ECORYS & MAZARS Study for the European Commission

Each year, millions of domestic firms, and over 100,000 that do business cross-border, carry out various standard government procedures, including business registrations and tax returns. These procedures differ widely in design and cost across Europe, increasing costs and barriers particularly for businesses operating across borders.

The objective of this study was to identify and compare the formalities associated with ten common administrative procedures, and assess the costs related to formalities and procedural steps: 

• Four business registration procedures: general; VAT; business income tax; as employer;
• Three tax returns: VAT; business income; wage related (payment of social security and employee income withholding tax); 
• Three other procedures: VAT refund request; notification of the start and the end of employment relationships.

 An inventory of the formalities and procedures was made for all 28 EU Member States. Data on associated costs were collected through a business survey in 14 Member States and then extrapolated to the EU28. The main costs are for advice, certification, translation as well as costs resulting from requirements to submit documents in person.  

The study found that for cross-border businesses, these costs can be over 50% higher than for firms doing business domestically. Cost reductions could be achieved by completely eliminating procedures, or by combining several procedures. Another major potential cost saving could be achieved by making more e-submission procedures available.

Find the study report here.