Abstract
This chapter presents a brief overview of the importance of small and medium-sized enterprises (SMEs) and highlights their key role for the EU economy and the major economic issues and obstacles they are facing. SMEs occupy a very important position in the EU economy, mainly in the area of growth and employment. However, the group of SMEs in the EU is very heterogeneous and differs significantly from large enterprises (LEs). Not only do they differ in size, but they also perform different activities, have different needs and require different resources. Currently, SMEs already face special rules in the area of accounting and financial reporting in comparison with LEs; however, SMEs also face specific problems and have specific needs in the area of practical international taxation issues. As studies show, SMEs face higher compliance costs of taxation in the internal market, compliance costs connected with transfer pricing and the problem of accessibility of cross-border loss compensation. Taking into account the existing environment in which SMEs are operating, this book provides a deep analysis of SMEs’ compliance costs with respect to transfer pricing. Based on the results of empirical research, this work presents the critical concerns; however, the book also presents suggestions on simplifying transfer pricing rules for SMEs. This book is the result of a 3-year project (No. 15-24867S “Small and medium-sized enterprises in global competition: Development of specific transfer pricing methodology reflecting their specificities” granted by the Czech Grant Agency.
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Notes
- 1.
European Commission, Company Taxation in the Internal Market (COM(2001)582 final), and also in Internationalisation of European SMEs (2010) or Modern SME policy for growth and employment (COM(2005)551 final), European Commission. Furthermore, in Report on Small and Medium Enterprises and Transfer Pricing, EU Joint transfer pricing forum, European Commission (2011), and in Annual reports on European SMEs 2013, 2014, 2015 and 2016.
- 2.
European Commission, Internationalization of European SMEs, 2010. Directorate-General for Enterprise and Industry.
- 3.
European Commission, Observatory of European SMEs, analytical report, 2007. Directorate-General for Enterprise and Industry.
- 4.
European Commission, Models to reduce the disproportionate regulatory burden on SMEs. Report of the Expert Group. Further, European Commission, 2007: Simplified tax compliance procedures for SMEs. DG Enterprise Publications.
- 5.
European Commission, Results of the public consultation on the TOP10 most burdensome legislative acts for SMEs. http://ec.europa.eu/DocsRoom/documents/10036/attachments/1/translations
- 6.
OECD (2014). Model Tax Convention. http://www.oecd.org/ctp/treaties/model-tax-convention-on-income-and-on-capital-2015-full-version-9789264239081-en.htm
- 7.
OECD (2017). Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations. http://www.oecd.org/tax/transfer-pricing/oecd-transfer-pricing-guidelines-for-multinational-enterprises-and-tax-administrations-20769717.htm
- 8.
Examples are European Commission, Modern SME Policy for Growth and Employment. COM(2005)551 final. European Commission, Company Taxation in the Internal Market. COM(2001)582 final. European Commission, Implementation of the community Lisbon programme – Communication from the Commission to the Council and the European Parliament – The Contribution of Taxation and Customs Policies to the Lisbon Strategy. COM(2005)532 final. European Commission, Tackling the corporation tax obstacles of small and medium-sized enterprises in the Internal Market – outline of a possible Home State Taxation pilot scheme. COM(2005)702, and also in Internationalisation of European SMEs or Modern SME policy for growth and employment (COM(2005)551 final), European Commission.
- 9.
European Commission, A “Small Business Act” for Europe. COM(2008) 394 final. http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52008DC0394&from=EN
- 10.
A major landmark in tracking the implementation of the Small Business Act.
- 11.
Smart growth (Digital agenda for Europe, Innovation Union, Youth on the move), Sustainable growth (Resource efficient Europe, An industrial policy for the globalisation era) and Inclusive growth (An agenda for new skills and jobs, European platform against poverty). For more details see: http://ec.europa.eu/europe2020/europe-2020-in-a-nutshell/flagship-initiatives/index_en.htm
- 12.
European Commission. Commission Decision of 22 December 2006 setting up an expert group on transfer pricing (2007/75/EC) http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:032:0189:0191:EN:PDF
- 13.
EU JTPF, European Commission, Report on Small and Medium Enterprises and Transfer Pricing. http://ec.europa.eu/taxation_customs/sites/taxation/files/resources/documents/taxation/company_tax/transfer_pricing/forum/jtpf/2011/jtpf_001_final_2011_en.pdf
References
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Solilova, V., Nerudova, D. (2018). Introduction. In: Transfer Pricing in SMEs. Contributions to Management Science. Springer, Cham. https://doi.org/10.1007/978-3-319-69065-0_1
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