Brussels, 30/09/2008 (Agence Europe) - European Internal Market Commissioner Charlie McCreevy said on Monday 29 September that he would propose allowing member states to exempt very small companies from the 4th directive (78/6660/EEC) on the auditing of annual accounts. In so doing, he will be following up on a recommendation from the European Parliament made in May of this year (see EUROPE 9665) and from the “Stoiber” group on reducing the administrative burden, which has little credibility in Brussels. “I consider that, on balance, there is merit in the Stoiber Group's proposal that member states should be allowed the option to exempt micro entities from the accounting requirements,” said McCreevy in a press release. He also said he believed the time had come to “overhaul the Accounting Directives” - and, indeed, to modernise them - and to consider the rules in the light of their impact on small and medium enterprises (SMEs).
The criteria for determining a micro-enterprise are contained in the Commission's May 2003 recommendation on the definition of SMEs, McCreevy's spokesman told EUROPE on Monday (see EUROPE 8463). According to this recommendation, a micro-enterprise is one which has fewer than 10 employees and whose turnover or balance sheet total is under €2 million. In its communication of July 2007, however, the Commission puts forward the following criteria: fewer than 10 employees, balance sheet total of less than €500,000 and turnover of less than €1 million (see EUROPE 9467).
The future proposal has met with hostility from professionals. The FEE (Federation of European Accountants) and the UEAPME (European Association of Craft, Small and Medium-sized Enterprises) have already warned against any proposal exempting micro-enterprises from European accounting rules. Worried about a return to a situation where 27 national sets of rules prevail, they believe that this is the wrong moment for decisions which run counter to accounting transparency. They wonder how member states which take up the exemption option would recover taxes from the companies in question if they were not subject to national rules either. (M.B./transl.rt)