Administrative costs on businesses

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The EU endeavours to issue a business regulation that does not impose excessive costs on business. The Protocol on the application of the principles of subsidiarity and proportionality annexed to the Treaty establishing the European Community already provides that "any burden, whether financial or administrative, falling upon the Community, national governments, local authorities, economic operators or citizens needs to be minimised and proportionate to the objective to be achieved". In the EU's approach to better regulation, the preparation of new legislation and simplification of existing legislation take into account the overall benefits and costs. Therefore, regulatory costs, of which administrative obligations are just one element, must be analysed in a broader context, encompassing in an integrated way the economic, social and environmental costs and benefits of regulation. This is why the assessment of administrative burdens must continue to form a part of the Commission's integrated impact assessment procedure. Measuring administrative costs can help to improve the regulatory environment, but it cannot take a disproportionate weight in that broader analysis. Nor can EU legislation be presented as a mere cost factor, in particular as it often replaces 25 different national legislations and thus decreases operating costs at EU level.[1]

The Commission, with the collaboration of several Member States, has carried out a preliminary analysis of existing approaches for assessing administrative costs. This analysis has enabled it to identify methodological elements enjoying wide consensus and backed by solid empirical evidence, as well as others whose feasibility or value-added for a common EU approach are not fully proven.

The Commission has taken those elements as a starting point for outlining a possible common approach adapted to the EU needs and the above criteria, the "EU Net Administrative Cost Model". It postulates that some elements could and should be predefined and standardised in order to ensure comparability of data (definition of administrative costs, main cost factors to be taken into account and reporting format) while flexibility should prevail for other aspects (level of detail required, possibility to choose from a range of methods for data collection in particular).[1]

According to the Impact Assessment Guidelines of the European Commission, the following key questions are of particular importance when examining the impacts of policy initiatives on administrative costs on business:

Further information

EC related information:

Communication: Better Regulation for Growth and Jobs in the European Union

Other information:[1]

See also



  1. 1.0 1.1 1.2 JRC: IA TOOLS. Supporting inpact assessment in the European Commission.[1]

This text is for information only and is not designed to interpret or replace any reference documents. The text is partially adapted from:

European Commission: DG Enterprise - Better Regulation