Most EU SMEs consider taxation matters to be the most burdensome policy area that affects them. The Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs carries out studies and projects in the field of SME taxation to find out how their tax situation could be improved.
While large enterprises can usually call on tax experts for advice on how to optimise their net profits, SMEs have many difficulties regarding tax matters, for example:
The main objectives of the study are:
The study shall draw conclusions and present recommendations on how the competitive situation of SMEs could be improved with regard to administrative costs, in particular the tax compliance costs that SMEs face.
The study will be published at the end of 2017.
This report analyses tax incentives for SMEs in 20 EU countries and five non-EU countries between 2009 and 2013. Its findings and recommendations are based on a comprehensive review of tax codes, modelling of tax burdens using two different models, a descriptive analysis of company financial ratios, and the perceptions of tax advisers and companies in each country.
The study focuses on tax systems and regulations, and their impact on business owners’ decisions to retain earnings or distribute profits. Tax systems in 19 countries are presented and analysed. The perceptions that businesses have of these tax systems are examined. To evaluate their impact three indicators are used: taxation itself and its aims; business owner understanding and perception of taxation; and the evolution of equity situations among businesses in the 19 target countries as a possible sign of taxation influencing businesses.
Compliance with tax rules can be challenging for small businesses. Tax legislation is often complex and drafted in a way that allows their application to businesses of all sizes, even for operations that are only carried out by large corporations.
This project looked at the various measures that the participating countries have taken to reduce tax compliance costs for SMEs. Its aim was to facilitate an exchange of best practice between countries and to support the distribution of tested methods to improve the business environment for European SMEs. The report concentrates on income taxes (personal and corporate) and payroll taxes (wage taxes). Value added tax is not included.
Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs
Unit H3 COSME Financial Instruments
B - 1049 Brussels