WIREDGOV

"I am very pleased that today the Council has given its final agreement to measures that will significantly simplify the preparation of annual accounts for more than 5 million of Europe's smallest companies - so-called "micro-entities". These reductions in "red tape" will free up micro-entities' resources so they can be invested in growing their businesses and deliver the growth that Europe needs to exit the crisis. This agreement shows the EU is committed to reducing regulatory burdens.

I also look forward to the Council and Parliament swiftly agreeing the Commission's proposal from October last year that amends the Accounting Directives (78/660/EEC and 83/349/EEC) that aim to reduce burdens for all SMEs."

Background:

In 2009, the European Commission tabled a proposal to reduce burdensome accounting rules for Europe's smallest companies (IP/09/328) – so-called "micro entities". With this final agreement of the Council, it will be possible for Member States to radically simplify the way in which micro-entities prepare their accounts. When it comes to publishing accounts, governments will be able to create a "one-stop-shop" which would see micro-entities only having to send their accounts to the tax administration, which would in turn be responsible for passing the accounts onto the Company Registry. Until now, in many countries micro-entities have to file a full set of financial statements, including the balance sheet and profit and loss account, and are required to disclose this through publication in a national gazette.

The simplifications will result in potential savings of up to €3.5 billion Euros annually for micro-entities.

The agreement is a major step in completing the Single Market Act¹. It also honours commitments made in the Commission's better regulation and simplification programme, and contributes to the Commission's 2020 growth strategy. In October 2011, the Commission launched further proposals to also simplify accounting rules for small and medium companies, with potential cost savings up to €1.7 billion per year (see IP/11/1238).

More information:

http://ec.europa.eu/internal_market/accounting/sme_accounting/index_en.htm

http://ec.europa.eu/internal_market/smact/docs/20110413-communication_en.pdf#page=2