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MEMO/09/474

Brussels, 22 October 2009

Cutting red tape – Overview of reduction measures and illustrative examples

(see IP/09/1562 )

The following list gives an overview of examples of measures for reducing administrative burden (already adopted, proposed by the Commission, shortly to be proposed by the Commission)

1. Examples of measures that have already been adopted:

  • The ‘VAT package’ introduces new rules for services which will mean that business-to-business services will be taxed in the Member State of the customer. This should act as an incentive for businesses to provide services throughout the EU. The package also includes a mini one-stop shop for telecom, broadcasting and e-commerce services for businesses established within the EU and a new procedure for claiming VAT refunds for businesses not established in the Member State in which the VAT was incurred.

  • Cutting accounting costs: Around 340 000 Small and Medium-sized Enterprises (SMEs) can apply less burdensome accounting and auditing rules since 2006.

  • Fruit and vegetable producers spend about two hours in labelling and grading a ton of produce. A new Regulation (1221/2008) replaces 26 marketing standards with a General Marketing Standard. Labels will indicate origin but no longer class, size or variety. This measure can save up to € 970 million.

  • Only the winner of a public tender needs to present certain documents to prove that he has the right to make the bid: In procurement procedures usually all candidates are required to submit supporting documents concerning criteria that would exclude them from the tender costing them on average € 100. Now, 4 out of 5 participants to a tender would no longer be obliged to do so.

  • Pharmaceutical companies will no longer need to report each small change in the company's pharmaco-vigilance system up to hundreds of times (once for each medicine and each national authority), but will keep a continuously updated  master file on site for inspection. Paperwork will also be reduced by the suppression of duplicative transmissions of adverse drug reactions, which cost € 200 per report.

2. Examples of measures that have been proposed by the Commission and are waiting for approval by EU Member States and the European Parliament:

  • With 18 billion VAT invoices annually in Europe, the switch to a fully electronic invoicing system would significantly save time and money for more than 22 million taxable enterprises. The Commission proposes to remove obstacles to company’s electronic billing, in particular additional requirements in the Member States to make invoices VAT compliant. The maximum mid-term reduction potential is estimated at € 18.4 billion if all businesses send all their invoices electronically.

  • Further to a Commission proposal (February 2009) micro-entities (max 10 employees) no longer need to present annual accounts in line with the EU regime. It is left to the Member States to define the appropriate rules. The Commission proposal would allow each of the 5.4 million micro-enterprises in Europe to save around € 1170 a year. This complements the 2006 reform for cutting accounting costs (see above).

3. Examples of measures which the Commission will propose over the next weeks and months:

  • EU accounting and auditing rules for Small- and Medium-Sized Enterprises (SMEs) will include a simplified content of the structure of the balance sheet, the profit and loss account and the notes to the accounts. Adoption is planned by the end of 2010.

  • Easing recognition as “a regular shipping service” for enterprises shipping goods between two ports in the EU. A new database will simplify initial registration procedures and subsequent assignment of vessels to the service. Presentation is planned by the end of this year.

  • Exempting craft businesses from the application of work and rest times as up to 100 km (as already done for farmers) and consequently both craft businesses and farmers from the tachograph requirement for up to 100km

  • Statistical reporting for small hotels made easier: Accommodation providers (such as hotels, B&Bs) with less than 10 beds (or less than 20 beds in many Member States) will be exempted from statistical reporting obligations. Instead, appropriate statistical estimation techniques will be used. Adoption is planned for the fourth quarter of 2009.

  • Reducing reporting requirements on road transport for Malta and further islands as appropriate

Some general observations on the impact of administrative burdens and how they arise:

Few information obligations create the lion’s share

The two most important priority areas (Taxation and Company Law) account for more than 80 % of the total burden measured as they cover most of the businesses in the EU. They also represent by far the largest savings in administrative costs already proposed by the Commission.

Member States account for 32 % of administrative burdens of EU origin

It is estimated that 32 % of administrative burdens of EU origin are the result of Member States going beyond what is required by the EU text (the so-called gold-plating) and/or because of inefficient administrative procedures at the national level.

