COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITEE AND THE COMITTEE OF THE REGIONS Smart regulation - Responding to the needs of small and medium - sized enterprises
Date: 2013-03-07
Institutions: European Commission
Subjects: administrative formalities, economic growth, innovation, job creation, micro-enterprise, tax exemption

EUROPEAN 
COMMISSION 

Brussels, 7.3.2013  
COM(2013) 122 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITEE AND THE COMITTEE OF THE REGIONS 

Smart regulation - Responding  to the needs of small and medium - sized enterprises 

{SWD(2013) 60 final} 

EN 

   EN 

 
 
 
 
  
 
Smart Regulation – Responding to the needs of small and medium-sized enterprises 

1. Introduction  

Small  and  medium-sized  enterprises  form  the  backbone  of  the  European  economy, 
contributing  significantly  to  innovation,  growth  and  job  creation.  In  the  EU,  some  20,7 
million  SMEs  employ  67%  of  the  private  sector  workforce.  A  recent  study  has  shown  that 
85% of net new jobs in the EU between 2002 and 2010 were created by SMEs. This clearly 
indicates their importance for economic growth and job creation in Europe.1 

SMEs  can  thrive  best  in  a  business  environment  in  which  regulation  respects  the  specific 
needs  of  SME  while  pursuing  its  policy  objectives.  Regulation  is  necessary  for  the  Single 
Market,  creating  a  level  playing  field  by  ensuring  fair  competition,  contributing  to  human 
health  and  safety  and  protecting  the  environment,  workers  and  consumers.  It  is  a  vehicle 
through which EU public policy aims are achieved bringing benefits to Europe's citizens. It 
needs to be designed with SMEs in mind. 

Since the adoption of the Small Business Act for Europe (SBA), cutting red tape and listening 
to  the  voice  of  SMEs  have  been  firmly  embedded  in  the  Commission's  work.  The 
Commission  Communication  on  'Minimising  regulatory  burden  for  SMEs  –  Adapting  EU 
regulation to the needs of micro-enterprises' from 2011 takes this work a step further. It builds 
on the “Think Small First” principle set out in the SBA which requires that impacts on SMEs 
be taken into account when designing legislation and that the existing regulatory environment 
be  simplified.2  It  established  the  possibility  for  the  exemption  of  micro-enterprises  from 
regulation  when  justified  and  for  lighter  regulatory  regimes  for  SMEs.3  More  recently,  the 
Industrial  Policy  Communication4  recommended  simplification  of  the  regulatory  and 
administrative environment, especially for SMEs and highlighted the importance of a simple, 
stable  and  predictable  long  term  regulatory  framework  for  investment  in  new  technologies 
and  innovation.  Finally,  the  new  Regulatory  Fitness  and  Performance  Programme  (REFIT), 
makes the identification of simplification possibilities, unnecessary regulatory costs and areas 
for performance improvement an integral and stable part of policy making and programming.5 

This Communication reviews progress in:  

•  applying the micro-enterprise exemption;   
• 
• 
•  ensuring regulatory fitness. 

introducing lighter regulatory regimes for SMEs;  
introducing the SME scoreboard; 

1 http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/files/supporting-

documents/2012/do-smes-create-more-and-better-jobs_en.pdf 

2 COM(2008) 394 final, page 7 
3 Commission Report "Minimizing regulatory burden for SMEs - Adapting EU regulation to the needs of micro-

enterprises", COM(2011)803 

4  COM(2012)  582  final  –  Communication  from  the  European  Commission  to  the  European  Parliament,  the 
Council,  the  European  Economic  and  Social  Committee  and  the  Committee  of  the  Regions  -  A  Stronger 
European Industry for Growth and Economic Recovery 

5 COM(2012) 746 final  http://ec.europa.eu/governance/better_regulation/documents/com_2013_en.pdf 

2 

 
 
 
 
 
 
 
                                                            
It also identifies the next steps that will be taken for SMEs in policy making and 
programming. 

