Update

SME Update

 Cannot read this email? Open in your browser.November 2021 
 

SME Update

November

 
 
 
 

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Get the latest news on SME, tax, audit and sustainable finance.

 
 
 
 

Highlights

 
 
 
 

  • Early Warning Europe and Accountancy Europe organise hybrid event on SMEs’ early warning and solvency challenges
  • Commission to propose new alleviations to promote SMEs’ access to capital markets
  • European Parliament members warn against sustainability reporting burdens on SMEs

 
 
 
 
 

Feature story

 
 
 
 

Early Warning Day brings together policy-makers, SMEs and mentors

On 28 September, Early Warning Europe and Accountancy Europe co-organised a hybrid event that brought together policymakers and entrepreneurs to discuss progress on preventive restructuring and second chance frameworks.

Specific highlights of the day included a keynote speech by EU Commissioner for Justice, Didier Reynders, who underlined that all EU countries must have real mechanisms in place for alerting and assisting companies in distress. The event also heard the personal stories of three entrepreneurs who managed to turn around their companies with the help of Early Warning assistance services. The second panel brought together mentors, accountants, SME entrepreneurs, European Commission (EC) and MEP Ondrej Kovarik (RE/Czech Republic) to discuss policy recommendations for further improvements.

The hybrid event assembled roughly 200 attendees of which around 70 in-person in the room, at ACE Events’ premises. Watch the recording

 
 
 
 
 

EU Developments

 
 
 
 

European Commission


EC launches new online tool to help SMEs access public procurement

The Access2procurement online portal, launched by EC on 21 September, aims to help SMEs to find international public procurement opportunities that are open to European companies.

For now, information is available only on Canada, but EC intends to add more countries at a later stage.

Information in the portal can be tailored in accordance with the procuring entity, the subject matter and the estimated value of the procurement. By answering a series of questions on the portal, businesses can also find out if they are eligible for the listed public procurement tenders. Read more

EC concludes current EU SME definition is fit for purpose

The EU SME Definition is a structural tool to identify enterprises that are confronted with market failure and particular challenges due to their size, being allowed, therefore, to receive preferential treatment in public support. It has become a key instrument in the EU SME policy and is referenced in many legal acts.

The current definition specifies SMEs as having:

  • Staff headcount of maximum 250 and either
  • Turnover of maximum EUR 50 million, or
  • Balance sheet total of EUR 43 million

EC was committed to evaluating the suitability of this definition. In a staff working document dated 28 September, the Commission concludes that the definition remains relevant, fit for its purpose, and has been effective in reaching its objectives. Most crucially, the evaluation found no evidence that points to a need for a revision. Read more

EC to propose further alleviations to SMEs’ listing

EC published on 19 October its Work Programme for 2022. Among the many initiatives is an upcoming proposal to further alleviate listing rules for SMEs. This initiative aims to simplify the listing requirements, including post-listing, to make public capital markets more attractive and facilitate access to capital for SMEs. A public consultation is expected in the coming weeks, and a legislative proposal in Q3 2022. Read more

New EC report on how solvency support measures helped SMEs during COVID-19

EC published on 3 November a report on national solvency measures for SMEs. According to this report, SMEs and other European businesses have been able to avoid bankruptcies also thanks to a wide range of national solvency measures implemented by Member States in the wake of the COVID-19 pandemic.

It highlights how a broad variety of national measures, including debt moratoria, safeguards for employees or fiscal measures are helping to prevent a liquidity crisis from turning into broader solvency crisis for European businesses. Read more

 
 
 
 
 

European Parliament


European Parliament publishes draft report on fair and simple taxation

The draft report, prepared by MEP Ludek Niedermayer (EPP/Czech Republic), makes several recommendations to improve the tax system for SMEs. For example, it calls for the following:

  • Pan-European “identical” VAT registration processes, and via online platforms
  • Unique pan-European income tax regime for SEs and start-ups
  • E-invoicing system with a focus on reducing compliance costs especially for SMEs
  • Introduce online reporting of data for (at least) cross-border Union trade, preferably by using data from e-invoicing

