited nature of that scheme and the rate of value-added tax ( VAT ) refunds paid to producers of beef, pork and unconcentrated and unsweetened fresh milk, the Italian Republic has failed to fulfil its obligations under the EEC Treaty and the Sixth Directive .

2Acting pursuant to Article 34 of Decree No 633 of the President of the Republic of 26 October 1972 introducing value-added tax ( Official Journal of the Italian Republic No 292, 11.11.1972 ), Italy established a flat-rate scheme for farmers . In the context of this scheme, the legislature made use of the possibility provided for in Article 25 ³ of the Sixth Directive by laying down a series of flat-rate compensation percentages, which varied according to the different subdivisions of agriculture and groups of products . By a Ministerial Decree of 25 February 1983 ( Official Journal of the Italian Republic No 58, 1.3.1983 ), the flat-rate percentage was set at 14%, with effect from 1 March 1983 for beef and pork as well as for unconcentrated and unsweetened fresh milk . That percentage represented a reduction in the rate of 15% previously applied to those categories of products under Law No 889 of 22 December 1980 ( Ministerial Decree of 5 January 1981 ).

3The Commission claims that the Italian Republic has failed to comply with its obligations in three respects : by the use, in fixing the flat-rate compensation percentages, of statistics relating to agriculture as a whole, whereas Article 25 ³ of the Sixth Directive provides that such percentages are to be based on macro-economic statistics for flat-rate farmers alone; by the incorporation in the flat-rate scheme in question of the supply of goods and services to flat-rate farmers, whereas, under Article 25 ⁵ of the Sixth Directive, the flat-rate compensation percentages must be applied only to goods and services which flat-rate farmers have supplied to taxable persons other than flat-rate farmers; and by fixing at too high a level the compensation percentages for beef, pork and milk, which has the effect of affording flat-rate farmers refunds greater than the VAT charged on inputs .

4Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the course of the procedure and the submissions and arguments of the parties, which are mentioned hereinafter only in so far as is necessary for the reasoning of the Court .

5It should be observed at the outset that the complaint that account was taken of macro-economic statistics relating to the whole of agriculture for determining the flat-rate compensation percentages payable to producers of beef, pork and fresh milk is subsumed in the complaint that those percentages were set at too high a level . The Commission alleges that the defendant fixed the percentages in question first at 15%, then at 14%, whereas, having regard to the statistics mentioned in Article 25 ³ of the Sixth Directive, they should have been fixed at around 7 %.

The complaint that the flat-rate compensation percentages for beef, pork and fresh milk were set at too high a level

6In setting the flat-rate compensation percentage at 14%, the defendant stated that it based itself on macro-economic statistics relating to the whole of agriculture but was obliged to correct them so as to take account of the specific structure of the Italian stock-farming sector . It pointed out that the large number of small farms carrying on both stock rearing and arable farming use means of production whose high costs are not always perceptible in statistical surveys but nevertheless entail considerable VAT input charges . It also stated that if the aforesaid percentages had represented for flat-rate farmers a rate of refund higher than the VAT charges on inputs, they would necessarily have brought about an increase in relevant production, whereas the contrary is evidenced both by the steady and progressive reduction in the rate of self-sufficiency recorded in Italy as regards the products in question and by the increase in imports .

7The first subparagraph of Article 25 ³ of the Sixth Directive provides that "Member States shall fix the flat-rate compensation percentages, where necessary, and shall notify the Commission before applying them . Such percentages shall be based on macro-economic statistics for flat-rate farmers alone for the preceding three years . They may not be used to obtain for flat-rate farmers refunds greater than the value-added tax charges on inputs . Member States shall have the option of reducing such percentages to a nil rate . The percentage may be rounded up or down to the nearest half point ." The second subparagraph of Article 25 ³ provides "Member States may fix varying flat-rate compensation percentages for forestry, for the different subdivisions of agriculture and for fisheries ".

8The macro-economic statistics relating to flat-rate farmers alone, to which the aforementioned provision refers, comprise inputs ( intermediate consumption and gross fixed-asset formation ) and outputs, ( final production, including own consumption ), together with the total amount of taxes relating to inputs . The flat-rate compensation percentages are obtained by dividing the latter amount by outputs .

9In this connection, it should be noted that, at the Court' s request, the defendant produced macro-economic statistics relating solely to flat-rate farmers in the sectors in question in respect of the years 1978, 1979 and 1980, on the basis of which, pursuant to Article 25 ³ of the Sixth Directive, the flat-rate compensation percentages have to be determined .

