Accountancy Europe welcomes the European Commission’s (EC) adoption of the delegated act with the revised European Sustainability Reporting Standards (ESRS). The revised ESRS are simpler and less granular whilst continuing to support the European Green Deal’s policy objectives. The revised ESRS effective date is 1 January 2027; however, earlier application is permitted for the financial year 2026.

The delegated act is now in the scrutiny phase with the Council of the European Union and the European Parliament. If no objections are raised within the initial two months, the act will be published in the EU Official Journal and enter into force. Otherwise, the scrutiny period may be extended by an additional two months.

ESRS should enter into force as soon as possible

Accountancy Europe calls for the revised ESRS to enter into force as soon as possible. This will create certainty and stability in the system, allowing stakeholders to learn and prepare to apply the standards by the effective date. In addition, it would particularly give certainty to wave 1 preparers, who are currently subject to the original ESRS, and who may choose to apply the revised standards for the financial year 2026 too.

Afterwards, we call for a period of calm and stability in standard-setting, to allow for practices to develop among stakeholders to address challenging matters and improve the overall quality of reporting.

Developing practices will ease application

The revised ESRS reduced by 61% the number of mandatory datapoints and make materiality the core principle. In addition to other simplifications such as clearer language of standards, additional flexibilities and phase-ins, the cost-benefit analysis estimates an average of 34% cost savings.

Accountancy Europe welcomes these simplifications. Throughout of the development of the ESRS we have called for principle-based standards, underpinned by the materiality assessment, that focus providing decision-useful information to users. We support the reduction of granularity in the standards and focus on “material information”.

However, challenging issues remain in the ESRS, for which practices should evolve and ease their application. These include the double materiality assessment, the perimeter of reporting, value chain considerations, reporting the anticipated financial effects, applying the reliefs, reporting of asset managers. As a result, the real cost-benefit of the revised ESRS will be determined only after the first years of application.

Next priority: equivalence

Accountancy Europe supports both international sustainability reporting standards and the ESRS. We have always called for the maximum possible alignment between the ESRS and the International Sustainability Standards Board’s (ISSB) standards. Therefore, we welcome the latest additions in the revised ESRS delegated act aiming at further international alignment, including the flexibility in the ESRS statement presentation.

Despite this, double reporting and its associated costs and efforts can only be fully eliminated by equivalence. An increasing number of jurisdictions are mandating sustainability reporting standards, mostly built on the ISSB standards. Equivalence also promotes competitiveness as it would ensure compliance with other jurisdictions’ frameworks, as well as facilitate access to global capital.

Therefore, we call on the European Commission to prioritise equivalence and related mechanisms. This would allow companies in scope of the Corporate Sustainability Reporting Directive (CSRD), particularly non-EU groups, to make use of the alternative provided and apply ESRS equivalent standards to comply with the requirements.

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Accountancy Europe publications

This page provides an overview of our research on PE and third-party ownership more broadly, including resources from our members and international organisations.

1. Private equity in European accountancy and audit firms: an update on market activity from January 2025 to April 2026 (July 2026)
2. Beyond private equity: third party ownership in the accountancy and audit sector (November 2025)
3. Private equity investments in accountancy firms (June 2025)

For more information on PE contact Endrin Bitraj, Accountancy Europe’s Audit and Assurance Manager: endrin@accountancyeurope.eu.

Background

The accountancy profession has traditionally been characterised by partnership structures and organic growth. Firms have expanded through internal development, long-term client relationships, and reputational strength, rather than external investment or acquisition.

However, fast-moving technological developments, digitalisation and increasing competition have led firms to invest more heavily to remain competitive. At the same time, third party investors, and especially PE investors have identified opportunities to invest in accountancy firms, attracted by their recurring revenues, cash flows and growth potential. There has been a notable increase in PE investments in the accountancy sector in recent years.

How has private equity activity evolved between 2015 and early 2026?

PE transactions in the European accountancy sector (2015–April 2026)

PE investment in the European accountancy sector has grown significantly over the past decade. Accountancy Europe gathered and analysed public data on PE investment transactions related to accountancy firms across Europe between 2015 and April 2026.