The following table an overview of the reduction measures in each priority area adopted by the legislators, proposed or under preparation by the Commission as well as the expected savings.

Priority Area

Administrative Burden
(in €)

Sectoral Reduction Figure (in €)

Reduction
as % of Burden

Agriculture/ Agricultural Subsidies

5 289 700 000

-1 891 400 000

-36 %

Annual Accounts / Company Law

14 589 100 000

-8 274 500 000

-57 %

Cohesion Policy

929 100 000

-222 600 000

-24 %

Environment

1 180 600 000

-242 100 000

-21 %

Financial Services

939 600 000

-141 600 000

-15 %

Fisheries

73 900 000

-33 400 000

-45 %

Food Safety

4 073 300 000

-1 281 800 000

-31 %

Pharmaceutical Legislation

943 500 000

-154 600 000

-16 %

Public Procurement

216 300 000

-60 100 000

-28 %

Statistics

779 500 000

-328 100 000

-42 %

Taxation / Customs

87 005 300 000

-26 334 200 000

-30 %

Transport

3 861 700 000

-748 200 000

-19 %

Working Environment / Employment Relations

3 879 200 000

-659 600 000

-17 %

Total

123 760 800 000

-40 372 200 000

-33 %

For further details on each of the reduction measures, please see Annex C of the Communication.

The reductions stated in the table are from the following measures:

Agriculture:

  • Simplifying formalities for farmers benefiting from the "Single Payment Scheme"

  • Reducing farmers' book-keeping and inspection costs stemming from "cross-compliance" obligations

  • Reducing the number of agricultural products for which a licence is necessary

  • Simplifying egg labelling

  • Reducing inspection costs stemming from marketing standards for fruits and vegetables

  • Suppression of administrative burdens linked to special support schemes

  • Reducing information obligations for payments to farmers by abolishing the 10-month-rule

  • Increasing the tolerable risk of errors for funds used in rural development.

Annual Accounts:

  • Allowing more small- and medium-sized enterprises (SMEs)to benefit from simplified accounting/auditing regimes

  • Limiting the amount of information in the notes to the accounts for SME

  • Simplifying the obligations related to changes to the capital of public limited liability companies

  • Abolishing the obligation to provide an independent expert’s report on merger or division in case of waiver

  • Simplifying the reporting requirements in case of a merger or division

  • Allowing Member States to exempt micro-enterprises from accounting obligations

  • Simplifying the publication and translation of financial information

  • Modernising EU accounting directives through a general overhaul

  • Simplification of reporting of companies in the form of a Societas Europaea.

Cohesion Policy:

  • Reducing administrative burdens for projects co-financed by EU structural funds and regarded as revenue-generating

  • Simplifying the management/control of operations co-financed by the ESF and the ERDF

  • Simplifying and clarifying general provisions on the ERDF, ESF and the Cohesion Fund

  • Developing, at national / regional level, central clearing houses for Cohesion Policy reporting

Environment:

  • Simplifying procedures for controlling waste shipments

  • Simplifying the regime for integrated pollution prevention and control

  • Harmonise national information obligations on waste electrical/electronic equipment and ensure register interoperability

  • Streamlining reporting obligations on substances depleting the ozone layer

  • Simplifying authorisation procedures for the placing of biocidal products on the market

  • Improving coordination between IPPC and Seveso inspections by national authorities

  • Improving coordination between IPPC and Seveso inspections by national authorities (Implementing Provisions

  • Encouraging Member States to update IPPC permits rather than demanding their renewal

  • Simplifying and streamlining the notification system for shipments of waste

  • Introducing online systems through which treatment facilities can issue vehicle destruction certificates .

Financial Services:

  • Revising capital and solvency requirements for credit institutions

  • Reducing administrative burdens on “Undertakings for Collective Investment in Transferable Securities” (UCITS)

  • Simplifying rules on large exposures of credit institutions

  • Revising mandatory and solvency capital requirements for insurance and reinsurance companies (Solvency II)

  • Abolishing the obligation to report on initial capital, own funds and investment limitation for e-money service providers

  • Reducing reporting duties on cross border payments

  • Guidelines for harmonised format and frequency of reporting by credit institutions and investment firms.

