Brussels yesterday tabled a set of new business-friendly proposals aimed at cutting further red tape to SMEs, introducing more transparency and helping out social-related businesses which amount to almost 10 per cent of all SMEs in the EU.
The most important aspect of this package of initiatives for Maltese companies includes a revision of the Accounting Directive which will lessen the burden on SMEs where it comes to audit and accounting, thus saving on company expenses.
According to the Commission’s proposals, through amendments to the Accounting Directive, the Commission aims to reduce the administrative burden for small companies by simplifying the preparation of financial statements. The changes would make financial statements more comparable, clearer and easier to understand. It would also allow users of financial statements such as shareholders, banks and suppliers to gain a better understanding of a company’s performance and financial position.
The EU executive said that the potential cost savings for SMEs through this initiative are estimated at €1.7 billion per year.
Meanwhile, under the proposed revision of the Transparency Directive, the Commission is proposing that listed companies, including small and medium-sized issuers, would no longer be obliged to publish quarterly financial information. This would contribute to further cost savings and should help to discourage short-termism on financial markets.
Apart from new accounting provisions, the Commission’s ‘Responsible Business Package’ also includes changes in EU rules to facilitate social entrepreneurship and to introduce added transparency on the extractive and logging industries, like in the oil business.
On the social business aspect, the Commission is proposing innovative ways to improve social businesses’ access to funding, including EU funding through structural funds and the future setting-up of a financial instrument to provide social investment funds and financial intermediaries with equity, debt and risk-sharing instruments.
Other measures are aimed at improving their visibility and a simplified regulatory environment – including a future proposal for a European Foundation Statute, forthcoming revision of the public procurement rules and state aid measures for social and local services.
To obtain more transparency, the Commission wants the creation of a system of a “Country-by-country reporting” (CBCR) on payments made by the extractive and logging industries to governments all over the world.
This system would apply to EU privately-owned large companies or companies listed in the EU that are active in the oil, gas, mining or logging sectors.