top of page

New Thresholds for SMEs and Micro-Enterprises: Adapting to Economic Realities

Updated: May 17



Due to increasing inflation, many companies that have only experienced slight growth have found their classification as SMEs or micro-enterprises challenged by surpassing previous financial thresholds. Recent legislative changes, effective since the beginning of 2024, address this issue by revising the thresholds upwards for the first time since 2015, thereby allowing more companies to benefit from certain tax incentives.


Details of the Adjustments to Thresholds


From January 1, 2024, the criteria to qualify as an SME or micro-enterprise have been adjusted as follows:


For SMEs:


  • Turnover excluding VAT: from 9 million euros to 11.25 million euros.

  • Total balance sheet: from 4.5 million euros to 6 million euros.

  • Average number of workers: remains at 50.


For Microenterprises:


  • Turnover excluding VAT: from 700,000 euros to 900,000 euros.

  • Total balance sheet: from 350,000 euros to 450,000 euros.

  • Average number of workers: remains at 10.


These adjustments take into account the non-indexation of thresholds in the face of high inflation, offering a more realistic framework for today's businesses.


Impact on HR Practices and Tax Advantages


These new thresholds will allow a greater number of employers to benefit from tax exemptions, such as the reduction in professional withholding tax for start-up companies, as well as benefits related to research and development. It is essential for companies that are part of a group to calculate these thresholds on a consolidated basis.


Implementation and Important Considerations


The new criteria are in effect for fiscal years starting after December 31, 2023. However, companies must be aware of the delayed effect of these changes, which requires that the criteria be met for two consecutive fiscal years before a company can benefit from statutory changes.


Conclusion


It is crucial for every employer to regularly reassess their company's status in light of these new thresholds. This legislative revision offers an opportunity for businesses to maximize their tax benefits in a changing economic landscape.


Comentários


bottom of page