2. Exempting micro-enterprises from EU legislation 

Before  the  European  Commission  proposes  new  initiatives  or  revisions  of  existing  EU 
legislation,  comprehensive  preparatory  work  takes  place.  This  starts  with  the  publication  of 
roadmaps  which  inform  stakeholders  about  possible  Commission  initiatives,  available 
evidence and planned preparatory and consultative work. These roadmaps contain information 
on  the  initial  problem  definition,  objectives,  options  and  preliminary  assessment  of  impacts 
and the envisaged timetable. They are public documents and a range of stakeholders – from 
SMEs  to  the  social  partners  –can  and  do  provide  their  views  on  them.    The  roadmaps  also 
indicate  when  and  how  stakeholders  will  be  consulted.6  The  Commission  assesses  the 
potential  economic,  social  and  environmental  consequences  of  all  its  proposals  with 
significant impacts through impact assessments (IA). They contain different options of how to 
address  the  problems,  one  of  which  has  always  to  be  the  "do-nothing"  option.  The  IAs 
undergo an independent quality control, before the Commission adopts its proposal.  

Through  the  impact  assessment  process,  the  Commission  aims  to  avoid  unnecessary 
regulatory burden.  It analyses whether micro-enterprises can be exempted from the coverage 
of the initiative without undermining the objective of the potential proposal.  

Example of SME exemptions that have been adopted by the EU legislator and are in 
the process of being implemented by Member States: 

o  Small shops selling electrical and electronic devices do not need to reserve extra 
space  to  meet  take-back  obligations  under  the  new  Directive  on  Electric  and 
Electronic Waste7.The take-back obligation only applies to retail shops larger than 
400m2. 

Examples  of  SME  exemptions  that  have  been  proposed  by  the  Commission  and  are 
now in the EU legislative procedure:  

o  Manufacturers  responsible  for  less  than  500  registrations  of  new  passenger  cars 
per year are excluded from the obligation of having a CO2 target according to the 
Commission proposal for a regulation amending Regulation (EC) No 443/2009 on 
car emissions.8 

6  In  the  social  policy  field,  for  example,  the  Treaty  makes  the  consultation  of  the  social  partners  mandatory 

before the Commission can submit proposals. 

7 Directive 2012/19/EU of the European Parliament and of the Council of 4 July 2012 on waste electrical and 

electronic equipment (WEEE), OJ L 197/38, 24.7.2012 

8  Commission  proposal  for  a  Regulation  amending  Regulation  (EC)  No  443/2009  to  define  the  modalities  for 

reaching the 2020 target to reduce CO2 emissions from new passenger cars, COM(2012) 393 

3 

 
 
 
 
 
 
                                                            
o  Certain categories of vehicles driven within a radius of less than 100 km from the 
base  of  their undertaking are proposed to be  exempted  from  Regulation  (EC)  N° 
561/2006 and therefore from the tachograph requirements.9 

o  It is proposed in a new general Data Protection Regulation.10 that companies with 
less  than  250  workers  need  not  have  a  Data  Protection  Officer  and  that  specific 
measures  must  be  considered  for  SMEs  in  the  context  of  Commission  delegated 
acts aimed at further specifying the criteria for assessing whether a Data Protection 
Impact Assessment is necessary..  

o  SMEs with less than 250 persons would not need to comply with the requirement 
of the Commission proposal on women in company boards11, requiring companies 
that have less than 40 % of non-executive directors to apply transparent selection 
procedures based on neutral selection criteria in order to attain 40 % by 1 January 
2020. 

Impact  assessments  have  also  shown  that  it  is  not  always  possible  to  exempt  micro-
enterprises. For instance, they cannot be excluded when there is clear evidence that excluding 
them would mean that the regulation would not be able to achieve its goals as e.g. to protect 
workers or consumers. They cannot be exempted from EU Treaty requirements protecting for 
example fundamental rights. Finally, they cannot be exempted where legislation specifically 
targets small firms such as 'letter box companies'12 which circumvent the law e.g. on services 
and competition. For such cases where micro companies cannot be excluded from legislative 
proposals, the analysis and reasons need to be explained in the IA. 

Limits to possible exemptions:  

-  When  addressing  the  problem  that  EU  minimum  standards  for  worker  protection  are 
circumvented  through  'letter  box  companies'13  in  the  context  of  the  Posting  of  Workers 
Directive,  it  was  clear  that  micro-enterprises  could  not  be  excluded.  This  was  because 
such letter box companies are, almost by definition, micro-enterprises and excluding them 
would  have  undermined  the  main  objective  of  the  measure:  stopping  unfair  commercial 
practices and unfair treatment of employees.   