10The Court must therefore assess whether or not the flat-rate compensation percentages fixed by the Italian Republic since 1981 in respect of the beef, pork and fresh milk sectors are higher than those which ought to have been fixed on the basis of the aforementioned statistics .

11On the basis of the macro-economic statistics relating to flat-rate farmers alone, supplied by the Italian Government, and applying the abovementioned method of calculation of flat-rate compensation, which is the same as that laid down for the calculation of own resources ( Article 25 ¹² of the Sixth Directive ), the Commission obtained for the years 1978, 1979 and 1980, compensation percentages whose average is clearly lower than those fixed since 1981 for the sectors in question by the Italian Government .

12It is true that, in accordance with Article 25 ³ of the Sixth Directive the aforementioned macro-economic statistics could only form the basis for calculating flat-rate compensation percentages for the year 1981 . However, there is no reason to suppose, and this has not been argued by the Italian Government, that the situation in Italy of farmers benefiting from the flat-rate scheme in the sectors in question changed in subsequent years in such a way as to provide justification for the flat-rate compensation percentages such as those in issue in this case .

13The argument relied on by the defendant that it was necessary to make certain corrections to the statistics on the ground that they do not reveal the real costs of production of flat-rate farmers, cannot be accepted . No document has been submitted to the Court that might justify such corrections on the basis of concrete statistics .

14It is true that Italian production in the sectors in question has not increased but this finding is not such as to show that the defendant fixed the flat-rate compensation percentages correctly . The possibility cannot be ruled out that excessive compensation percentages, representing, in reality, aid to the sectors in question, have the effect of preventing a fall in production .

15Finally, if, as the defendant argues, the rate of self-sufficiency has not increased, that cannot necessarily be ascribed to the neutral effect of the compensation but may be attributable to other factors such as an increase in consumption .

16It follows that, by fixing at 15% and then at 14% the flat-rate compensation percentages for the beef, pork and unconcentrated and unsweetened fresh milk sectors with effect from 1981 and 1983 respectively, the Italian Republic has failed to fulfil its obligations under Article 25 ³ of the Sixth Directive .

The complaint relating to the application of flat-rate compensation percentages to supplies of goods and services to flat-rate farmers

17The applicant claims that Article 34 of Presidential Decree No 633 is contrary to Article 25 ⁵ of the Sixth Directive, inasmuch as it provides that the flat-rate compensation percentages are also applicable to the supply of goods and services to flat-rate farmers .

18According to the defendant, paragraphs 5 and 8 of Article 25 of the Sixth Directive do not preclude the application of the flat-rate compensation percentages to the supply of goods and services to flat-rate farmers; all that they rule out is that in such cases the compensation be paid by the public authorities under Article 25 ⁶.

19It must be stated that such an interpretation of Article 25 ⁵ and ⁸ of the Sixth Directive is incompatible with the letter and the spirit of those provisions .

20Article 25 ⁵ states clearly that : "The flat-rate percentages provided for in paragraph 3 shall be applied to the price, exclusive of tax, of the agricultural products and agricultural services supplied by the flat-rate farmers to taxable persons other than a flat-rate farmer . This compensation shall exclude all other forms of deduction ". Article 25 ⁸ provides that : "As regards all supplies of agricultural products and agricultural services other than those covered by paragraph 5, the flat-rate compensation is deemed to be paid by the purchaser or customer ".

21The effect of those provisions taken together is that, when goods or services are supplied to flat-rate farmers or to non-taxable persons, the flat-rate compensation percentages should not be applied . In such cases compensation for the value-added tax charge on inputs is obtained by the payment of an all-in price for those goods or services which is deemed to include that charge . The invoicing of the flat-rate amount would in those circumstances serve no useful purpose since the buyer or the recipient of the service would be unable to deduct the input tax .

22It follows that, by providing for the application of the flat-rate compensation percentages to the supply of goods and services to flat-rate farmers, the Italian Republic has failed to fulfil its obligations under the Treaty and Article 25 ⁵ and ⁸ of the Sixth Directive .

Costs

Costs

23Under Article 69 ² of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs . Since the Italian Republic has failed in its submissions, it must be ordered to pay the costs .