PE transactions number and percentage in Europe 

• From 2015 to 2020, PE activity in the sector was limited, with annual transactions ranging between 10 and 20.
• In 2021 and 2022, private equity (PE) activity remained relatively stable, showing only a modest increase.
• The market reached a clear turning point in 2023, when the number of PE transactions exceeded 100, almost three times the level recorded the previous year.
• Growth accelerated further in 2024, with around 200 transactions, nearly five times the number observed in 2022.
• This momentum continued into 2025, when transactions rose to 385, representing an almost ninefold increase in just four years. The trend has persisted in 2026, with 131 transactions already identified in the first four months of the year, putting activity on track to remain at similarly high levels.

Audit and assurance firms acquired by PE investors in Europe (2015–April 2026)

More than half of the deals (60%) involve primarily local accounting, tax, and advisory firms, while approximately 40% of the deals are in firms that also provide audit and assurance related services.

A similar trend can be observed for audit and assurance firms:

• 139 of the 385 transactions identified in 2025 involved audit firms, accounting for 36% of all deals.
• In the first four months of 2026, we identified 62 transactions involving audit firms, an increase of more than 33% compared with the same period in 2025.

This indicates that growth in private equity activity is continuing across the audit and assurance sector.

How are private equity firms structured?

A PE fund ordinarily invests in an accountancy and audit firm that undergoes legal restructuring into two distinct entities: an audit firm and a non-audit firm. The non-audit firm usually provides professional services and resources to the audit firm under an administrative services agreement (ASA).

What attracts third party investors (including PE) to the accountancy and audit sector?

• High client retention, stable and predictable cash flows
• Market fragmentation and buy and build approach
• Strong growth potential
• Reputation of the accountancy and audit sector

Why do accountancy firms engage with third party owners?

• Access to capital for growth and expansion
• Operational and management expertise
• Succession planning and ownership

What are the risks linked to third party ownership in the accountancy and audit sector

• Regulatory risk and early engagement
• Quality risk
• Ethical and independence concerns
• Cultural misalignment
• Engaging external advice and expertise
• Impact on the audit market
• Exit strategy risk

What opportunities does third party ownership create for the accountancy and audit firms?

• Investment in innovation and technology
• Consolidation, efficiency and synergies
• Talent retention and development
• Enhanced brand visibility and market reach
• Access to broader business networks

Outlook

Third party ownership is on the rise. Models such as PE are becoming more common across Europe and are reshaping the accountancy and audit profession. This trend comes with both opportunities and challenges, from growth and innovation to questions about independence, governance and audit quality. The debate is therefore not about whether third-party ownership will shape the future of the profession, but how its implications will be managed in practice.

Accountancy Europe does not take a position against or against third-party ownership. We bring together different perspectives so that policymakers, regulators, investors and the profession can have an informed and constructive dialogue.

Further resources:

• EFAA (2026): EFAA for SMEs – Position on Private Equity Investments in the Audit Market
• IFAC (2026): Private Equity Investment in Accountancy
• Wolters Kluwer (2026): Private equity in accountancy – Op zoek naar balans tussen waarde en waarden
• AFM (2025): Private equity in accountancy: balance sheet commercial and public interest under further pressure
• ICAEW (2025): What private equity might mean for a firm’s audit status
• ICAEW (2025): Evolution of Mid-tier accountancy firms (2025 research findings)
• University of Connecticut (2025): The Consequences of Private Equity Investment in Accounting Firms
• ICAS (2025): Private equity investment must respect need for audit quality
• IESBA (2025): IESBA Staff Alert – Private Equity Investment in Accounting Firms
• WPK (2025): Private Equity: Statement by the Board of Management [Vorstand] of the German Chamber of Public Accountants [WPK] on the Audit Market
• Financial Times (2024): Private equity’s interest in audit raises red flags
• FRC (2024): Letter: external private capital and audit firms
• FRC (2024): Annual Review of Audit Quality
• IFIAR (2024): Statement on Private Equity Investments in Audit Firms
• CAI (2021): The secret to successful private equity deals

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We have responded to EFRAG’s Discussion Paper on Connectivity of Financial and Sustainability Reporting (DP or the paper), which makes an important contribution to the ongoing discussion by analysing how connectivity concepts are applied in practice and the associated challenges. We highlight below our position on some important matters in the connectivity discussion, also included in our response.