- 

In the Commission proposal for a new Regulation on drug precursors, a general exclusion 
of  micro-enterprises  was  impossible  because  this  would  have  created  an  easy  route  to 
undermine the objectives of the legislation. Traffickers could have established themselves 

9  Commission  proposal  for  a  regulation  amending  Council  Regulation  (EEC)  No  3821/85  on  recording 
equipment in road transport and amending Regulation (EC) No 561/2006 of the European Parliament and the 
Council, COM(2011)451 

10 COM(2012) 11 
11 Proposal for a Directive of the European Parliament and the Council on improving the gender balance among 
non-executive  directors  of  companies  listed  on  stock  exchanges  and  related  measures  of  14.11  2012  COM 
(2012) 614 final. 

12 Letter box companies' are companies which have been set up with the purpose of benefitting from legislative 
loopholes  while  not  themselves  providing  any  service  to  clients,  but  rather  provide  a  front  for  services 
provided by their owners.  Such companies are normally very small and often only operate a letter box, hence 
the name.  

13 Companies that are formally established in a particular Member State not linked to their operations as a means 

to avoid the regulation of another Member State.  

4 

 
 
                                                            
as  micro-entities  in  order  to  evade  controls  by  the  authorities.  At  the  same  time,  the 
existing  regulatory  framework  already  accommodates  the  particular  needs  of  micro-
enterprises  as  the  existing  thresholds  allow  companies  with  sales  or  purchases  of  drug 
precursors below certain quantities to be excluded from most of the obligations. 

3. Emphasis on lighter regimes for SMEs 

When exemptions are not possible, efforts are made to tailor regulatory proposals to SMEs, 
for example; through the introduction of a lighter set of requirements for smaller businesses, 
reduced fees, etc.14 

Examples of lighter regimes for SMEs that have recently been adopted by the EU legislator 
and have recently entered into force or are in the process of being implemented by Member 
States: 

-  SMEs are encouraged, but not obliged, to carry out an energy audit according to the new 
Energy Efficiency Directive 2012/27/EU. Member States may set up support schemes for 
SMEs, including if they have concluded voluntary agreements, to cover costs both of an 
the  highly  cost-effective  audit 
energy  audit  and  of 
recommendations.  

implementation  of 

the 

-  Micro-enterprises can now choose simpler ways of showing that any one-off construction 
products  they  put  on  the  market  meet  applicable  product  standards  according  to 
Regulation 305/2011. 

Examples of lighter regimes for SMEs that have been proposed by the Commission and are 
now in the EU legislative procedure: 

-  The Commission has made proposals to make it easier for SMEs to participate in public 
procurement. Bidders for public tenders can provide self-declarations, rather than original 
documents  or  certificates,  showing  that  they  meet  eligibility  criteria.  Only  the  winning 
bidder  would  be  asked  to  provide  the  original  documents.  Breaking  tenders  down  into 
smaller  lots  will  be  encouraged.  Together  with  a  greater  use  of  e-procurement,  these 
modernised  rules  in  the  proposed  Public  Procurement  Directive15  would  facilitate  the 
participation of SMEs in contracts worth about 18% of EU GDP.  

In addition, some EU legislation leaves it up to each Member State to decide whether it wants 
to  introduce  lighter  regimes  for  SMEs  (for  example,  in  the  areas  of  information  and 
consultation of workers16, food hygiene17, waste18 and annual accounts19).  

14 COM (2011) 803, page 6 
15 COM (2011) 896 
16 Directive 2002/14/EC of the European Parliament and of the Council of 11 march 2002 establishing a general 

framework for informing and consulting employees. 

17 Regulation (EC) No 178/2002 of the European  Parliament and of the Council of 28 January 2002 laying down 
the  general  principles  and  requirements  of  food  law,  establishing  the  European  Food  Safety  Authority  and 
laying down procedures in matters of food safety; Regulation (EC) No 852/2004 of the European Parliament 
and  of  the  Council  of  29  April  2004  on  the  hygiene  of  foodstuffs;  Regulation  (EC)  No  853/2004  of  the 
European  Parliament  and  of  the  Council  of  29  April  2004  laying  down  specific  hygiene  rules  for  food  of 
animal origin; Regulation (EC) No 854/2004 of the European Parliament and of the Council of 29 April 2004 

5 

 
 
 
                                                            
