Eight years ago, 21 tax and legal measures to help small and medium-sized enterprises (SMEs) survive changes of ownership were set out in a European Commission Recommendation. However, fewer than half of the 21 measures are in place in the Member States, according to a report published today.

The report, published by the European Commission, instructs Member States to step up their efforts to create an environment favourable to business transfers. It found that implementation across the EU is varied. Greece implemented just two of the 21 measures; the Netherlands performed best, with 16 measures in place.

According to the Commission, an estimated third of all EU companies will change hands over the next 10 years (from 25-40%, depending on the Member State). This means an average of 610,000 SMEs will change hands each year (potentially affecting 2.4 million jobs).

The recommendations of the report include the creation of a European sellers and buyers database/marketplace, to link up existing national databases and encourage countries that do not yet have such data bases to set them up, and also launching publicly initiated support programmes and research on business transfers.

The Commission's 1994 Recommendation addresses special rules for inheritance and gift taxes, transfers to third parties, transfers to employees, tax relief for early retirement and tax relief on money that is reinvested in another SME.

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