Definition of connectivity

EFRAG’s DP proposes that connectivity be defined as “the attribute of high-quality information that supports the provision of a holistic and coherent set of information within and across different annual report section”.

Accountancy Europe believes that developing a robust and practical definition is key in standard-setting as it helps establish a common understanding and enables consistent application in practice. Therefore, we also support the DP’s high-level definition of connectivity as a useful starting point.

Differences between financial and sustainability reporting

Financial reporting and sustainability reporting standards have been developed to fulfil the different objectives of the respective reports. The objective of financial statements is to provide information about a company’s financial prospects to investors, lenders and other creditors whereas the objective of sustainability statements is to provide information on the company’s impacts on people and the environment, and on how sustainability matters affect the company’s own performance, useful to investors, lenders and other creditors, but also other stakeholders.

Resultantly, the primary users of financial statements are investors, whereas sustainability statements also include broader stakeholders. Temporality is also a difference, whereby financial reporting focus on past events and the near-term performance, whereas sustainability reporting expands considerations to also the medium- and long-term. Ultimately, materiality considerations also differ as these reports try to fulfil the respective users’ needs for information.

There is also a difference in design between financial and sustainability standards, which should be recognised when considering future guidance on connectivity. Financial reporting standards were designed for financial statements that can stand alone, while sustainability reporting standards were developed for sustainability reports that complement information in the financial statements and other parts of the annual report.

Accountancy Europe calls for an appreciation of these differences and understanding of the existence of two separate reports, which sometimes also result in asymmetric connectivity needs.

Commonalities between financial and sustainability reporting

Financial reporting and sustainability reporting standards share common elements such as the fundamental qualitative characteristics of information (relevance and faithful representation), and the enhancing ones (comparability, verifiability, understandability). They are also both principle-based frameworks, where materiality is the centre-point.

These common principles should enable connectivity in practice as they provide decision-useful information to users, who are expected to have a reasonable knowledge on the matters. In this context, the use of cross-referencing and negative statements (i.e., information explaining that a specific event or condition doesn’t affect the entity), should be connectivity enablers.

Future considerations

Methodologies such as on estimates and measurements should be coherent in corporate reporting and enable that financial and sustainability reporting tell a consistent and complete story. Accountancy Europe calls for EFRAG and the IFRS Foundation to collaborate in supporting stakeholders and developing aligned best practices, such as on anticipated financial effects.

EFRAG and the IFRS Foundation should focus their efforts on supporting the common understanding of connectivity and promoting consistent application of existing reporting requirements, rather than undertake further specific standard-setting activities.

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A common definition of connectivity

The paper provides a high-level definition of connectivity that can be developed further. A more robust definition would help create a common understanding of what connectivity means.

Cross-referencing across jurisdictions

The acceptance of cross-referencing between annual report sections varies across jurisdictions. Any further work on cross-referencing as an enabler of connectivity should take this into account.

Different roles for financial and sustainability reporting

Financial reporting standards were written for reports that can stand alone. Sustainability reporting standards were designed to complement the financial report and other parts of the annual report, so the need for connectivity may be asymmetrical.

Using negative statements carefully

Negative statements can help explain connectivity in some cases, but they should be used judiciously. Preparers and standard setters should expect users to have a reasonable understanding of both reporting frameworks.

Why illustrative examples need context

The illustrative examples are useful on their own. Adding context would make their purpose clearer and explain why they are considered good practice.

No need for new standard-setting at this stage

At this stage, we do not see a need for standard-setting activity to clarify the boundaries of financial and sustainability reporting.