 
4. The SME Scoreboard  

The Commission is issuing an annual scoreboard20 covering regulatory initiatives expected to 
have a significant impact on SMEs. This scoreboard allows all interested parties, including the 
network  of  national  SME  Envoys,  to  identify  where  and  how  progress  on  SME  relevant 
legislation  is  being  made  at  EU  level.  It  allows  the  progress  of  the  legislative  cycle  from 
Commission proposal through to implementation in Member States to be tracked. It identifies 
the main issues involved and indicates the positions taken on them throughout the legislative 
cycle,  flagging  if  regulatory  burden  has  been  added  or  reduced  at  the  various  stages  from 
Commission  adoption  to  implementation.  Tracking  implementation  in  Member  States  will 
allow the outcome at the level that directly affects business to be assessed in the light of best 
practice21. It will point to how different approaches to implementation affect overall results.  

The main legal acts and legislative proposals that the scoreboard monitors closely were set out 
in the Report 'Minimising regulatory burden for SMEs – Adapting EU regulation to the needs 
of  micro-enterprises'  of  November  201122.  Of  the  13  initiatives  listed,  the  Commission  has 
adopted 3 proposals23 which figure in this year's scoreboard. The scoreboard also reports on 
other initiatives which were identified in 2012 as having a significant impact on SMEs.  

5. Supporting and consulting SMEs  

5.1 

SME Consultation – General Aspects 

SMEs  and  organisations  representing  their  interests  are  interested  to  know  what  new 
regulatory initiatives are under consideration in the Commission, what impact they may have 
and when they can make their views known in the preparatory process. They have welcomed 
the  publication  of  roadmaps  and  many  SMEs  have  asked  to  be  informed  earlier  about 
upcoming consultations. The Commission is updating its consultation standards and envisages 
the publication of a rolling calendar of planned consultations on the 'Your Voice in Europe' 
website.  It  has  also  set  up  an  alert  mechanism  under  the  Transparency  Register  to  inform 
stakeholders about roadmaps and upcoming consultations. 

The  Small  Business  Act  has  also  established  strong  governance  mechanisms  based  on  the 
close  cooperation  with  Member  States  and  SME  stakeholders.  The  implementation  of  the 
SBA  is  now  supported  by  the  SME  Envoys,  a  network  of  high  level  representatives  from 
Member States.  The nomination of a single point of contact for all issues related to the SBA 
in  the  Member  States  has  reinforced  the  application  of  its  principles  and  allows  Member 
States  to  exchange  best  practices.  To  involve  stakeholders  directly,  representative  SME 

laying down specific rules for the organisation of official controls on products of animal origin intended for 
human consumption. 

18 Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste 
19  Directive  2012/6/EU  of  the  European  Parliament  and  of  the  Council  of  14  March  2012  amending  Council 

Directive 78/660/EEC on the annual accounts of certain types of companies as regards micro-entities 

20 See Commission Staff Working Document annexed to this Communication 
21 http://ec.europa.eu/dgs/secretariat_general/admin_burden/best_practice_report/best_practice_report_en.htm 
22 See Annex II of the Commission Communication COM (2011)803. 
23 Proposal for a revised Directive on the protection of individuals with regard to the processing of personal data 
(COM  (2012)  11)  and  Proposal  for  a  revised  Directive  of  the  European  Parliament  and  of  the  Council  on 
public procurement (COM (2011) 896). The proposal for a revised Directive on waste electrical and electronic 
equipment has already led to a revised Directive 2012/19/EU of the European Parliament and of the Council 
of 4 July 2012 on waste electrical and electronic equipment (WEEE). 

6 

 
 
 
 
 
                                                                                                                                                                                          
business  organisations  at  European  level  participate  as  observers  in  the  meetings  of  the 
network. These activities aim to ensure that regulatory burden reduction becomes a priority in 
the Member States through an enhanced sharing of best practices. For example, the Network 
has been instrumental in reducing the time to start-up a business in Europe24. Furthermore, the 
Commission has proposed that the appointment of an SME Envoy and the implementation of 
the SME Test by Member States are introduced as criteria for Member States to receive SME-
related support from the European Regional Development Fund25.  

