Procedure : 2009/0035(COD)
Document stages in plenary
Document selected : A7-0011/2010

Texts tabled :

A7-0011/2010

Debates :

PV 08/03/2010 - 19
CRE 08/03/2010 - 19

Votes :

PV 10/03/2010 - 7.1
CRE 10/03/2010 - 7.1
Explanations of votes
Explanations of votes

Texts adopted :

P7_TA(2010)0052

REPORT     ***I
PDF 204kWORD 235k
3 February 2010
PE 421.432v02-00 A7-0011/2010

on the proposal for a directive of the European Parliament and of the Council amending Council Directive 78/660/EEC on the annual accounts of certain types of companies as regards micro-entities

(COM(2009)0083 – C6-0074/2009 – 2009/0035(COD))

Committee on Legal Affairs

Rapporteur: Klaus-Heiner Lehne

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION
 EXPLANATORY STATEMENT
 OPINION of the Committee on Economic and Monetary Affairs
 PROCEDURE

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a directive of the European Parliament and of the Council amending Council Directive 78/660/EEC on the annual accounts of certain types of companies as regards micro-entities

(COM(2009)0083 – C6-0074/2009 – 2009/0035(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

–   having regard to the Commission proposal to the European Parliament and the Council (COM(2009)0083),

–   having regard to Article 251(2) and Article 44(1) of the EC Treaty, pursuant to which the Commission submitted the proposal to Parliament (C6-0074/2009),

–   having regard to the Communication from the Commission to the European Parliament and the Council entitled "Consequences of the entry into force of the treaty of Lisbon for ongoing interinstitutional decision-making procedures" (COM(2009)0665),

–   having regard to Article 294(3) and Article 50(1) of the Treaty on the Functioning of the EU,

–   having regard to Rule 55 of its Rules of Procedure,

–   having regard to the report of the Committee on Legal Affairs and the opinion of the Committee on Economic and Monetary Affairs (A7-0011/2010),

1.  Adopts the position at first reading hereinafter set out;

2.  Calls on the Commission to refer the matter to Parliament again if it intends to amend its proposal substantially or replace it with another text;

3.  Instructs its President to forward its position to the Council, to the Commission and to the national parliaments.

Amendment  1

Proposal for a directive – amending act

Recital 6

Text proposed by the Commission

Amendment

(6) Micro-entities are however often subject to the same reporting rules as larger companies. Those rules put a burden on them which is not in proportion to their size and is therefore disproportionate for the smallest enterprises as compared to the larger enterprises. Therefore it should be possible to exempt micro-entities from the obligation to draw up annual accounts, even if such accounts provide an input for statistical information.

(6) Micro-entities are however often subject to the same reporting rules as larger companies. Those rules put a burden on them which is not in proportion to their size and is therefore disproportionate for the smallest enterprises as compared to the larger enterprises. Therefore it should be possible to exempt micro-entities from the obligation to draw up annual accounts, even if such accounts provide an input for statistical information. However, micro-entities must still be subject to the obligation to keep records showing the company's business transactions and financial situation as a minimum standard to which Member States remain free to add further obligations.

Justification

Clarification with regard to the compromise amendments to Article 1 (AMC 3).

Amendment  2

Proposal for a directive – amending act

Recital 8 a (new)

Text proposed by the Commission

Amendment

 

(8a) Given that the threshold values set in this Directive will apply to numbers of businesses which will vary greatly from one Member State to another, and given that the activities of micro-entities have no bearing on cross-border trade or the functioning of the internal market, the Member States should take into account the differing impact of these values when implementing this Directive at national level.

Justification

Sur la base des seuils fixés par l’Article 1er de la proposition de Directive pour identifier les micro entités, la Directive telle que proposée par la Commission touchera un nombre extrêmement variable d’entreprises d’un Etat Membre à l’autre. Ces différences renforcent la nécessité de laisser aux Etats Membres le libre choix d’exempter ou non ces sociétés pour la publication de leurs comptes annuels. L’absence de tout aspect transfrontalier dans l’activité de ces micro entités et donc l’absence d’impact sur le fonctionnement du marché intérieur ne permettent pas de justifier une harmonisation, même minime, par le biais de cette Directive.

Amendment  3

Proposal for a directive – amending act

Recital 8 b (new)

Text proposed by the Commission

Amendment

 

(8b) Whilst it is imperative to ensure transparency also for micro-entities, in order to ensure that they are open and have access to the financial markets, Member States should take into account the specific conditions and needs of their own market when implementing Directive 78/660/EEC.

