EU Small Businesses Celebrate EP Decision to Exempt Micro-Entities from EU Accounting Burdens

11 March 2010
by ESBA -- last modified 05 May 2010

The European Small Business Alliance welcomes today’s decision by the European Parliament to adopt the Commission’s proposal to exempt micro entities from certain EU accounting burdens. The exemption is the first real EU effort specifically aimed at micro-businesses and can be seen as the ‘flagship’ of the EUs overall commitment to reduce administrative burdens by 25% by 2010. The measure is estimated to account for savings of EUR 6.3 billion EU-wide, and is a major step towards achieving this 25% goal.

The current accounting requirements for EU businesses are laid down in the 4th and 7th Company Law Directives. When these Directives were created, SMEs were not seen as essentially different from large companies. Yet, SMEs are often affected much heavier by the cost of regulations than larger companies.  The EU has come to acknowledge that small businesses have specific needs and that micro-entities are fundamentally different from medium-sized companies. The specific nature of micro-entities requires exemption from rules that are designed to fit large companies. The exemption allows Member States to align micro-entities' reporting requirements with the real needs of users and preparers of financial statements, enabling them to remain the EU's main providers of employment.

ESBA President Tina Sommer said: "Today's decision of the European Parliament to adopt the Commission's proposal  is a much awaited signal from the EU towards the small business community in Europe, showing that the European Union indeed has their interest at heart and is willing to help them survive the crisis. It increases the credibility of EU claims towards reducing administrative burdens and will positively affect the trust of the small business community in the EU's efforts to support our smallest and most vulnerable businesses. ESBA urges the Council to follow in the Commission's and Parliament's footsteps and to commit to the EU's promise to reduce administrative burdens".

Founded in 1998 by eight independent national small business associations, The European Small Business Alliance (ESBA) is a non-party political group, which cares for small business entrepreneurs and the self-employed and represents them through targeted EU advocacy and profiling activities. ESBA also works towards the development of strong independent advocacy and benefits groups in European countries. ESBA's new website, which provides an innovative approach to communication amongst business organizations, reflects these three main fields of activity.