Fisheries:

  • Using electronic logbooks for vessels above 15 m in length

  • Extending the use of electronic logbooks to vessels between 10 and 15 m in length

  • Introducing a standard method for fishing inspections across the EU

Food Safety

  • Abolishing authorisation procedures and simplifying labelling requirements for feed materials

  • Setting a common and shorter authorisation procedure for food improvement agents

  • Simplifying ovine identification procedure

  • Eliminating veterinary border inspections posts between the EU and Switzerland

  • Streamlining legislation on the production, marketing and use of animal by-products

  • Simplifying general food labelling and nutritional labelling

  • Lowering the number and length of inspections thanks to Satellite tracking of animal transport

  • Reducing the number of veterinary checks on intra-community maritime trade.

Pharmaceutical Legislation:

  • Simplifying the procedure to report "Variations" (changes) to medicines already authorised for marketing

  • Simplifying EC procedures concerning residue limits of pharmacologically active substances in foodstuffs of animal origin

  • Simplifying Pharmaco-vigilance reporting obligations

  • Simplifying the application to commence a clinical trial required to test new medicines

  • Reducing administrative burdens resulting from the veterinary medicines legislation;

Public Procurement:

  • Submitting tender documents for public procurement only by the winning enterprise and only once

  • Creating a 'Virtual Company Dossier' for businesses in public procurement procedures

  • Creating an online information database on business certificates for public procurement procedures.

Statistics:

  • Reducing reporting requirements for compiling statistics on intra-EU trade

  • Reducing reporting requirements for Structural Business Statistics

  • Reducing reporting obligations on pig livestock and meat

  • Reducing reporting obligations on bovine livestock and meat

  • Reducing reporting requirements on industrial production in the EU

  • Reducing reporting requirements for statistics on Information Communication Technologies

  • Reducing reporting requirements for producing Short-Term Statistics

  • Reduce the number of respondents reporting intra-EU trade

  • Reduce the administrative burden for businesses stemming from Structural Business Surveys

  • Reduce the administrative burden on businesses by introducing enhanced eGovernment solutions

  • Reduce reporting requirements for statistics on tourism

  • Update the statistics on fruit trees in line with today’s needs

  • Introduce improvements & simplifications to the legislation relating to statistics on sea transport

  • Reducing reporting requirements on road transport for Malta and further Islands as appropriate

Taxation / Customs:

  • Suppressing, in the VAT refund procedure , the obligation to complete paper forms in the language of the MS of refund

  • Simplifying the rules concerning the place of supply of services

  • Modernising customs procedure and especially switch to a fully electronic customs procedure

  • Adapting the frequency of recapitalisation statements on cross-border transactions and switching to an electronic procedure

  • Suppressing additional requirements on invoices and enabling wider use of electronic invoicing

  • Setting up a one stop shop and increasing thresholds of special schemes for SMEs and distance sales

  • Simplifying the use of VAT Grouping

  • Simplifying Regular Shipping Services

  • Modernising customs procedure by and especially switch to a fully electronic customs procedure

Transport:

  • Exempting craft businesses from the application of work and rest times as up to 100 km (as already done for farmers) and consequently both craft businesses and farmers from the tachograph requirement for up to 100km

  • Reducing time spent to register and transmit information on road transport by the introduction of digital tachographs and simplifying the use of digital tachographs and improving the "form of activities"

  • Facilitating cross-acceptance of rail-rolling stock

  • Simplifying EU legislation on the inland transport of dangerous goods

  • Abolishing the notification of transport tariffs and alleviating the obligation to keep documentary evidence onboard

  • Simplifying obligations for road haulage and road passenger transport

  • Reducing formalities in Short Sea Shipping

Working Environment / Employment Relations:

  • Improving the guidance for businesses on Health and Safety of workers

  • Improve the efficiency of regulations concerning the European Works Councils

  • Easing the drafting of Risk Assessments on Health and Safety in businesses

  • Improving the guidance for construction site enterprises

  • Improving ways to handle key information on carcinogens

More information


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