Operative part

On those grounds,

THE COURT

hereby :

¹ Declares that, in the context of value-added tax and the flat-rate scheme for farmers, the Italian Republic, by fixing at 15% and then at 14% the flat-rate compensation percentages for the beef, pork and unconcentrated and unsweetened fresh milk sectors with effect from 1981 and 1983 respectively and by providing for the application of the flat-rate compensation percentages to the supply of goods and services to flat-rate farmers, has failed to fulfil its obligations under the Treaty and Article 25 ³, ⁵ and ⁸ of the Sixth Council Directive 77/388/EEC of 17 May 1977;

Signatures

² Orders the Italian Republic to pay the costs .

OPINION OF MR ADVOCATE GENERAL LENZ delivered on 24 February 1988 * Mr President, Members of the Court,

A — The facts

1The proceedings under Article 169 on which I today give my opinion relate to the question whether the Italian Republic, the defendant, correctly applied a specific value-added tax scheme intended for certain farmers.

2Article 25 of the Sixth Directive on value-added tax 1 (the 'Sixth Directive') gives Member States the power to apply a specific regime to farmers in respect of whom the operation of the normal value-added tax scheme or, where appropriate, the simplified scheme, would encounter difficulties. The farmers concerned, referred to in the Sixth Directive as 'flat-rate farmers', receive, pursuant to Article 25 (1), (3) and (6), flat-rate compensation for the value-added tax charged on goods and services supplied to them, which is paid either by the taxable person to whom they supply goods or services, or by the public authorities.

3In order to implement this scheme, Member States fix, where necessary, the

* Translated from the German.

flat-rate compensation percentages which are applied to the price of the agricultural products and agricultural services supplied by the flat-rate farmers to taxable persons other than a flat-rate farmer. This compensation excludes all other forms of deduction of input tax. The flat-rate compensation percentages are based on the macroeconomic statistics for flat-rate farmers alone for the preceding three years. They may not have the effect of obtaining for flat-rate farmers refunds greater than the value-added tax charges on inputs. Member States must notify the Commission of the flat-rate compensation percentages before applying them.

4The general flat-rate scheme for farmers introduced in Italy in 1979 by Article 34 of Decree No 633 of the President of the Republic of 26 October 1972 instituting value-added tax in order in particular to give effect to the Sixth Directive, applies to all goods and services. It does not therefore include the restriction contained in Article 25 (5) of the Sixth Directive which authorizes the flat-rate scheme only for goods and services supplied to taxable persons other than flat-rate farmers. Flat-rate compensation amounts were also introduced in 1979.

5When these flat-rate compensation percentages were increased in 1981 in respect of the products in question, namely beef, pork and fresh milk, the Commission of the European Communities objected to the fact that the Italian scheme included supplies made by flat-rate farmers to other flat-rate farmers. It also informed Italy that it considered the compensation rate of 15% 2to be too high. Finally, it challenged the method of calculation used in order to determine the Italian compensation rates, as it did not cover the requisite period of three years and used macro-economic statistics relating to the whole of Italian agriculture and not to flat-rate farmers alone, as required by the Sixth Directive. Those complaints were repeated in the reasoned opinion of 25 March 1985.

6The defendant did not formally state its position within the period laid down by the applicant in the reasoned opinion, or before this action was brought.

7Within the framework of checking procedures relating to the collection of the Communities' own resources, whereby the transactions carried out by flat-rate farmers must be taken 'into consideration under Article 5 of Council Regulation No 2892/77 of 19 December 1977, 3 the Italian authorities acknowledged that the flat-rate compensation had entailed, in respect of the years 1979 to 1982, over-compensation of the value-added tax charged on inputs.

8The applicant claims that the Court should:

Declare that, by introducing and maintaining in force a flat-rate scheme which is

3388 incompatible with Article 25 (3) and (5) of the Sixth Directive, Council Directive 77/388/EEC of 17 May 1977, as regards its unlimited nature and the percentages of value-added tax refunds paid to producers in respect of beef, pork and fresh milk, the Italian Republic has failed to fulfil its obligations under the EEC Treaty and the Sixth Directive;

Order the defendant to pay the costs.

9The defendant submits that the action should be dismissed and the applicant ordered to pay the costs.

10The defendant maintains that Article 25 (8) of the Sixth Directive authorizes the Italian flat-rate compensation scheme to be applied over and above the terms of Article 25 (5) thereof. It considers that the level of flat-rate compensation percentages is justified. It bases them on the macroeconomic statistics for the whole of Italian agriculture, which must, however, be corrected to take account of the specific situation of flat-rate farmers. It rejects a number of allegations which, as the applicant only made them in its reasoned opinion and in the application, but not in its letter of formal notice, are said to be inadmissible.

