Reducing bureaucracy: higher thresholds for accounting and financial reporting

The German federal government has passed a draft law to raise the thresholds for financial reporting and accounting. This is intended to reduce bureaucratic costs for SMEs by €650 million.

This article is part of the special feature on bureaucratic madness in the skilled trades.

Federal Justice Minister Marco Buschmann (FDP) announced it at the North Rhine-Westphalia Chamber of Skilled Crafts, and now the federal government has decided: The monetary thresholds for determining company size categories under commercial accounting law are to be raised by approximately 25 percent . "Raising the thresholds will lead to less paperwork and more entrepreneurial freedom to focus on actual work and value creation," says Buschmann.

Small and medium-sized enterprises (SMEs) are expected to particularly benefit from this . According to Buschmann, raising the thresholds for accounting and financial reporting will reduce bureaucratic costs for 52.000 companies by approximately €650 million annually. "That's an average of €12.500 per company." According to the Federal Ministry of Justice, nearly 11.200 small businesses will be classified as micro-enterprises in the future. These companies would thus benefit from a reduction in costs of over €93 million per year.

Significantly fewer obligations

The thresholds define the size of a business as defined by commercial accounting law . The categories are "micro-enterprise," "small enterprise," "medium-sized enterprise," and "large enterprise." The scope of accounting and reporting obligations depends on the company size: a small business has significantly fewer obligations than a large enterprise. Due to the increase, many companies will fall into a lower size category.

"Raising the legal thresholds for accounting and financial reporting is a step in the right direction ," explains Holger Schwannecke . Craft businesses, which are subject to comprehensive accounting and reporting obligations as limited liability companies (GmbH) or limited partnerships with a limited liability company as general partner (GmbH & Co. KG), would be relieved of this burden, according to the Secretary General of the German Confederation of Skilled Crafts . "Less bureaucracy and lower costs are the right answer to the current strain on craft businesses."

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Relieve all craft businesses

Schwannecke demands: "The adopted draft law must therefore serve as a model for further measures that encompass and relieve the burden on all craft businesses . The Bureaucracy Relief Act provides the right framework for this. There are plenty of proposals from the craft sector. Now it's time to implement them consistently ."

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