Regular annual meetings between SME associations and the Commission are also now held to 
identify  and  monitor  SME  relevant  priority initiatives in the  Commission  Work  Programme 
(see Annex II in Staff Working Document annexed to this Communication) for SME impacts.  
The Commission is using the Enterprise Europe Network (EEN) to consult SMEs, including 
micro  enterprises,  directly  on  forthcoming  legislation  ('SME  Panel'  consultation)  and  to 
collect  their  feed-back  on  the  existing  EU  legislation  ('SME  feed-back'  database).  Business 
organisations  and  Member  States  have  welcomed  such  developments  as  important  for  SME 
policy. 

In  addition,  the  Commission  organised  conferences  with  SMEs  from  Germany,  the 
Netherlands,  Sweden,  the  UK,  Poland  and  Italy  in  2012.  These  conferences  allowed 
entrepreneurs  from  SMEs  to  raise  their  concerns,  in  different  areas  like  labour  law,  the 
regulation  of  the  marketing  of  products  and  the  related  process  of  the  setting  of  European 
product standards confirming the compliance of products with regulatory requirements, health 
and safety, environment, VAT and food hygiene and labelling. The conferences also allowed 
face-to-face  discussion  and  the  exchange  of  detailed  information  and  positions.  The 
information collected is also being fed into the REFIT mapping and programming exercise.  

The Commission is also consulting SME employers organisations regularly through EU social 
partner consultations and through the work of European social dialogue committees. SME 
associations have been contributing actively to the definition and implementation of the work 
programme of the European social partners 2012-2014.26 

Finally, the SME dimension has become a focus of the High Level Group on Administrative 
Burdens  (HLGAB),  an  expert  group  created in 2007 to advise the Commission on  reducing 
administrative burdens resulting from EU legislation. The Commission recently extended the 
mandate  of  the  Group  until  October  2014.27  The  Group  will  advise  on  EU  regulatory 
measures  adopted  by  Parliament  and  Council  under  the  Administrative  Burden  Reduction 
Programme  and  look  into  how  the  27  Member  States  have  implemented  these  measures.  
SMEs  will  be  consulted  on  the  extent  to  which  the  measures  taken  have  made  a  real 
difference for them. This work will facilitate the exchange of information between Member 
States  on  different  ways  of  implementing  EU  legislation  and  it  will  contribute  to  better 
understanding of the final impact of measures adopted.  

24 http://ec.europa.eu/enterprise/policies/sme/business-environment/start-up-procedures/progress- 

2011/index_en.htm  
25 COM(2011) 615 final/2 
26 http://www.ueapme.com/IMG/pdf/EUSD_work_prog_2012-2014.pdf 
27 http://ec.europa.eu/dgs/secretariat_general/admin_burden/ind_stakeholders/ind_stakeholders_en.htm 

7 

 
 
 
 
 
 
                                                            
 
5.2 

"TOP10" Consultation  

In an EU-wide open internet-based consultation from October through to December 2012, the 
Commission invited SMEs and organisations representing their interests to identify ten areas 
or pieces or pieces of EU legislation that they considered to be the most burdensome. They 
could choose from a non-exhaustive list or freely enter other items.  They were not asked to 
justify or explain their choice, although some chose to do so.  Nor were they asked to identify 
precisely if the burden derived from EU or national law. The consultation allowed SMEs to 
voice their concerns directly to the Commission.  

The  Commission  staff  working  document  attached  to  this  Communication  summarises  the 
results of this consultation. The full set of responses is being assessed and follow up actions 
will be spelled out as part of the Commission's Regulatory Fitness Programme (see section 6 
below)28.  

The  TOP  10  Consultation  produced  a  total  of  1000  responses29  including  from  individual 
SMEs  (over  600  responses  from  SMEs  based  in  the  EU,  40%  of  which  were  micro-
enterprises)  and  organisations  representing  SMEs  interests  at  different  levels  in  the  EU 
(nearly  150  responses).  Reactions  were  received  from  almost  all  EU  Member  States  (with 
more than half of the replies from individual SMEs in 3 Member States - BE, DE and IT), and 
also from some non-EU countries, mainly Turkey.  

Both  the  policy  areas  and  the  pieces  of  EU  legislation  which  were  raised  by  the  highest 
number of individual SMEs and SME representative organisations are listed in annex III (see 
Staff Working Document annexed to this Communication). 

