EU publications

Study on tax compliance costs for SMEs

Final report - Study

Publication metadata

This Study looks at how the propensity of small- and medium-sized enterprises (SMEs) to trade cross-border within the internal market is affected by administrative obligations through compliance with tax laws and how these can be improved. SMEs face proportionally higher costs than larger enterprises and the Study suggests potential improvements at national and EU level. The findings are underpinned by extensive quantitative and qualitative research, painting a picture of how the major taxes (notably CIT, VAT and payroll taxes) impose a multiplicity of obligations. These are issues for all... enterprises but SMEs, with limited internal resources, often struggle and more frequently seek costly outsourcing of the process. The Study draws attention to the manner in which differing national tax requirements can create hurdles to cross-border activities in the Internal Market which SMEs are least equipped to handle. In its recommendations, the Study looks first at measures which can be taken at EU level and where the Commission’s right of initiative can be used to improve the environment for Europe’s SMEs. It then identifies how individual Member States can encourage SMEs by making it easier and less costly to manage their tax obligations and identifies good practice in several Member States.