Justification

It is very important to keep a certain level of transparency as regards small companies’ financial and economic situation and also to preserve trust of all the different actors in the market. In this respect, Member States have to consider what the actual situation is in their national market when implementing the Directive.

Amendment  4

Proposal for a directive – amending act

Article 1

Directive 78/660/EEC

Article 1 a – paragraph 1 – introductory wording

 

Text proposed by the Commission

Amendment

1. Member States may provide for an exemption from the obligations under this Directive for companies which on their balance sheet dates do not exceed the limits of two of the three following criteria:

1. Whilst maintaining the obligation to keep records showing the company's business transactions and financial situation, Member States may provide for an exemption from the obligations under this Directive for companies which on their balance-sheet dates do not exceed the limits of two of the three following criteria:

 

 

 

 

 

 

Justification

Addresses the concern that an exemption from accounting duties could hamper internal organisation and lower transparency and access to necessary information for, e.g., credit grants. With Member States (MS) will remain obliged to maintain a certain level of accounting obligations (records that show the company's business transactions and financial situation), which helps micro-entities (MEs) to structure their finances and provide information, if necessary, for credit grants (and also for tax-authorities). In any case, even with the exemption (MS-option!) MEs remain free to prepare more than this minimum-standard if they want.

Amendment  5

Proposal for a directive – amending act

Article 2 – paragraph 1 – subparagraph 1

Text proposed by the Commission

Amendment

1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive if and when they decide to make use of the option provided for in Article 1a of Directive 78/660/EEC. They shall forthwith communicate to the Commission the text of those provisions and a correlation table between those provisions and this Directive.

1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive if and when they decide to make use of the option provided for in Article 1a of Directive 78/660/EEC, taking account in particular of the situation at national level regarding the number of businesses covered under the threshold values laid down in that Article. They shall forthwith communicate to the Commission the text of those provisions and a correlation table between those provisions and this Directive.

Justification

Sur la base des seuils fixés par l’Article 1er de la proposition de Directive pour identifier les micro entités, la Directive telle que proposée par la Commission touchera un nombre extrêmement variable d’entreprises d’un Etat Membre à l’autre. Ces différences renforcent la nécessité de laisser aux Etats Membres le libre choix d’exempter ou non ces sociétés pour la publication de leurs comptes annuels. L’absence de tout aspect transfrontalier dans l’activité de ces micro entités et donc l’absence d’impact sur le fonctionnement du marché intérieur ne permettent pas de justifier une harmonisation, même minime, par le biais de cette Directive.


EXPLANATORY STATEMENT

The rapporteur welcomes the Commission text and fully supports its intention of simplifying the business environment for micro-entities and lifting the reporting requirements applying to them, thereby enabling their competitiveness and their growth potential to be turned more effectively to account(1).

The Commission is thus meeting (practically in so many words) a call that Parliament has been putting forward for years, which found expression most recently in the resolution of 18 December 2008(2).

The soundness of the Members’ calls has been borne out by experts. In its opinion of 10 July 2008 entitled ‘Administrative burden reduction; priority area company law / annual accounts’ the High-Level Group of Independent Stakeholders on Administrative Burdens(3) concurs with Parliament’s attitude regarding the need to exempt micro-entities from EU accounting requirements.(4)

The reach of micro-entities’ business is generally confined to the regional and local market. To that extent they have no cross-border impact on the single European market, and the logical conclusion, therefore, is that they need not be bound by EU-wide internal market regulations.

Rather than being decided upon by individual Member States, exemption for micro-entities ought preferably to apply automatically in the Member States as a whole. However, the political reality in the Council is such that this necessary step cannot be taken at the present time. That being the case, the option favoured by the Commission, whereby exemption will be a matter for Member States, should, in the rapporteur’s opinion, be left unchanged.

The rapporteur did consider whether to clarify the wording of the new Article 1a(1) in order to stress the fact that micro-entities lie entirely outside the scope of the directive. In the end, however, he rejected that option, as the limits laid down in Article 1a(a) could not otherwise have been regularly raised as provided for in Article 53 of Directive 78/660/EEC. According to his understanding, the wording of Article 1a(1) means that micro-entities are exempted from the obligations deriving from the directive but will continue to be covered by Article 53, which requires the Commission to revise the limits.