REACH  (Registration,  Evaluation,  Authorisation  and  Restriction  of  Chemicals  -  Regulation 
(EC) No 1907/2006) was the EU measure most often cited by both individual SMEs and the 
organisations  representing  their  interests.  Both  types  of  respondents  also  identified:  VAT 
legislation30,  the  General  Product  Safety  Directive (Directive  2001/95/EC),  the  Directive  on 
Recognition of Professional Qualifications (Directive 2005/36/EC) and the Directive on Data 
Protection  (Directive  95/46/EC).  Even  though  they  identify  different  specific  legislative 
measures,  both  categories  of  respondent  identified  waste-related  legislation31  and  labour 
market-related  legislation32.  Legislation  on  equipment  in  road  transport  for  driving  and  rest 
periods (Regulation (EEC) No 3821/85); procedures for the award of public works contracts, 
public  supply  contracts  and  public  service  contracts  (Directive  2004/18/EC),  and  the 
Modernised Customs Code (Regulation (EC) No 450/2008) were also flagged in the TOP 10. 

28 COM (2012) 746 final http://ec.europa.eu/governance/better_regulation/documents/com_2013_en.pdf 
29 The full results of the consultation have been published on the website Your Voice in Europe.  
30 Common system of value added tax - Council Directive 2006/112/EC, Refund of value added tax to taxable 
persons  not  established  in  the  Member  State  of  refund  but  established  in  another  Member  State  -  Council 
Directive 2008/9/EC 

31 Shipments of waste - Regulation (EC) No 1013/2006, Waste framework Directive - Directive 2008/98, and 

List of waste – Commission Decision 2000/532/EC. 

32 Measures to encourage improvements in the safety and health of workers at work – Directive 89/391/EEC; 
the  directive  on  Posting  of  Workers  -  Directive  96/71/EC;    and  the  Working  time  directive  -  Directive 
2003/88/EC were all referred to in the responses to the consultation. In terms of ranking by individual SMEs 
and  SME  representative  organisations,  Directive  89/381/EC  was  ranked  6th  and  3rd  respectively;  Directive 
96/71  was  ranked  19th  and  8th  respectively  and  Directive  2003/88/EC  was  ranked  respectively  5th  and  7th 
respectively. 

8 

 
 
 
 
 
 
 
                                                            
6. Responding to SME Consultations  

The  Commission  considers  the  results  of  consultation,  to  be  important  signals  of  SME 
concern. It will follow up on these consultations in various ways. 

First,  work  is  already  in  progress  on  several  pieces  of  legislation  identified  in  the  TOP  10 
consultation:  

-  Registration,  Evaluation,  Authorisation  and  Restriction  of  Chemicals  (REACH)  - 
Regulation (EC) No 1907/2006: A review was completed in 2012 and adopted early 2013. 
It  was  supported  by  numerous  thematic  studies  with  an  input  from  more  than  1600 
companies.  The  review  concludes  that  REACH  functions  well  and  delivers  on  all 
objectives that at present can be assessed33. However, it also points out that the share of 
burden in achieving the result has been disproportionate for SMEs and that this issue has 
to be addressed as in the next phase of registration of substances until 2018 will involve 
many more SMEs. In this context, the Commission concludes that changes to the enacting 
terms of REACH will not be proposed but it makes specific recommendations to reduce 
the  impact  of  the  Regulation  on  SMEs.  It  should  however  be  noted  that  a  proposal  to 
modulate levels of fees to be paid to the European Chemicals Agency (ECHA) according 
to  the  size  of  the  company  is  being  considered  in  the  context  of  an  amendment  to 
regulation (EC) N° 340/2008. 

-  Common  system  of  value  added  tax  (VAT)  –  Council  Directive  2006/112/EC:  The 
Commission  has  launched  a  Communication34  towards  a  simpler,  more  robust  and 
efficient  VAT  system  tailored  to  the  single  market.  A  package  of  measures  has  been 
proposed by the Commission in 2012 to smooth the introduction of a mini-One Stop Shop 
in 2015 so that the taxation of telecommunications,  broadcasting and electronic services 
are more SME-friendly by allowing service suppliers to comply with their obligations in 
the whole of the EU by submitting a single VAT return and payment in the Member State 
in  which  they  are  established.  The  Commission  will  push  for  a  broadening  of  this  One 
Stop Shop. A recent improvement is that since January 2013, legislation35 allows Member 
States  to  implement  an  optional  scheme  whereby  businesses  with  an  annual  turnover 
below EUR 2 000 000 can delay payment of VAT to the relevant tax authority until they 
have  actually  received  payment  from  their  customers  ("cash  accounting").  The 
Commission  has  also  driven  forward  improvements  to  the  Refund  Directive  to  ensure  it 
works as intended and allows easier electronic submission of VAT refund claims. 

