How to set the appropriate threshold to serve as cut-off"> How to set the appropriate threshold to serve as cut-off">

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OPEs vs. Dormant Entrepreneurs

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Presentation on theme: "OPEs vs. Dormant Entrepreneurs"— Presentation transcript:

1 OPEs vs. Dormant Entrepreneurs
What are the options for a threshold to eliminate dormant Entrepreneurs from being counted in the statistics Christian WEINBERGER, Senior Adviser - Entrepreneurship & SME Policy European Commission - DG Enterprise

2 The Issue In some countries entrepreneurs are still counted in the statistics if they have no economic activity (i.e. 0 turnover) There are also entrepreneur with a low economic activity which would not even suffice "to earn a living" Both cases should not be counted hen establishing the number of SMEs in the EU, as they are apparently not seriously engaged in their activity ---> How to set the appropriate threshold to serve as cut-off

3 The concept The income from the business should give the Entrepreneur enough means to cover a reasonable life style for him/her and the dependents … but how much exactly is that?

4 The proxy options Fixed unitary amount (e.g. 25.000 € p.a.)
Linked to income tax entry rate (up to what amount is income tax free?) Linked to poverty threshold with a multiplier ?

5 + / - Type A (fixed ) B (tax threshold)
C (poverty thresh-hold w. multipl.) definition ++ - ? Country specific -- + Relevance Annual Adjustment "Manual" Automatic automatic

6 Actual Poverty rates (SILC)

7 Setting the Multiplier
What should the multiplier adjust for Turnover vs. Income How much about poverty is a reasonable income Family status ? Etc?  Using a multiplier of 2 would put SWE at 24 k€ and Romania at 5 k€

8 Drawbacks A year at a loss can happen (maybe take last 3 year average?) Poverty levels are still quite arbitrary How to deal with part time entrepreneurs etc


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