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Writer's pictureAngéline Camus

Summary of the SME Relief Package

On 12 September, the European Commission presented a series of initiatives under the SME Relief Package, with the aim to better support SMEs in the EU:

1. A Proposal for a Regulation on late payments in commercial transactions, which:

  • Introduces a stricter maximum payment limit of 30 days

  • Ensures an automatic payment of accrued interest and compensation fees

  • Introduces new enforcement and redress measures to protect companies against bad payers.

  • Addresses the legal gaps in the current Directive.

2. A Proposal for a Directive establishing a Head Office Tax System, which will give SMEs operating cross-border through permanent establishments the option to interact with only one tax administration. It is expected to reduce compliance costs and distortions in the market.

3. Several non-legislative measures to support SMEs, including:

  • Reviewing, by the end of 2023, the current SME definition thresholds and developing a harmonised definition. The European Commission may also consider adapting certain obligations for small mid-cap companies

  • Continuing to apply the ‘one in one out principle’.

  • Improving the application of the SME Test.

  • Appointing a SME Envoy to provide guidance and advice to the Commission on SME issues, and advocate SME interests externally.

  • Simplifying administrative procedures and reporting requirements for SMEs by launching the Once-Only Technical System (part of the Single Digital Gateway) by the end of 2023, allowing SMEs to complete administrative procedures across the Single Market without the need to re-submit documents.

  • Enhancing access to sustainable finance, notably through a simple and standardised methodology that will support SMEs in reporting on sustainability topics.

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