-  Directive 2001/95/EC on general product safety (GPSD): As part of the "Product Safety 
and  Market  Surveillance  Package"  adopted  on  13  February  2013,  the  Commission  is 
proposing  to  repeal  Directive  2001/95/EC  and  Directive  87/357/EEC  concerning  food-
imitating products and replace them by a Consumer Product Safety Regulation. Due to the 
subject-matter and objective of the proposed regulation, SMEs cannot be exempted from 
its requirements because rules aiming at protecting the health and safety of persons must 
apply  regardless  of  the  size  of  the  economic  operator.  However,  the  package  contains 

33 COM (2013) 49 
34 COM (2011) 851 
35 Directive 2010/45/EC 

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clear  indications  of  the  importance  the  Commission  attaches  to  the  needs  of  small 
businesses and provides the guidance and assistance they need to be able to comply with 
the rules. 

-  Procedures  for  the  award  of  public  works  contracts,  public  supply  contracts  and  public 
service  contracts  -  Directive  2004/18/EC:  The  Commission  has  proposed  a  new  Public 
Procurement  Directive36  in  2011  which  is  still  under  discussion  in  the  EU  legislative 
procedure  in  Parliament  and  Council.  It  would  facilitate  the  participation  of  SMEs  in 
contracts because significant simplification introduced into the procedures, including self-
declarations and encouraging smaller lots. 

-  Measures  to  encourage  improvements  in  the  safety  and  health  of  workers  at  work  – 
Council  Directive  89/391/EEC:  The  Commission  has  launched  a  comprehensive  policy 
evaluation  in  2012  to  assess  the  relevance,  effectiveness  and  coherence  of  the  main 
Directive and more than 20 daughter Directives. The results are expected in 2015. 

-  EU Waste legislation: In 2013, the Commission will start a comprehensive review of EU 
waste policy and legislation covering key targets in the Waste Framework Directive, the 
Landfill  Directive  and  the  Packaging  and  Packaging  Waste  Directive,  an  ex-post 
evaluation ("fitness check") of five Directives dealing with separate waste streams and an 
assessment of how the problem of plastic waste can be better tackled.  

-  Working  time  directive  –  Directive  2003/88:  The  Commission  has  carried  out  a 
comprehensive review of this Directive in 2010, on the basis of which it concluded that a 
revision  was  necessary.  The  European  social  partners  responded  to  the  consultation  by 
agreeing to negotiate on the terms of such a revision. However, the social partners have 
recently  communicated  that  such  negotiations  have  been  suspended  without  agreement. 
The Commission is currently examining how to proceed. 

-  Recording equipment in road transport for driving and rest periods – Council Regulation 
(EEC) No 3821/85: In 2011, the Commission proposed a new Regulation37 which is still 
under discussion in Parliament and Council. SMEs would benefit because certain types of 
vehicles  driven  within  a  radius  of  less  than  100  km  from  the  base  of  their  undertaking 
would not need to have a tachograph installed. 

-  Recognition  of  professional  qualifications  –  Directive  2005/36/EC:  In  2011  the 
Commission proposed a new Directive38 modernising the current directive. It is still under 
discussion  in  Parliament  and  Council.  It  would  help  SMEs  because  it  would  facilitate 
mobility of workers by, among other measures, introducing a European professional card. 
The  card  would  make  it  easier  and  quicker  for  the  authorities  of  Member  States  which 
regulate  those  activities  to  complete  the  formal  processes  for  the  recognition  of  the 
qualifications of professionals obtained in other Member States. The success and timing of 
individual recruitments can have a proportionately greater impact for smaller operators. 

Second, the results will be taken into account in the mapping of EU legislation that is being 
conducted  under  the  recently  announced  Regulatory  Fitness  and  Performance  Programme 

36 COM (2011) 896 
37 COM (2011) 451 
38 COM (2011) 883 final 

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(REFIT)39. REFIT entails as a first step the mapping of legislative and policy areas to identify 
any excessive burdens, inconsistencies, gaps, ineffective measures and cumulative effects so 
as to allow benefits to be attained in the most effective way. Attention will be paid to possible 
regulatory burden resulting  from the way that EU legislation is implemented at the national 
and sub-national level. It will take into account the specificities of SMEs and the importance 
of regulatory stability as voiced in many of the SME consultations. 

