The Accounting Directive’s transposition: the impact on Belgian corporate law
25/09/2015

Although the deadline to transpose the Accounting Directive 2013/34/EU into Belgian law elapsed on 20 July 2015, the Belgian legislator failed to transpose the Accounting Directive on time. Nevertheless, Belgium’s Council of Ministers did approve a preliminary draft Act and a preliminary draft royal decree on 19 June. Subject to the Council of State’s further advice, it is likely that the transposition into Belgian law will take place in the coming months.

The Accounting Directive is intended to make the administrative burden on companies proportionate to their size and to improve the economic environment for SMEs. From a corporate law perspective, the Accounting Directive’s transposition is most likely to result in the following amendments to the Belgian Companies Code.

1. Change in the definition of an SME

Currently, Article 15, §1 of the Belgian Companies Code states that if a company exceeds at least two of the following three thresholds, then such company will qualify as a large company and not as an SME; these thresholds concern the company having: (i) an annual turnover of EUR 7.3 million; (ii) a balance sheet total of EUR 3.65 million; and (iii) 50 employees. Moreover, any company having more than 100 employees will automatically not qualify as an SME, even if the thresholds on annual turnover and balance sheet total have not been met.

The Accounting Directive raises these thresholds to an annual turnover of EUR 8 million and a balance sheet total of EUR 4 million and gives the Members States the right to increase these thresholds further to an annual turnover of EUR 12 million and a balance sheet total of EUR 6 million.

Based on the comments already provided by the Accounting Standards Commission and the Central Economic Council, the Belgian legislator will probably raise the current thresholds to an annual turnover of EUR 9 million and a balance sheet total of EUR 4.5 million. The threshold of 50 employees will remain unchanged. However, since the exception that any company having at least 100 employees cannot qualify as an SME is not in compliance with the Accounting Directive, then such an exception will probably be deleted from Article 15 of the Belgian Companies Code.


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2. Calculation method of the thresholds

In addition to the increase in these thresholds, the Accounting Directive changes the way the thresholds are calculated.  While under current legislation, an affiliate company only qualifies as an SME in the event that the Article 15 (of the Belgian Companies Code) thresholds are met on a consolidated basis, the Accounting Directive provides that the thresholds should be calculated on an individual basis and not on a consolidated basis. Article 3 of the Accounting Directive provides for two exceptions in which the national legislator can still opt for a calculation on a consolidated basis; these are for parent companies and for affiliates that have been established “for the sole purpose of avoiding the reporting of certain information”.

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3. Micro-undertakings

The Accounting Directive further offers the Member States the right to implement rules for a subcategory of small companies called "micro-undertakings". Micro-undertakings are companies that at the balance sheet date do not exceed at least two of the following three criteria: (i) a balance sheet total of EUR 350,000; (ii) a net turnover of EUR 700,000; and (iii) an average workforce size of 10 employees over the financial year.

While SMEs already have less rigid obligations regarding accounting (they can prepare an abridged form of annual accounts (Article 93 of the Belgian Companies Code) and are also exempt from both preparing full annual accounts (Article 94 of the Belgian Companies Code) and appointing a statutory auditor (Article 141, 2° of the Belgian Companies Code)), the administrative burden for micro-undertakings is even lower since they will only have to provide a limited number of explanatory notes together with their balance sheet and income statement. Furthermore, both micro-undertakings and SMEs are no longer required to prepare a social balance sheet.

The Accounting Directive states that investment undertakings and financial holding undertakings should be excluded from benefitting from the simplifications applying to micro-undertakings. Moreover, the Central Economic Council has stated that group subsidiaries should also be excluded from the definition of micro-undertakings.

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4. Conclusion

Although it is not fully clear yet how the Accounting Directive will be transposed into Belgian law, it seems that, in any event, the number of SMEs will dramatically increase due to the amended definition of an SME and the calculation method used. Furthermore, it is also clear that for this larger group of SMEs, the administrative burden, especially when it comes to accounting obligations, will significantly decrease.

Zie ook : Altius ( Mr. Adriaan Dauwe )

[+ http://altius.fb.mi.addemar.com/c623/e31525/h9b2e1/t0/s0/index.html]

Mr. Adriaan Dauwe Mr. Adriaan Dauwe
Associate
Adriaan.Dauwe@altius.com

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