The committee, on the basis of a compromise, adopted amendments to Article 1 a paragraph 1 of Directive 78/660/EEC and the corresponding recital 6, stating that micro-entities must still be subject to the obligation to keep records that show the company's business transactions and financial situation as a minimum standard to which Member States remain free to add further obligations.

Furthermore, the committee adopted three amendments ,highlighting that Member States should have the free choice of exempting micro-entities or not, taking into account in particular of the situation at national level regarding the number of businesses covered under the threshold values laid down in the Directive.

(1)

cf. COM(2009)0083 of 26 February 2009, point 1.1.

(2)

European Parliament resolution of 18 December 2008 on accounting requirements as regards small and medium-sized companies, particularly micro-entities: see paragraph 2.

(3)

Known as the ‘Stoiber Group’.

(4)

See point 29 of the opinion.


OPINION of the Committee on Economic and Monetary Affairs (20.10.2009)

for the Committee on Legal Affairs

on the proposal for a directive of the European Parliament and of the Council amending Council Directive 78/660/EEC on the annual accounts of certain types of companies as regards micro-entities

(COM(2009)0083 – C7-0074/2009 – 2009/0035(COD))

Rapporteur: Dirk Sterckx

SHORT JUSTIFICATION

Reducing the administrative burden is an essential condition for boosting the European economy and growth, especially considering the potential benefits for SMEs. Therefore, the Commission's "European Economic Recovery Plan" to restore consumer and business confidence in which the Commission pledges to reduce the burden on small and medium sized enterprises (SMEs)(1) is highly welcomed.

Secondly, it is recalled that the European Parliament encouraged “the Commission to continue its activities with regard to the simplification of company law, accounting and auditing…, in particular the 4th and 7th Company Law Directives”(2).

The current Commission Proposal, however, falls short in addressing these two issues.

First, it is arguable whether the option to exempt micro-entities from the obligation to prepare and publish their annual accounts will in the end reduce the administrative burden significantly.

The impact assessment accompanying the Commission proposal exaggerates the advantages and fails to quantify and consequently under-estimates the disadvantages of exempting micro-entities(3). For example, the impact assessment fails to take into account the costs related to new accounting requirements that member states will impose on micro-entities and the cost related to the collection of new statistical data. It also fails to quantify the impact on the single market, information to external stakeholders and creditor's protection.

Uneven application by member states of the option to exempt micro-entities will lead to fragmentation of the single market. It will also reduce transparency. A micro-entity engaged in cross border trading could be deprived of access to its trading partner annual accounts and therefore it would be deprived of a means to check the solvability of its trading partner. This would dampen cross-border trade.

Secondly, reducing the administrative burden for SMEs must be realised in a coherent and comprehensive manner. As the Commission is already foreseeing a general revision of the 4th and 7th Company Law Directives in 2010, it is asked that the Commission withdraws its current proposal and comes back with a comprehensive proposal in 2010.

Exempting micro-entities from the statutory requirement to prepare and publish annual accounts will not exempt them from preparing tax-accounts. Nor will it prevent stakeholders and creditors from asking a micro-entity to have accounts prepared before doing business with them or before giving them credit. It is thus clear – as the Commission rightly indicates in her impact assessment(4) – that the statistical information now drawn from the annual accounts of micro-entities will have to be collected through other means, thereby significantly reducing and possibly even undo the advantages of the Commission proposal.

Sharing best practices between Member States could contribute in a more sustainable way to the creation of an appropriate set of national rules and minimization of administrative burdens. In this respect the Commission should consider to refrain from proposing any measure which would negatively affect the impact of national measures to reduce the administrative burden.

Therefore it is asked that the comprehensive proposal that the Commission shall put forward in 2010 is accompanied by an all-inclusive impact assessment that estimates and quantifies both advantages and disadvantages of its proposal. In its impact assessment and proposal the Commission must take into account best practices as identified across the EU.

******

The Committee on Economic and Monetary Affairs calls on the Committee on Legal Affairs, as the committee responsible, to propose rejection of the Commission proposal and to ask for a general revision of the 4th and 7th Company Law Directives in 2010, which shall focus, in particular, on reducing the administrative burden and simplifying the financial reporting requirements of micro-entities.

The general revision of the 4th and 7th Company Law Directives should be accompanied by a comprehensive impact assessment, which focuses on the question whether Member States' option to exempt micro-entities from their obligations under the 4th Company Law Directive will in fact reduce the administrative burden on them. The impact assessment should, accordingly, take into account not only the advantages of such an optional exemption of micro-entities, but also the possible negative consequential measures most likely to be imposed by many Member States, such as alternative accounting requirements.