L’article EFRAG discussion paper on connectivity of financial and sustainability reporting est apparu en premier sur Accountancy Europe.

The European Single Access Point (ESAP) is an EU-wide digital platform designed to centralise access to public financial and sustainability information from companies. The scope will include a broad range of entities such as listed entities, credit institutions, insurers, investment firms, audit firms, but also other entities and SMEs required to disclose information under various EU regulations and directives.

ESAP functions as a “two-step reporting system”: companies first submit required data to a national or EU-designated “collection body”, which then automatically transmits it via a single Application Programming Interface (API) to the central ESAP portal. While companies remain responsible for data accuracy, this system streamlines dissemination for investors and stakeholders.

Read about ESAP’s milestones and expected reporting requirements in our factsheet.

Key implementation timeline: go-live in 2027, full rollout by 2031

ESAP’s legislative framework was published in December 2023. The platform is mandated to go live by 10 July 2027, operated by the European Securities and Markets Authority (ESMA). Reporting requirements will be phased in: core financial and sustainability data under the Accounting and CSRD directives becomes accessible from January 2028. Audit-related transparency reports and sanctions follow from January 2030, with the Corporate Sustainability Due Diligence Directive (CSDDD) annual statements joining ESAP from 1 January 2031.

What information will be accessible on ESAP?

ESAP itself does not create new reports but centralises existing disclosures. The platform will provide free public access to:

• Annual financial statements and management reports.
• Sustainability statements (per CSRD/ESRS) and related assurance reports.
• Audit reports and auditor transparency reports.
• CSDDD due diligence reports and prospectuses for public securities offerings.
• Prudential reports for banks and administrative sanctions against auditors.

Required digital formats and metadata: machine-readability is key

To ensure data is extractable and analysable, submissions must be in specified digital formats. Machine-readable formats like XBRL (XML, inline XBRL) are mandated for structured data under CSRD, while data-extractable formats (e.g., PDF) may suffice for other documents. Critical metadata must accompany each submission, including the company’s Legal Entity Identifier (LEI), size category, industry sector, and document type.

The role of collection bodies and data quality assurance

National authorities or EU bodies act as collection bodies, validating submissions before API transfer to ESAP. They perform automated checks to reject non-compliant filings and assist companies. ESMA also validates data at the central level and enforces a robust IT security policy to guarantee information authenticity, integrity, and non-repudiation.

Specific implications for the accounting profession and preparers

The accounting profession is pivotal in enhancing the reliability of ESAP data. Preparers must ensure disclosures comply with evolving digital taxonomy rules, particularly for sustainability reporting in XBRL under CSRD.

Entities must adapt processes for machine-readable reporting, manage LEI requirements, and engage with collection bodies to ensure seamless, high-quality data submission to this transformative EU platform.

Auditors of Public Interest Entities (PIEs) will ensure that their transparency reports will be accessible.

L’article European Single Access Point (ESAP) est apparu en premier sur Accountancy Europe.

Article 40a of the Corporate Reporting Directive (CSRD) requires non-EU groups which make more than 450 million Euros in Union and that have a subsidiary or branch with a turnover of 200 million Euros, to publish a sustainability report on the group impacts. The N-ESRS is one of the options that can be used to comply with Article 40a of the Accounting Directive, as amended by the CSRD. The non-EU groups subject to this extraterritoriality provision can alternatively report under the full ESRS, or standards deemed equivalent to the ESRS.

In our letter, we share some initial remarks on the current draft N-ESRS, which is still work in progress at EFRAG.

CSRD interpretations

There are unclear elements in the CSRD, currently being transposed in Member States, that affect the development of the N-ESRS, such as:

• the definition of “net turnover in the Union”
• the objective of the standard, the determination of users and the type of decisions users make on the basis of the report prepared under the N-ESRS
• whether the standard should include purely impact disclosures or also those with a “financial” materiality aspect to them
• whether the N-ESRS report is a consolidated report
• considerations of cases where the subsidiary will report incomplete information based on only information in its disposal.