ECON Committee is scheduled to vote on this non-binding draft report on 13 January 2022, followed by a final Plenary vote on 14 February. Read more

EC presents SME Performance Review to ITRE Committee

The European Parliament Committee on Industry, Research and Energy (ITRE) was briefed on 15 October by the EC on the annual SME Performance Review. A representative from EC’s DG GROW gave an overview of the main findings of the Review and spoke about the dedicated assessment of SMEs in their efforts to digitalise. MEPs raised questions about promoting the digitalisation of microcompanies; financing the digital transition; the lack of focus on sustainability in the Review, as well as the longstanding issue of late payments.

Several MEPs call for sustainability requirements on SMEs to be proportionate

At its 28 October hearing, JURI Committee held a first exchange of views on the EC’s proposed corporate sustainability reporting Directive (CSRD). Several JURI MEPs raised concerns about the proposal’s possible impact on SMEs. For example:

  • Pascal Durand (RE/France), the MEP leading the file, said that small companies should be exempt from the scope as much as possible
  • Daniel Buda (EPP/Romania) expressed concerns about SMEs’ audit and warned against causing administrative problems for small companies
  • Lara Wolters (S&D/Netherlands) likewise warned that SMEs’ scoping would have to be carefully considered
  • Angelika Niebler (EPP/Germany) underlined proportionality and the need to protect especially SMEs with a more regional/local market focus

MEP Durand hopes that the Parliament can finalise its position by March 2022.

 
 
 
 
 

International Developments

 
 
 
 

Opinion: EU taxonomy can strengthen SMEs in the green transition

SMEs will remain exempt from new disclosure rules on the EU’s sustainable finance taxonomy starting in 2022. However, corporate leaders would be well-advised to follow its implications, including SMEs, writes Finn Wendland from the German Economic Institute.

Despite the formal exemption, chances are that large investors and end-producers will pass through their reporting requirements to intermediate producers regardless – many of whom are SMEs – with the aim of ensuring taxonomy alignment, he warns. Read more

Accountancy Europe’s sustainability checklist translated into German, Romanian and Norwegian

Accountancy Europe’s 3-step sustainability checklist for SMEs, published in May with the European Association of Cooperative Banks (EACB), has now been translated into Romanian and Norwegian. A German translation is also in the works.

This practical tool was designed to help SMEs’ accountants to conduct a sustainability profile and risk mapping of their SME clients. The final objective is to align the SME’s business model with sustainability priorities, and to prepare them for eventual sustainability reporting. Read more

SMEunited’s SME performance index shows high growth of small companies

The latest figures for SMEunited’s Business Climate Index for the European Union reveal a surge in SMEs confidence for autumn 2021. Indeed, the index presents a steep increase up to 76.1%, while last spring indicator stood at 59.8%. Hence, relative to last survey, 16.3% more SMEs recorded a positive or neutral expectation about the economic environment. Read more

 
 
 
 
 

National Developments

 
 
 
 

Greece encourages SMEs mergers in Recovery Fund implementation

The Greek government will incentivise SMEs that are hard-hit by the pandemic to merge to ensure financing from the Recovery Fund, Greek finance minister Christos Staikouras told EURACTIV Greece in an exclusive interview.

“Acquisitions, mergers, increasing businesses’ size is one of the pillars of the policy we will pursue in the Recovery Fund”, Staikouras said.

Previously, Minister for Development Adonis Georgiadis triggered opposition after stating that, if an SME wants to survive, it should “follow the rules of the modern economy”, e.g., by merging. This will leave many of the country’s small companies faced with the choice of risking extinction or joining forces with another company to ensure survival. Read more

 
 
 
 
 

Other News

 
 
European Commission
 
  New Fasanara €250 million fintech fund anchored by the EIF to support SMEs across the EU  
 
SMEunited
 
  SMEunited outlines its priorities for the French Council Presidency  
 

This curated content was brought to you by Johan Barros, Accountancy Europe policy manager since 2015. You can send him tips by email, follow him on Twitter and connect with him on LinkedIn.

 
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