Update

SME

 Cannot read this email? Open in your browser.September 2019 
 

SME Update

July - August 2019

 
 
 
 

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

 
 
 
 
 

Our SME Hub

 
 
 

Our SME hub gathers our Member Bodies’ webpages for SMEs.

 
 
 
 

Highlights

 
 
 
 
  • SME’s challenges addressed by the European Commission
  • What can SMEs change to improve their competitiveness?
  • German cuts corporation taxes for SMEs
  • SMEs expect more from their accountants, new survey finds
 
 
 
 
 

EU Developments

 
 
 
 

European Commission


European Commission publishes report on sustainable fashion opportunities for SMEs

The European Commission has mapped sustainable fashion opportunities for SMEs, gathering current initiatives and key organisations in sustainable fashion and textiles sector across the EU.

This initiative follows a 2017 communication in which the Commission committed itself to support a more sustainable industry, towards a green transition and a circular economy. As fashion remains one of the most polluting industry, the Commission’s report gives a strong support to help the sector reach the Paris agreement’s goals. Read more.

From digitalisation to competitiveness: Commission publishes new index on Europe’s digital performance

On 12 June, the European Commission published the Digital Economy and Society Index (DESI) which gives an overview of Europe’s digital performance.

The indicators notably take into account the percentage of SMEs selling online, cross border and the e-commerce turnover percentage. Ireland, the Netherlands and Belgium are the best performers on e-commerce, while Poland and Hungary lag behind. It appears that the Netherlands is leading the adoption of e-business technologies, but the vast majority of the EU is yet to exploit the opportunities in e-commerce.

Many technological opportunities can still be exploited by SMEs, such as cloud services and customer relationship management. By closing the gap between SMEs and larger firms, SMEs’ owners would enhance their competitiveness, according to the European Commission. Read more.

Simplified financial reporting regime reduces red tape, new Commission study claims

A more simplified financial reporting regime would reduce the administrative burden for businesses by €106 million per year, according to the European Commission’s study on the accounting regime of limited liability micro companies.

The European Commission highlights that the lack of awareness and use of a so-called “super simplified regime” have a strong impact on businesses. On top of the simplified regime, a good information system could reduce the administrative burden by €1.3 billion.

The Commission deplores that micro companies may not always receive from their accountant information about possibilities for simplification of their financial reporting obligations. Read more.

Juncker plan invests in Finland

On 3 September, the European Investment Fund signed a deal with Finnvera, a state-owned financing company, to provide growth-seeking SMEs in Finland with a €190 million budget.

The agreement was made possible by the Juncker Plan’s European Fund for Strategic Investments, supporting currently 967.000 SMEs across the European Union. Read more.

 

 
 
 
 
 

European Committee of Regions


State of play of the EU policy framework on SMEs

On 29 July, the European Committee of Regions (CoR) published a report presenting an overview of the legal framework for European SMEs. It shows that at EU level, SMEs still experience problems in hiring skilled workers due to competition from larger firms and the general financial conditions.

CoR proposes to update the Small Business Act, with a new regional one based on principles closer to the capabilities of local and regional authorities. Indeed, regions see themselves as having an active role in addressing SMEs’ needs, but lack the capacity to do so.

To address the lack of skilled workforce, the European Commission has set up working groups which assists policy making and exchanges good practices on vocational education and training. Read more.

 
 
 
 
 

International Developments

 
 
 
 

Internal factors affect SMEs’ productivity

On 27 June, the OECD published its new report focusing on SMEs’ productivity. It found that SMEs should work on internal factors, such as the workforce and the managerial skills, to improve their productivity. Indeed, managerial skills influence many internal factors of SME productivity.

Other internal factors that can benefit from changes in management practices include digitalisation that can help professionalise SMEs’ management, business networks that can help small businesses to overcome size constraints, and innovation.

Tax incentives can also help overcome these challenges, as demonstrated by measures taken by the Netherlands. Read more.

SMEs have new opportunities in international trade

The global B2B payment market welcomes more and more SMEs cross-border payments. With globalisation and digitalisation, SMEs have new opportunities to expand in new markets like ecommerce platforms.