Perimeter of reporting (global vs. “mixed” approach)

Upon the advice of the EC, the current draft of the N-ESRS allows for two options for the perimeter of disclosures:

• global approach, whereby the impacts of the whole non-EU group would be reported, or
• “mixed” approach, whereby for climate, the global impacts would be reported, and for other topics impacts would be limited to those connected with the sale of products and services in the EU.

We express our concerns with the “mixed” approach, noting that it is impractical, raises assurance challenges, creates confusion, and undermines comparability.

Global context and political considerations

We invite the EC to explore equivalence and related mechanisms to ensure that:

• double reporting and the associated costs are fully eliminated
• EU companies remain competitive in the global markets
• non-EU companies subject to the extraterritoriality provision in the CSRD do not circumvent the provisions.

Accountancy Europe will contribute to the upcoming EFRAG consultation on the N-ESRS.

L’article N-ESRS: accounting profession preliminary remarks est apparu en premier sur Accountancy Europe.

Accountancy Europe is pleased to provide feedback on the European Commission’s proposed Regulation establishing a new 28th regime framework and the “EU Inc.” legal form. Our members comprise 49 national institutes of accountants, auditors and advisers. Their day-to-day work includes supporting businesses with financial planning, reporting, data reliability, access to finance and governance, among other areas. A significant number of our practitioner members specialise in supporting SMEs.

Together with our practitioner experts and members, we have analysed the proposed 28th regime and EU Inc. framework and would like to offer a number of practical recommendations that we believe would further strengthen the proposal. This is a direct follow-up to our previous commitment to provide more detailed feedback on the proposal later on. We would also like to congratulate you and the Commission team for developing what is, overall, a strong and well-balanced proposal.

General comments

We would like to commend several important aspects of the proposed Regulation, such as:

• the decision to maintain a broad scope for the EU Inc. legal form, rather than restricting it to a narrow category of companies such as “innovative start-ups”, as it helps avoid market distortions and the creation of an uneven playing field between different types of companies
• the emphasis on digitalised processes, the objective of enabling company formation within 48 hours, and the removal of paper-based and other burdensome administrative requirements which should significantly facilitate company creation across the EU. We also hope that the existence of an alternative EU Inc. framework will encourage Member States to review and simplify their own national company formation procedures, thereby extending similar benefits more broadly and beyond EU Inc. companies alone
• the choice of a Regulation rather than a Directive, which should help minimise the risk of gold-plating during national implementation. We therefore strongly support the Commission’s choice of legal instrument

Overall, we believe that the proposed Regulation strikes a reasonable balance between introducing new elements for the EU Inc. company form and reflecting current political realities. At the same time, the proposal remains relatively modest and is therefore unlikely, on its own, to fully address the obstacles faced by European companies seeking to grow and operate across borders.

Therefore, Accountancy Europe strongly believes that the EU Inc. legal framework should constitute only a first step, and that the 28th regime should be subsequently expanded through future proposals to provide additional harmonisation benefits for EU Inc. entities. The success of the 28th regime is dependent on building further elements into it in the future, and we strongly encourage the Commission to state this political ambition explicitly in the Regulation’s recitals, making clear that the present proposal constitutes only the first stage of a broader and more comprehensive 28th regime.

In particular, we encourage the Commission to explore, at a later stage, ways to reduce fragmentation in areas such as taxation, labour law and other relevant legal frameworks affecting EU Inc. companies, and to especially address additional specific needs of innovative start-ups. The ambition should be to create an EU Inc. 28th regime that is a European ‘golden standard’ in the eyes of investors, entrepreneurs and authorities alike.

We list below a number of practical adjustments that could be made to the proposal to make it even more effective.

Specific recommendations

Expand the indicators used to evaluate success of the 28th Regime

The Commission proposal includes a commitment to review the uptake of the EU Inc. framework by companies, notably by assessing the number of such companies created (Recital 85 and Article 108). We welcome this explicit commitment to evaluating the effectiveness of the regime. However, we believe that the performance indicators currently proposed by the Commission are too limited to provide a sufficiently comprehensive picture of the regime’s success.

