These are just some of the consequences of the law of 18 December 2015 transposing the European
Directive 2013/34/EU on the annual financial statements, consolidated financial statements and
related reports of certain types of undertakings into Belgian law.
Thanks to this law and accompanying Royal Decree, administrative burdens for SME’s will decrease
Directive 2013/34/EU fits into the overarching Small Business Act for Europe dating from 2008 by
means of which the EU wants to create a lenient climate for SME’s in Europe.
The main objective consists of instigating the entrepreneurial spirit in Europe by (i) lowering
administrative burdens and (ii) by creating favourable fiscal measures.
Consequently, both elements can be found in this law and are, as such, discussed separately
2. Administrative simplification for some companies
The modifications are two-fold: first of all the thresholds for small enterprises have been
increased and secondly a new category of enterprises, the "micro-entity", has been
Increased thresholds for small enterprises
A small enterprise can choose to use condensed financial statements and therefore it can benefit
from a simplified administration.
In order to be qualified as a "small enterprise", a company has to make sure it doesn’t
exceed more than two out of three legal thresholds.
The transposing law has raised these thresholds, laying down, as of 1 January 2016, the following
||Thresholds until 31.12.2015
||Thresholds as of 1.01.2016
|Annual turnover (excl. VAT)
|Balance sheet total
Annual averagenumber of employees
Furthermore, the exception regarding the entities that, on average, have more than 100
employees, has been removed. If a company remained below the first two thresholds but had more than
100 employees, it automatically became "large". As of 1 January 2016, these companies
with over 100 employees will only be "large" if yet another threshold is exceeded.
The consequence of this threshold increase is that, as of 2016, more ‘small’ companies will
remain below these new thresholds.
Furthermore, a lot of companies will most likely remain "small" for a longer period of
Indeed, the transposing law states that if two of the aforementioned thresholds are exceeded,
this will only have implications (and will therefore lead to requalification) if the thresholds are
exceeded during two consecutive financial years (consistency principle).
Introduction of micro-entities
The creation of micro-entities is also part of the European initiative to lower the burdens of
As of 1 January 2016, the micro-entity is introduced. The criteria, which have to be met at the
end of the year in order to benefit from the related advantages, are:
||Thresholds as of 1 January 2016
|Annual turnover (excl. VAT)
|Balance sheet total
|Annual average number of employees
In order to be considered a micro-entity, no more than one threshold can be exceeded.
On the other hand, when more than one threshold is exceeded, this will only have consequences if
this occurs during two consecutive financial years. In other words: if a company exceeds more than
one threshold in year 1, it can still correct this in year 2 without losing the qualification of
There is, however, one major exception. If a company meets the conditions as set out above, but
is a parent company or subsidiary, it can never be a micro-entity.
The Commission on Accounting Standards suggests that micro-entities should be considered a
subcategory of small enterprises. This has also been written down in the law, in this way when an
article refers to a ‘small’ enterprise, this will also cover the micro-entities, unless explicit
reference of the contrary.
The most important consequence of this transposing law and the creation of the micro-entity is
that this enterprise is exempt from making an annual report and only has to provide notes to the
annual accounts to a limited extent.
The way the micro-entities will have to draw up their annual accounts is described in the
accompanying Royal Decree.
3. Fiscal measures
The qualification as ‘micro-entity’ does not only entail administrative simplification.
The transposing law also introduces two favourable fiscal measures for these micro-entities.
The first measure determines that, as of assessment year 2016, people wanting to acquire shares
of a starting micro-entity, can benefit from a tax reduction of 45% (only 30% in case of
acquisition of shares of ‘small’ entities).
However, there are some limitations to this advantage; it is only for contributions in cash and
it is only granted for participations up to EUR 100,000.00 per taxable period.
The second favourable tax regime that is instated concerns the payment of the withholding tax.
It is provided that micro-entities not older than 4 years only have to transfer to the Treasury 80%
of the withholding tax that they levy on salaries that they pay starting from 1 August 2015 to
their employees (90% for small enterprises).
The Belgian government wanted to send a clear signal to the SME’s. From now on, these entities
are exempt from certain administrative duties and fiscal burdens so that they can focus on their
core task: managing the company.
The legal changes provide a lenient regime for existing and future entrepreneurs and are, as
such, more than welcome.