Blockchain technology has made cross-border payment processes easier for SMEs, providing cheaper and more secure alternatives to the current system. The so-called Internet of Value allows SMEs to move money around the world as easily as sharing information over the internet. Read more.

Cyber readiness tools made available for EU SMEs

The Cyber readiness Institute is developing practical tools specially for SMEs to develop their knowledge about cyber secure behaviours.

The Institute is currently translating its Programme into some EU languages: French, German, Spanish and Portuguese. The institute offers as a first step a test to determine the cyber readiness of the firm. Read more.

 
 
 
 
 

National Developments

 
 
 
 

Austrian measure to improve access to finance for SMEs

Austrian SMEs will benefit from new aid to access finance. The government is about to introduce a tax incentive for individual investors financing SMEs through intermediaries. The measure will be in place for six years, until 31 December 2029

On 31 July, the European Commission declared the measure to be compatible with EU state aid rules, and Austria was allowed to go ahead. Read more

UK SMEs have new demands for their accountants

According to a new survey ran by Xero, SME owners deplore that their accountants rarely provide sufficient support, have limited industry knowledge and make them feel like a second priority.

According to the survey, what SMEs need today are a good understanding of business challenges, technology abilities and the right support from their accountant. Firms that focus on client services and proactively deliver value to their client are increasing their clientele, the survey finds.

Thus, accountancy firms have the opportunity to restructure their services by being proactive regarding their clients’ needs, the survey concludes. Read more.

The impact of transfer pricing reforms on Irish SMEs

The new rules regarding tax-shifting by multinational companies will inevitably impact SMEs. To minimise this, the department of Finance is considering reducing documentation requirement for SMEs.

Ireland launched a public consultation running until 13 September to gather SMEs views on the topic. The majority of responses call for capital transactions to remain outside the scope of transfer pricing rules.

The results of the consultation will be part of the future legislation to be published in the Finance Bill for 2019. Read more.

Germany announces its SME Strategy

German SMEs should soon benefit from a reduction in their tax burden. On 29 August, the Economy Minister announced its SME Strategy, which plans to limit the level of corporate tax paid by SMEs to 25%.

The strategy also suggests a reduced administrative burden with a new Bureaucratic Relief Act. Read more.

Romania’s new automation platform for SMEs

Deloitte Romania has launched Processo, a new automation platform to help SMEs create their own business processes. The platform provides SMEs with automation benefits, to scale-up their digitalisation.

It addresses specific needs such as management of projects and budgets, and facilitates electronic archiving of documents in compliance with Romanian law. Read more.

UK’s digital skills programme for SMEs

Rural SMEs in the UK can apply to take part in the new digital skills prorgamme, financed with £900.000 of EU resources.

The goal of the programme is to increase the level of digital skills in rural communities, and improve competitiveness. The programme reaches out to SMEs working in agricultural technologies and bio-renewables. SMEs will also receive support to adopt new technologies and enter into emerging markets.

The deadline for applications is 25 November 2019. Read more.

SMEs deserve a complete legal framework to flourish

On 14 August, the Association of Chartered Certified Accountants (ACCA) published a new report, calling for governments to take their responsibility in helping new businesses to get started. SMEs do not only need finance, but also information about all the available legal options they can benefit from.

The ACCA developed a thorough analysis of the different business forms  in different jurisdictions around four indicators: Legal characteristics, administrative requirements, investment and returns.

It also reminds the unique role that governments have in setting up the boundaries of permissible activities under the law, and adjusting the rights and obligations of businesses. For example, accounting and disclosure requirements may differ between the legal form of business. Read more.

 
 
 
 
 

Other news

 
 
IESBA
 
IESBA is seeking comments until 31 October 2019 from SMEs and SMPs regarding the proposals for a revision of the International Code of Ethics for Professional Accountants
 
IFAC
 
The Small and Medium Practices Committee replied to the IAASB’s Exposure Draft for International Standard on Quality Management
 
European Commission
 
New EU funding call for SMEs with innovation ideas
 
European Commission
 
Open call for SMEs in the tourism sector
 
ESMERA
 
Open call for SMEs developing robotics solution
 

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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