IFAC, IASB, FEE, EU and other Updates

The Court Of Justice Of The European Union (CJEU) Case On Tax Advisors

The CJEU has just published a judgement of big importance to our sector. The dispute concerned, a British company with branches in Belgium and the Netherlands providing finance consultancy, tax consultancy and accounting. The company in question had a German company as client, whom they advised on tax procedures in Germany and they assisted in the preparation of its turnover tax return document. That document was received by the German tax office at the beginning of 2012. The tax office refused to accept the consultancy as the authorised representative of its German client. The reason given was that X was not authorised to provide professional assistance in tax matters under German law because it lacked the required professional qualifications.

The German law stipulates in fact that only consultants and advisers who provide professional assistance in tax matters are allowed to represent or assist their principals or customers before the tax authority. Consultants and advisers that are recognised are amongst others: recognised tax advisers, German lawyers, established European lawyers, accountants and certified auditors.

The British consultancy challenged the decision of the German tax authority in front of the CJEU arguing that it went against the Services Directive and the Professional Qualifications Directive. The CJEU decided the following; a Member State which defines the conditions of access to the activity of professional assistance in tax matters may not restrict the freedom to provide services of a tax consultancy company just because the company doesn’t have the relevant qualifications in the host Member State. Of course the condition is that the representation has to be formed in accordance with the law of the Member State where the company is established. Judgements usually deal with a very specific topic but since they can often be interpreted in a broader way, their effects are important for the entire sector.

Please find the entire judgement here: http://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1450716686330&uri=CELEX:62014CJ0342

ECB Survey Shows Improved Access To Finance For SMES

The European Central Bank (ECB) published results of its periodic survey on the Access to Finance of Enterprises (SAFE) in the Eurozone. The data show that the 11,226 SMEs surveyed were less concerned about access to finance to make their business grow, and were mostly concerned about finding customers.

According to the results from the 13th round of the Survey on the Access to Finance of Enterprises (SAFE), euro area SMEs were less concerned about access to finance as an impediment to their business compared with other factors related to their business activity. Indeed, “Access to finance” was considered the least important concern for euro area SMEs (11%) while “Finding customers” remained the dominant one (25%), followed by lack of “Availability of skilled labour”, increases in “Costs of production and labour”, “Competitive pressures” and the presence of “Regulation”.

Euro area SMEs reported, in net terms, an increase in turnover (17%) which was widespread across most countries. Despite an environment of subdued developments in commodity prices and labour costs, a large proportion of SMEs continued to signal rising labour and other costs (41% and 34% respectively), but less so than in the previous survey round. In net terms, only 1% of SMEs stated that profits have declined, down from 10% in the previous round.

Looking at the need (demand) for external sources of finance, euro area enterprises reported that their need for bank loans and overdrafts had increased, but at a slower pace than in the previous survey round. On balance, 1% of euro area SMEs reported an increase in their external financing needs for bank loans, down from 3% in the previous round. For the second consecutive time, SMEs reported an increase in the availability of bank financing (loans and bank overdrafts). Across firms’ size, micro enterprises were the only firm size class to still report a net deterioration, but this was considerably lower than in the previous survey round.

Turning to the factors affecting the availability (supply) of external financing for SMEs, this was mainly attributed to increased willingness on the part of banks to provide credit (11%, from 9%). Furthermore, the net percentage of SMEs reporting a negative effect on their finances as a result of the worsening of the general economic outlook has further declined.During the period from April to September 2015, 30% of all SMEs applied for a loan. Of these, 66% were fully successful in their loan applications and 9% reported that their application had been rejected. The overall financing obstacles indicator has declined slightly to 12%.

On balance, SMEs reported that terms and conditions for bank loans had improved, but less than in the previous survey round. In line with the improvement in the availability of bank loans, euro area SMEs reported, on balance, declining interest rates and increases in the available size and maturity of loans. However, a positive, but declining, net percentage of SMEs continued to indicate a tightening in the collateral and other requirements of banks.

Included in Annex 1 to the report is a specific reference to the outcome of applications for bank loans by SMEs across the euro area’s smallest countries including Malta.

A copy of the full report is available online as follows: https://www.ecb.europa.eu/pub/pdf/other/accesstofinancesmallmediumsizedenterprises201512.en.pdf?2c146594df6fe424c7adb001e1306c73

0.00 avg. rating (0% score) - 0 votes