Furthermore, the Committee on Economic and Monetary Affairs suggests that the Commission consider whether only micro-entities with a turnover from cross-border activities within the European Union not exceeding a certain percentage (for example 10 %) of their total turnover should benefit from the simplification of financial reporting requirements.

PROCEDURE

Title

Annual accounts of certain types of companies as regards micro-entities

References

COM(2009)0083 – C6-0074/2009 – 2009/0035(COD)

Committee responsible

JURI

Opinion by

       Date announced in plenary

ECON

9.3.2009

 

 

 

Rapporteur

       Date appointed

Dirk Sterckx

21.7.2009

 

 

Discussed in committee

29.9.2009

19.10.2009

 

 

Date adopted

19.10.2009

 

 

 

Result of final vote

+:

–:

0:

33

8

1

Members present for the final vote

Udo Bullmann, Nikolaos Chountis, George Sabin Cutaş, Leonardo Domenici, Diogo Feio, Elisa Ferreira, Vicky Ford, José Manuel García-Margallo y Marfil, Jean-Paul Gauzès, Sven Giegold, Sylvie Goulard, Enikő Győri, Liem Hoang Ngoc, Gunnar Hökmark, Othmar Karas, Wolf Klinz, Jürgen Klute, Astrid Lulling, Hans-Peter Martin, Íñigo Méndez de Vigo, Ivari Padar, Antolín Sánchez Presedo, Olle Schmidt, Edward Scicluna, Peter Simon, Peter Skinner, Theodor Dumitru Stolojan, Kay Swinburne, Marianne Thyssen, Ramon Tremosa I Balcells, Corien Wortmann-Kool

Substitute(s) present for the final vote

Magdalena Alvarez, Jean-Pierre Audy, Pervenche Berès, Sophie Briard Auconie, Sari Essayah, Danuta Maria Hübner, Philippe Lamberts, Klaus-Heiner Lehne, Thomas Mann, Dirk Sterckx, Pablo Zalba Bidegain

(1)

Communication from the Commission to the European Council, A European Economic Recovery Plan - COM(2008) 800, 26.11.2008, point 4, Available on the Commission website: http://ec.europa.eu/commission_barroso/president/pdf/Comm_20081126.pdf

(2)

Report on International Financial Reporting Standards (IFRS) and the Governance of the International Accounting Standards Board (IASB) (2006/2248(INI)), EP, Committee on Economic and Monetary Affairs, Rapporteur: Alexander Radwan, A6-0032/2008, 5.2.2008, p. 10.

(3)

Impact Assessment: Accompanying document to the Proposal for a directive of the European Parliament and the Council amending Council Directive 78/660/EEC on the annual accounts of certain types of companies as regards micro-entities, SEC(2009)206, 26.02.2009, p. 27-31.

(4)

Impact Assessment: Accompanying document to the Proposal for a directive of the European Parliament and the Council amending Council Directive 78/660/EEC on the annual accounts of certain types of companies as regards micro-entities, SEC(2009)206, 26.02.2009, p. 30.


PROCEDURE

Title

Annual accounts of certain types of companies as regards micro-entities

References

COM(2009)0083 – C6-0074/2009 – 2009/0035(COD)

Date submitted to Parliament

26.2.2009

Committee responsible

       Date announced in plenary

JURI

19.10.2009

Committee(s) asked for opinion(s)

       Date announced in plenary

ECON

19.10.2009

 

 

 

Rapporteur(s)

       Date appointed

Klaus-Heiner Lehne

2.9.2009

 

 

Discussed in committee

3.9.2009

9.11.2009

 

 

Date adopted

28.1.2010

 

 

 

Result of final vote

+:

–:

0:

21

1

0

Members present for the final vote

Raffaele Baldassarre, Sebastian Valentin Bodu, Christian Engström, Marielle Gallo, Lidia Joanna Geringer de Oedenberg, Klaus-Heiner Lehne, Antonio Masip Hidalgo, Jiří Maštálka, Alajos Mészáros, Bernhard Rapkay, Evelyn Regner, Francesco Enrico Speroni, Alexandra Thein, Cecilia Wikström

Substitute(s) present for the final vote

Piotr Borys, Sajjad Karim, Vytautas Landsbergis, Kurt Lechner, Eva Lichtenberger, Toine Manders, Arlene McCarthy, Angelika Niebler, Georgios Papastamkos

Last updated: 11 February 2010Legal notice