The EU Commission’s Efforts to Support Small and Medium-Sized Companies

Strasbourg. The EU Commission wants to relieve the burden on small and medium-sized enterprises (SMEs) by reducing bureaucracy, simplifying taxation and new measures against late payments. The Brussels authority wants to simplify administrative procedures and reporting obligations and thus reduce the administrative burden, as EU Economics Commissioner Paolo Gentiloni and EU Internal Market Commissioner Thierry Breton said on Tuesday in Strasbourg. In addition, access to finance should be made easier for medium-sized businesses.

Late payments threaten medium-sized businesses

The Commission also wants to combat late payments with a new regulation. In times of crises and turbulence, payment delays increase and pose a risk for SMEs: In the EU, on average, every second business invoice is paid late – or not at all, the authority explained. According to the Commission’s wishes, a payment period of 30 days should apply to all commercial transactions in the future.

“We are simplifying tax rules, reducing administrative burdens and improving skills,” said Breton. Revising late payment rules will create a fairer business environment for SMEs across the single market. “This will make small businesses more resilient and help them get through difficult times,” said the Frenchman.

99 percent are small and medium-sized companies

According to information, 99 percent of all companies in the EU are small and medium-sized companies. They provide two-thirds of jobs in the private sector and are central to the economic and social fabric of Europe. A new representative in the commission will in future keep an eye on the interests of medium-sized businesses.

With simplified taxation, the Commission would like to overcome another hurdle for SMEs. According to information, companies operating across borders in the EU are currently subject to tax in more than one member state as soon as they establish a permanent permanent establishment abroad. In the future, according to the proposal, they should only interact with the tax administration at the headquarters – instead of having to comply with multiple tax systems. According to the Commission’s wishes, this should apply from 2026.

Relief also for cross-border companies

The Commission also wants to ease the burden on large, cross-border companies in the EU with various initiatives to reduce costs when complying with tax regulations. Twenty-seven different national tax systems made tax compliance difficult and costly for businesses, the agency said. A new set of rules should make it easier to see which taxes which companies have to pay and where.

On the one hand, the various legislative proposals are intended to make it easier and more cost-effective for companies to operate in the EU, said Gentiloni. This promotes investment and the creation of jobs. “And secondly, it should make it easier for tax authorities to ensure that companies pay what they are entitled to – which is good for tax fairness, public finances and social justice.”

Some proposals still need to be approved by EU countries or additionally negotiated with the European Parliament.