Is the EU single market SME-friendly?

NEWS Published

COMMENT The European single market is supposed to be free from obstacles. People and goods, services and capital are to be treated equally - independent of which EU or ESS country they originate from. The single market is also a major reason why Swedish companies are generally very positive towards the EU.

Anna-Lena Bohm
Foto: SÖREN ANDERSSON

The European single market is supposed to be free from obstacles. People and goods, services and capital are to be treated equally - independent of which EU or ESS country they originate from. The single market is also a major reason why Swedish companies are generally very positive towards the EU.

But does the single market work as intended? Not without friction, says Anna-Lena Bohm, CEO of Uniguide AB, chair for the Confederation of Swedish Enterprise’s SME Committee and vice chair of BusinessEurope’s Entrepreneurship and SME Committee.

In the latter capacity she held a seminar on SME and digitalisation at the BusinessEurope conference on February 21 on the theme ”Is the EU single market SME-friendly? What does SMEs actually need?” Anna-Lena Bohm dedicated her address to a few important policy issues, such as VAT and geo-blocking.

EU as a whole is a product of its member countries, and they do not always agree on common rules and routines. This, of course, affects the workings of the single market.

VAT regulations in particular give many entrepreneurs a headache. Modern times brings modern products, and many fall somewhere in between a service and a product – or is, perhaps, both at once. Knowing which VAT rate to use is not always easy, especially for smaller companies.

The reason is that the member states controls their own taxes and VAT rates and so far there are no comprehensive proposals on joint regulation in that area.

  • It needs to get easier for small and mid-sized companies to pay the right amount of VAT in the right way, no matter in which country within the single market they are doing business. Today it is nearly impossible for a company without a large number of employed experts to administrate all the different taxes and VAT rates. For example, it is often hard to know where in the EU the end consumer actually lives. Furthermore companies need to handle all the VAT rates for every single member country and market – over eighty, all in all! Together with new methods of payment like PayPal, which makes it harder to know where the customer is located, aggravating the sale process even further.

Geoblocking is a term used in e-commerce and refers to different techniques to prevent online sales in a certain geographical area. At present geoblocking is permitted but there is proposals to ban the practice within the EU. The idea that e-commerce should be open for all within the EU is a good one. But if a company has to sell their goods to anyone and everyone within the EU it also means it has to take in to consideration all the consumer protection laws and taxes rules in every single member state. To a larger corporation this is usually not            a problem, but for smaller companies it makes for a heavy administrative burden.

  • The purpose of the single market is excellent and there is a possibility for SME companies to reach 500 million consumers. But if the single market is to work as intended, the member states have to agree on simplifying and standardising rules and routines. If geoblocking is removed many small and mid-sized companies run the risk of hitting a wall of new regulations and it is hard – and expensive! - for smaller companies to keep track of all the different rules and laws of the member states in order to do the right thing.

News

NEWS Published:

The recipe for a competitive EU

The success of the EU’s can be measured largely in the level of exchange in goods, services, people, and capital. The complete implementation of the Single Market is key. Much remains to be done in many areas, such as the free movement of services and labour, eliminating restrictive national processes, regulations and standards, and ensuring that common legislation is applied uniformly and consistently. As long as barriers to the four freedoms remain, European competitiveness will continue to be held back.
NEWS Published:

European Diversity is a strength

A central component of European cooperation is the diversity of ideas and solutions available to address the common problems of our time. Diversity serves the EU well and is vital for generating new approaches and innovation.
NEWS Published:

No Social Europe without jobs

High employment levels are a prerequisite for providing European citizens with strong social rights and good living standards. The only way to achieve this is through competitive companies and healthy economies in the EU Member States. These conditions are linked; improved living standards cannot be created without growth.
NEWS Published:

Climate and energy policy for sustainable growth

Climate change is one of the greatest challenges of our time, and so demands a global commitment and comprehensive solutions. The EU plays an important role in driving global measures and ambitions under the Paris Agreement of the UN Framework Convention on Climate Change.
NEWS Published:

Better regulation creates competitiveness

Improving the quality of European legislation is crucial to strengthening businesses’ competitiveness. This involves optimizing the regulatory framework and ensuring it brings cost-effective results and contributing to more growing businesses and jobs.
NEWS Published:

Leadership in global free trade

European companies need access to markets and open relations with the rest of the world. The EU must use its position as the largest trading bloc in the world to push for free trade, openness and competition on equal terms.
NEWS Published:

The Digital Single Market – prerequisite for data-driven growth

A Digital Single Market is crucial for the EU to make use of ever faster technological developments and achieve economies of scale, as well as innovation and growth opportunities both in Europe and globally. Harmonisation of digital rules, not least relating to consumer rights and VAT systems, is necessary to build such a market.
NEWS Published:

A well-functioning Single Market – Economic engine of the EU

The original purpose of the Single Market was to create a more favourable environmentfor entrepreneurship, the movement of people, competitiveness and trade.Achieving this would stimulate economic growth and increase prosperity for Europeancitizens. This must remain the point of departure for future efforts to developthe Single Market.
NEWS Published:

Trump cannot kill climate hope

As the USA now plans to exit the Paris Climate agreement, the EU and Sweden can have the greatest impact by demonstrating that combining competitiveness and high levels of prosperity with continuing to reduce climate emissions is possible. The entrepreneurial sector will drive climate issues forward, more than policy makers. Technical innovation is advancing quickly in many fields, reducing costs for new technology. Even US President Donald Trump cannot change these facts despite his misguided passion for coal, writes Maria Sunér Fleming, Head of Energy and Climate Policy at the Confederation of Swedish Enterprise.
NEWS Published:

Do we need a more social Europe?

Is a “Social Europe” the right medicine to stop growing populism? Can new social rights and social legislation foster growth and jobs? Is the fight against social dumping in fact a pretext for protecting domestic workers? What is the role of the EU and the Member States?
NEWS Published:

Trust in the European Union at a crossroads – Europaperspektiv 2017

Swedish universities have since 1998 cooperated in national networks within political science, economics and law. The purpose is to enhance the interest and knowledge in the European Union. Each year a book is published to disseminate knowledge to a broader audience. The book is divided into three main areas, political science, economics and law and each year grasps a specific topic. The topic of the year is trust, which incorporates trust both between member states but also between citizens and institutions.
NEWS Published:

How the Nordics achieved an integrated electricity market – Lessons for Europe?

Last November, the European Commission presented its package "Clean Energy for All in Europe". Among the proposals currently being discussed in the Council of Ministers and in the European Parliament are the draft legislation on the electricity market design, security of supply and governance of the energy union.
NEWS Published:

Close the ecocycle – recycling is better than burning

INNOVATION Anders Olsson is CEO for recovery business, Cassandra Oil, in Västerås, Sweden. He thinks that misdirected regulatory frameworks skew the way society manages plastic waste.
NEWS Published:

Free data flows in focus for the entrepreneurial sector

Global free trade, technical development and free data flows are entirely essential to export dependent Sweden. We are in the midst of a transformation to a thoroughly digitalised society where the possibilities for innovation are great and integrity needs equally great. Companies cannot conduct their business across national borders without moving data, as well – whether small or large, and in every industry. How can Sweden and Europe establish data-driven policy where all interests – personal, business, and societal needs – are preserved in the long term?
NEWS Published:

Plenty of red tape waiting to be cut

BETTER REGULATION Cutting red tape has long been a dream of Swedish companies. But the current coalition government (Social Democrats and the Green Party) has put little effort into this issue. Strong measures are needed now, argues a second report from the project A Challenged Sweden.
NEWS Published:

Red tape clogs the Single Market

RED TAPE Design and Lighting business, Watt & Veke, struggles with the administrative burden of selling to the EU Single Market. Right now, they’re having trouble with administering producer responsibility obligations and recycling electrical products. “Things are not as open as we would like,” says CEO Johan Pehrson.
NEWS Published:

Business community has an important role in the future EU

EU The Confederation of Swedish Enterprise and BusinessEurope remain active in working to impact the EU’s agenda for the future. “The way forward will build on its original ideas of openness, trade, and economic integration,” commented Jens Hedström in celebrating the Union’s 60th birthday.
NEWS Published:

Reaction to the UK’s decision to leave the EU

COMMENT “We regret that the UK Government has decided to take this step” says Director-General of the Confederation of Swedish Enterprise, Carola Lemne, “This is the beginning of a process entailing great risks for our companies and bringing few positive aspects with it”.
NEWS Published:

The VAT base and VAT rates - A contribution to the EU VAT Action Plan

TAXATION On the 7 of April 2016 the European Commission adopted the Action Plan on VAT - Towards a single EU VAT area. As a part of the action plan the Commission will present a proposal on VAT rates, with the aim of giving member states more freedom in this area. From a Swedish perspective this is the perfect time to further analyse and discuss how we want the VAT rules to be designed in the future.
NEWS Published:

Positive announcement on changed trading rules for emission allowances

EU The European Parliament voted on changes to the EU Emission Trading System for 2021 to 2030. The proposal includes an increase of emission allowances allocated free to industry, representing a victory for this globally competitive industry.