The plan is unlikely to save small businesses money and risks distorting the market and reducing transparency, according to the UEAPME, the European craft and SME employers' organisation.
The SME group said it was "unimpressed" by the Commission's attempt to ease the administrative burden faced by small enterprises, as filing annual accounts is a fundamental tool for small businesses to prove their financial solidity.
"The suggestion to exempt micro-enterprises from filing accounts is a questionable proposal. Public authorities will still require those data for fiscal and statistical reasons. Banks will keep asking for financial information to check creditworthiness. Suppliers will want to know if the business they are dealing with is solvable and reliable in order to avoid the plague of late payments," said UEAPME.
The organisation said the proposal goes against single-market principles, creating an uneven playing field between businesses operating in different member states, only some of which will use the exemption.
UEAPME instead recommended simplifying existing harmonised accounting rules as a "more viable and less distortive alternative".
"Cross-border consistency will no longer be guaranteed, and member states will be tempted to use this measure to protect their own micro-enterprises to the detriment of fellow European competitors," it said in a statement.
Launching the proposal last week, the Commission said micro-entities are primarily engaged in business at local or regional level, with little or no cross-border activity.
Andrea Benassi, secretary-general of UEAPME, said the Commission should simplify existing harmonised accounting rules and apply them to all businesses. "This is more in line with better regulation and with the 'think small first' principle that the Commission pledged to put at the heart of its SME policy with the Small Business Act," Benassi said.
