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Background:
In 2009, the European Commission tabled a proposal to reduce burdensome accounting rules for Europe's smallest companies – so-called "micro-entities". With this final agreement of the Council, it will be possible for Member States to simplify radically the way in which micro-entities prepare their accounts. When it comes to publishing accounts, governments will be able to create a "one-stop-shop" which would see micro-entities only having to send their accounts to the tax administration, which would in turn be responsible for passing the accounts onto the Company Registry. Until now, in many countries micro-entities have to file a full set of financial statements, including the balance sheet and profit and loss account, and are required to disclose this through publication in a national gazette.
The simplifications will result in potential savings of up to €3.5 billion annually for micro-entities.
The agreement is a major step in completing the Single Market Act. It also honours commitments made in the Commission's better regulation and simplification programme, and contributes to the Commission's 2020 growth strategy. In October 2011, the Commission launched further proposals also to simplify accounting rules for small and medium companies, with potential cost savings up to €1.7 billion per year.