11At the Court's request, the parties gave further information. In particular, the defendant produced the following macroeconomic statistics relating to flat-rate farmers alone concerning final production and value-added tax charged on inputs: For the years 1978 to 1980 the final production (in million lire) reached 5 193 200, 6 092 400 and 7 129 300 respectively, and the VAT on inputs (in million lire) reached 329 500, 423 600 and 537 300 respectively. Comparing the value-added tax charged on inputs with the equivalent final production, one arrives at the figures of 6.34, 6.95 and 7.54% respectively.

12I will revert to the other arguments of the parties when necessary during the course of this opinion. It should, however, be stated that a large number of the questions raised, in particular as regards indirect evidence of over-compensation of the value-added tax charged on inputs, have been dealt with thanks to the information provided by the defendant at the Court's request. For the rest, I refer to the Report for the Hearing.

B — Analysis

13The applicant is thus alleging that the defendant has failed to comply with the Sixth Directive and hence with its obligations under the EEC Treaty in three respects :

the flat-rate compensation percentages are based on erroneous statistics since they are derived from macro-economic statistics relating to the whole of agriculture and not to statistics calculated in respect of flat-rate farmers alone;

the sphere of application of the flat-rate scheme in question is too wide because it also includes goods and services supplied to flat-rate farmers;

the flat-rate compensation percentages for beef, pork and fresh milk are excessively high.

1. The macro-economic statistics used

14The defendant does not dispute that it used macro-economic statistics relating to the whole of agriculture and did not confine the statistics to figures relating to flat-rate farmers. After seeking initially to justify its position by pointing to the unavailability of appropriate statistics relating to flat-rate farmers alone, it did however produce, at the Court's request, the macro-economic statistics for flat-rate farmers envisaged in the Sixth Directive.

15The applicant's complaint is therefore well founded.

2. The sphere of application of the flat-rate scheme

16It is not disputed that the defendant's flat-rate scheme goes beyond the flat-rate scheme provided for in Article 25 (5) of the Sixth Directive, as it is also applicable to goods and services supplied to flat-rate farmers. The question arises therefore whether the scheme provided for in Article 25 (5) is exhaustive, or whether an extension of the flat-rate scheme may be justified under Article 25 (6), (7) and (8).

17Under Article 25 (8) of the Directive, the flat-rate compensation for all supplies of agricultural products and agricultural services other than those covered by Article 25 (5), is deemed to be paid by the purchaser or customer. The terms used do not enable this deeming provision to be clearly understood, as is demonstrated by the fact that the applicant interpreted them differently in the reasoned opinion and the application, on the one hand, and in the reply, on the other. It first argued that Article 25 (8) applied only to cases where the flat-rate scheme was permissible but ended up by arguing that this provision applied to situations unrelated to the flat-rate scheme. In the case of goods or services supplied to other flat-rate farmers or to non-taxable persons, it was not necessary to apply the flat-rate compensation percentages since, under Article 25 (8) of the Sixth Directive, payment of the compensation is deemed to be made in the payment by the purchaser of a global price. As such purchasers are not taxable persons, it would be superfluous to charge them a flat-rate amount, as they would not be able to deduct the tax paid on inputs.

18This argument of the applicant seems to me to be convincing, especially as it is confirmed by another line of reasoning. As, under the terms of the seventh subparagraph of Article 25 (2), the flat-rate compensation percentages are fixed by Member States in such a way as to enable flat-rate farmers in the case specified in Article 25 (5) to benefit from flat-rate compensation for the value-added tax charged on inputs, there is no further scope for the application of flat-rate compensation percentages, since otherwise there would be over-compensation of the value-added tax charged on inputs. That is, however, not permitted by Article 25 (3) of the Sixth Directive.

3390

19It should therefore be held that the application of the flat-rate scheme cannot go beyond the cases mentioned in Article 25 (5) of the Directive. The applicant's complaint that the defendant's flat-rate scheme infringes this principle is therefore well founded.

3. The amount of the flat-rate compensation percentages for beef, pork and fresh milk

20The applicant alleges that the defendant fixed flat-rate compensation percentages which were too high, thereby over-compensating for the value-added tax charged on inputs and granting to flat-rate farmers a subsidy contravening Article 25 (3) of the Sixth Directive.

21As the defendant undeniably did not adhere to the method of calculation indicated in Article 25 (3) of the Sixth Directive for fixing the flat-rate compensation percentages on the ground that macro-economic statistics relating to flat-rate farmers alone for the three preceding years were not available, the applicant was only indirectly able to form an idea of the amount of such percentages which was actually justified. Thus, the applicant came to the overall conclusion that flat-rate compensation of only 7% was justified rather than 14%.

