Financial Reporting: burden reduction for micro-entities Published on: 06/01/2012, Last update: 05/06/2014
Commissioner Barnier welcomes Parliament vote on reducing accounting red tape for more than 5 million small companies.
"I very much welcome the European Parliament's vote on 13 December 2011 approving measures to considerably simplify life for more than 5 million of the smallest companies in Europe. Allowing these companies to benefit from a very simple system of financial reporting will mean that they can free up resources to invest in their businesses and deliver further growth.
This is a significant step benefiting the European economy as a whole. I now invite the Member States to fully adopt these new simpler accounting rules and call on them to find other ways to reduce red-tape. The Member States should ensure that the benefits of simplification reach each and every micro-entity in the EU, which make up around 75% of EU companies. They are the backbone of our economy. Simplifications such as these are a cost-free way to support small businesses, and will add to our long-term prosperity."
In 2009, the European Commission tabled proposals to reduce burdensome accounting rules for Europe's smallest companies – so-called "micro entities". From next year, 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. Today, 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 agreement is a major step in completing the Single Market Act (IP/11/469). 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, the Commission launched 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).
See also MEMO/11/911