A PROPOSAL to reduce financial reporting requirements for micro-entities was passed by the European Competitiveness Council yesterday.
Small companies meeting two of three criteria – a balance sheet total under €250,000 (£200,000), net turnover below €500,000, and fewer than 10 employees on average over the financial year – may be permitted to prepare skeletal accounts, with a view to cutting red tape and boosting productivity.
The draft directive will be presented to parliament later this year. Commissioner Michel Barnier claimed it could save €3bn a year for 5.2 million micro-entities in member states.
He said: “Today’s agreement means in practical terms that the balance sheet and profit and loss accounts for these micro-businesses will be pared down to the key elements only. Publication of information will be reduced and simplified to balance sheets only and a one-stop shop.”
Barnier expressed hope that the directive will be approved by parliament on its next reading and commented: “I am confident that this agreement strikes the right balance between the need for simpler procedures and the need for transparency.”
If it is accepted, the directive will pass into law and be applicable to all member states.
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