The European Commission presented this Tuesday a series of initiatives to “respond to the needs” of small and medium-sized enterprises (SMEs), including the introduction of a measure to accelerate the payment of invoices, imposing a maximum period of 30 days. .
The new regulation to combat late payment in commercial transactions aims to put an end to “an unfair practice that endangers the cash flow of SMEs and damages the competitiveness and resilience of supply chains,” the European Commission says.
Brussels notes that the directive currently in force contains “ambiguities and legal loopholes” that will be eliminated with the proposed regulation, before introducing “a stricter maximum payment limit of 30 days”. The proposal also concerns the “automatic payment of accrued interest and compensation payments”. Brussels hopes that with the introduction of new measures, companies can be better protected ‘against bad payers’.
Estimated savings
According to Brussels’ calculations, timely payment to companies would allow savings of “340.2 million hours worked”, equivalent to “five days worked by each European company”, which means a saving of “almost 9 billion euros for the entire EU economy”.
Brussels proposes several “more productive” formulas to use this “time and money”, for example “to acquire new skills, invest in the company, recruit staff or expand activities”.
The European Commission’s forecast is that payment terms will be reduced by approximately 35%. Brussels also calculates that “the creation of alternative dispute resolution mechanisms” will guarantee annual savings for SMEs of the order of “27 million euros in avoided legal proceedings”.
Internal Market Commissioner Thierry Breton believes this is an “ambitious overhaul of the rules” that, especially in the case of late payments, will “create a fairer business environment for SMEs across the internal market”. “This will make small businesses more resilient and help them weather challenging times,” the commissioner said.
Facilitate financing
As part of these measures, the Commission is also proposing initiatives aimed at strengthening SMEs’ access to finance. Brussels proposes to “increase the financing guarantee capacity under the InvestEU program by EUR 7.5 billion”, which should be available “also for SMEs”, through a new dedicated window of the Strategic Technology Platform for Europe, in addition to “ the more than 200 billion already available”, in various programs for SMEs.
The measures also include a simpler regime in terms of taxation of these companies that “represent 99% of European business” and are “key drivers of Europe’s green and digital transitions”.
Tax simplification
The intention is that SMEs doing business across borders can choose to “communicate with only one tax authority”, namely the one in the country where they are headquartered, with which they are most familiar, and to avoid having to comply with multiple tax authorities. systems.
The Commission expects that the proposal “will strengthen tax certainty and fairness, reduce compliance costs and market distortions that affect business decisions, while minimizing the risk of double taxation and tax disputes.”
Expected benefits
The municipal council calculates that the cost savings for SMEs, related to meeting tax obligations, amounts to 32%, which amounts to an annual saving of 3.4 billion euros. “The expected reduction in compliance costs should in particular encourage investment and cross-border expansion in the EU,” the Commission says.
Economy Commissioner Paolo Gentiloni expects that “the resulting savings and simplification will encourage more SMEs to expand beyond national borders, creating more jobs for Europeans”.
João Francisco Guerreiro, in Brussels
Source: DN