In some cases, the results of the mapping will make it possible to announce that a proposal to 
revise  legislation  can  be  quickly  launched  because  there  is  clear  evidence  of  the  need  for 
regulatory cost reduction/simplification. In other cases, a detailed evaluation may be needed 
because there is a general potential for simplifying rules and reducing regulatory burden, but 
further assessment is necessary.  In yet others, no immediate follow-up action may be needed, 
e.g. where legislation/areas of legislation are considered to be cost effective or where it is too 
early to assess their results/cost effectiveness. 

REFIT  will  also  ensure  the  coordination  and  prioritisation  of  the  screening  of  the  EU 
legislative  acquis  started  in  2011  to  reinforce  the  application  of  the  "Think  Small  First" 
principle  and  to  identify  possible  further  exemptions  or  burden  reductions  for  SMEs,  in 
particular micro-enterprises. 

REFIT multi-annual plans will be published and stakeholders and other interested parties will 
be able to comment. This will thus allow stakeholders, including SMEs and micro-enterprises 
to understand better and contribute more to the work of the Commission.  

The  REFIT  mapping  and  multi-annual  planning  will  take  account  of  work  to  which  the 
Commission is already committed, either due to legal requirements in existing EU legislation 
for studies, evaluations or reports, or as a result of its existing evaluation programming.  The 
Commission  is  committed  more  broadly  to  evaluating  regularly  whether  EU  legislation  has 
achieved  its  objectives,  and  if  there  are  simpler  and  cheaper  ways  to  get  the  same  benefits, 
reaching the same results.40 It will also examine whether SMEs find a piece of legislation easy 
to understand and implement and what might need to be improved. Where potential for lighter 
regimes  is  detected  in  such  evaluations,  this  could  trigger  revision  towards  more  SME-
friendly legislation, while respecting Treaty-based consultation obligations in specific policy 
areas and taking due account of the views of other relevant stakeholders. 

7. Next steps 

The Commission will continue to pay close attention to SMEs in its policy development and 
review. The REFIT programme will be implemented progressively with results, including the 
SME  scoreboard  published  annually  and  open  for  stakeholder  comment.  Consultations  and 
dialogue  between  SMEs  and  the  Commission  will  be  further  improved  through  the  SME 
Envoys, increased use of the Enterprise Europe Network and SME conferences, as well as in 
the context of social partner consultations. The Commission will further strengthen the ways 
it  obtains  data  and  opinions  from  SMEs  when  it  revises  its  guidelines  on  evaluation  and 
impact  assessment  in  2013  and  2014  respectively.  This  analytical  work  requires  a  good 
evidence base and statistical data to fully account for impacts on SMEs. 

40 COM (2012)746. See further Section 7 

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The governance and consultation mechanisms under the Small Business Act for Europe will 
play a key role in the work to minimise regulatory burden for SMEs and to ensure a broad-
based consultation and involvement of SME stakeholders, including the Member States.  The 
network  of  national  SME  Envoys  will  continue  to  contribute  in  a  significant  manner  to  the 
monitoring of the Commission Work Programme for impact on SMEs and to ensuring that the 
regulatory  burden  reduction  becomes  a  priority  in  the  Member  States  through  an  enhanced 
sharing  of  best  practices.  .  Regular  meetings  with  SME  associations  to  closely  monitor  the 
application  of  the  'Think  Small  First'  principle  in  the  forthcoming  Commission  initiatives 
identified  as  priorities  will  continue.  The  Commission  will  continue  to  strengthen  the 
Enterprise  Europe  Network  (EEN)  to  enhance  their  capacity  to  provide  explanations  of  EU 
legislation, obtain SMEs opinion on EU legislation via SME Panels.  

Taking the SME dimension into account is a shared mission.  The European Parliament and 
Council are invited to ensure not only that SMEs receive the benefit of EU legislation but also 
that no unnecessary burdens on SMEs are added in the EU legislative process. Member States 
are invited to use existing opportunities in EU legislation to lighten any burden on SMEs. 

__________________________________________________ 

Commission Staff Working Document 

SME Scoreboard 
SME priority files in the Commission Work Programme 2013  
Results of the Top-10 consultation  

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