22The defendant sought to justify the amount of the flat-rate compensation percentage by the fact that, in the first place, the macro-economic statistics for the whole of the agricultural sector in question had to be corrected by reason of the specific structure of flat-rate farming, consisting of small farms and family businesses. It also relied in particular at the hearing, on Italy's low rate of self-sufficiency as regards the products in question and the difficult economic situation of the farmers concerned.

23Although it is not for the Court in these proceedings to calculate the correct amount of the flat-rate compensation percentage, it does seem to be necessary to determine its amount in a sufficiently reliable manner in order to be able to assess whether the percentage applied by the defendant is in fact too high.

24As the defendant has produced, at the Court's request, additional figures, which are not, however, entirely exhaustive, it is no longer necessary to assess the indirect evidence adduced by the applicant, or even to consider the defendant's argument to the effect that certain evidence adduced by the applicant was inadmissible because it was not contained in the applicant's letter of formal notice.

25Examination of the at first sight somewhat complicated scheme resulting from the combination of Article 25 and Annex C of the Sixth Directive reveals that the purpose and technique of the method of calculation originate from the following considerations.

26The aim of the scheme is to compensate all flat-rate farmers for the value-added tax which they have paid on goods and services purchased by them for their holdings in so far as this tax would be deductible under Article 17 of the Sixth Directive by a farmer subject to the normal value-added tax scheme. Such compensation is paid in accordance with the method opted for by the defendant under Article 26 (6) (a) of the Sixth Directive in such a way that the flat-rate farmer, when he supplies the goods and services mentioned in Article 25 (5) of the directive, invoices to the buyer the flat-rate compensation percentage fixed by the State and keeps it for his own account. The purchaser is then entitled to deduct the flat-rate compensation paid to flat-rate farmers as an input tax, when he pays his own value-added tax.

27Since the flat-rate compensation is designed to neutralize the value-added tax charged on inputs and must be operated on the basis of the transactions referred to in Article 25 (5), only two statistics are decisive in calculating the correct flat-rate compensation percentage: The total amount of value-added tax charged on inputs and the sum total of the transactions referred to in Article 25 (5) of the Sixth Directive.

28But a difficulty may arise in the context of the application of this method of calculation which is connected with the information which the defendant has given at the Court's request. It was asked to produce macro-statistics of flat-rate farmers in the sector concerned. It supplied information relating to inputs and outputs, but for final production it gave the same figures as for outputs. It has provided no additional information as to whether, and if so in what amount, transactions were carried out which do not fall within Article 25 (5) of the Sixth Directive. In the calculation to be carried out in this respect, any transactions not flat-rate compensation for those years is falling within Article 25 (5) must conse6.34, 6.95 and 7.54% respectively or, quently be left out of account, particularly weighted over the three years, 7.007%. as the defendant has not challenged this method of calculation which the applicant 30. It may be that these percentages are also used in its observations on the slightly too low, if there exist transactions defendant's replies. not mentioned by the defendant which do not fall within Article 25 (5) of the Sixth Directive. However, the flat-rate compen

29If the statistics on outputs supplied by sation fixed by the defendant at 14% is the defendant for the years 1978, 1979 and clearly too high in relation to the figures 1980 are now compared with the overall calculated. The applicant's submissions on value-added tax charged on inputs, the this point too are, therefore, well founded.

C — Conclusions

31Consequently, I suggest that the Court's decision should be as follows:

(1) By establishing and maintaining in force for flat-rate farmers, a flat-rate scheme whose sphere of application is too wide and whose flat-rate compensation percentage is too high for beef, pork and fresh milk in contravention of Article 25 (3) and (5) of the Sixth Council Directive (77/388/EEC of 17 May 1977) the Italian Republic has failed to fulfil its obligations under the EEC Treaty.

(2) The Italian Republic should bear the costs.

Notes

(1) Sixth Council Directive (77/388/EEC) of 17 May 1977 on the harmonization of the laws of the Member States relating to turnover taxes — Common system of value-added tax; uniform basis of assessment (OJ L 145,

(13) .6.1977, p. 1).

(2) It was however reduced to 14% by Ministerial Decree of

(25) February 1983.

(3) Council Regulation No 2892/77 of 19 December 1977 implementing in respect of own resources accruing from value-added tax the Decision of 21 April 1970 on the replacement of financial contributions from Member States by the Communities' own resources (OJ L 336, 27.12.1977, p. 8).