Insights European Parliament Internal Market Committee calls for more innovative single market, stripped of unjustified barriers

MEPs have voted for proposals to “unleash the full potential of the single market to the benefit of consumers, employees and businesses…

Priorities include eliminating unjustified barriers to trade, helping SMEs and start-ups to scale up their activities, reforming VAT rules, developing legislative tools to foster the sharing economy and building a strong culture of compliance and enforcement.

Ways to further facilitate access to funding for start-ups and small and medium-sized enterprises (SMEs) need to be explored, say MEPs, calling for EU funding to be made more visible and for measures to ensure that “crowdfunding can be done seamlessly across borders”.

MEPs also call on the Commission to consider how the new rules on the “place of supply” for VAT on digital services can be amended to meet the specific needs of small and micro-businesses and to assess the possibility of a “simplified VAT approach (for the same category of goods) in the e-commerce sector”.  Measures to facilitate these businesses’ access to the patent system in Europe are also needed, says the text.

EU Member States are urged to refrain from taking discriminatory measures, such as trade and tax laws that only affect certain sectors or business models and distort competition, that make it difficult for businesses to establish themselves in a given EU country.

MEPs also call on the Commission to coordinate Member States’ efforts to find “short or long-term legislative solutions towards the sharing economy”, which they note has the potential to generate additional benefits and opportunities for companies and consumers.  They also ask the Commission and EU countries to table proposals to “prevent abuses in the employment and taxation areas in the sharing economy”.

The development of new business models, innovative services and temporary use of assets should be encouraged, but based, where possible, “on similar rules for similar services”, with a view to safeguarding a high quality of services, independent of how their access and provision is organised, says the report.

MEPs argue that, “only a single market approach can be taken with regard to the sharing economy, as fragmentation of the single market through local or national rules prevents European companies of the sharing economy from scaling up at European level”.

The Commission must also press ahead with a legislative proposal to address unjustified geo-blocking and other unjustified forms of discrimination by market players, say MEPs, adding that this proposal must respect the basic principle of freedom of trade and take into account the principle of proportionality, in particular for small and micro-businesses. 

The committee also approved a report by Daniel Dalton (ECR, UK), which highlights the barriers that SMEs face when trying to trade across the EU and suggests ways to overcome them.  Non-tariff barriers within the EU include unjustified national technical rules and regulatory and non-regulatory requirements governing products, service providers and terms of service provision, or bureaucracy.  To read the European Parliament’s press release in full, click here.