The performance indicators outlined in Article 108 require the Commission to report on the uptake of the EU Inc. framework, but this assessment should extend beyond the mere number of EU Inc. companies established and also include meaningful economic, financial and other indicators. In principle, the regime could lead to a high number of incorporations while generating limited investment, scaling, job creation or broader contributions to EU competitiveness.

A broader set of indicators would also help assess the “quality”, and not only the “quantity”, of EU Inc. formations, including whether such entities represent genuine economic activity rather than shell companies, regulatory arbitrage structures or low-value incorporations.

We therefore encourage the Commission and the co-legislators to consider a broader range of performance indicators under Article 108, which could include, inter alia:

• Capital raised by EU Inc. companies
• Average time required for incorporation
• Levels of cross-border investment activity
• Size and scale of EU Inc. companies
• Growth and survival rates
• Employment creation
• Uptake of employee share ownership schemes
• Extent of cross-border operations and establishment
• Indicators relating to fraud, abuse, insolvency and market integrity

Ensure consistent treatment by national authorities

As indicated above, we commend the Regulation’s objective of ensuring the fast, seamless and low-cost formation of EU Inc. companies. We are concerned, however, that certain provisions of the Regulation are drafted in relatively broad terms, which may result in divergent treatment of EU Inc. entities depending on the practices of the national authorities in the Member State of registration.

One such example is Article 28 (2), which provides that:

“Paragraph 1 is without prejudice to the obligation laid down in Union or national law to submit documents to complete procedural requirements or exceptionally and on a case-by-case basis, where public authorities have reasonable grounds to suspect abuse or fraud related the EU Inc. company.”

While we fully support the objective of this and similar provisions in the Regulation in enabling national authorities to ensure compliance with applicable rules and to address risks of abuse or fraud, we believe that the wording used in certain provisions, including Article 28 (2), is overly broad and insufficiently precise. In practice, the possibility for authorities to request additional documentation could easily become the norm rather than the exception, particularly if the concept of “reasonable grounds” is interpreted expansively. This creates a risk of divergent practices across Member States, as well as precautionary or speculative requests for additional documentation made on a routine basis “just in case”.

We therefore propose amending this and similar provisions throughout the Regulation to specify more clearly the circumstances under which authorities may require additional documentation from EU Inc. companies. Any such requests, or any differential treatment applied to EU Inc. entities, should be based on verifiable facts, documented indicators and appropriate procedural safeguards. Authorities should also be required to justify such requests in writing in order to ensure proportionality, limit unnecessary administrative burdens and avoid duplication.

Reduce the restrictions on EU-ESO

Article 78 (2) restricts the eligibility for warrants issued under the EU employee stock option plan (EU-ESO) to employees and members of the board of the EU-ESO and its subsidiaries providing that they hold 25% or less of the voting rights or rights in proceeds of the company or have held such shares in the 24 months preceding issuance.

We believe that the 25% holding is unnecessarily restrictive and may limit its usefulness by innovative companies who may well need more flexibility in their financing arrangements. We recommend a higher percentage, for example of 33%, to be considered. We also believe that the 24-month threshold for previous holdings in the EU-ESO is too restrictive and consideration should be given to reducing this, for example to 12 months, at least for innovative start-ups.

Clarify place of taxation of EU-ESO

Article 79 sets out certain key elements regarding the taxation of warrants under the EU-ESO, including the taxable event and the calculation of the taxable amount, but it does not provide clarity on several other important aspects, most notably which Member State has the taxing rights upon disposal. This lack of legal certainty is problematic, may increase the risk of double taxation in certain situations and, thereby, reduce the appeal of the EU-ESOs.

We understand that the Commission’s choice of the legal base for the proposal prevents it from dealing with tax issues such as providing legal certainty on the place of taxation. We would, however, recommend additional wording in Article 79 to indicate that the European Commission shall (e.g. by July 2027) issue a Recommendation to the Member States regarding the place of taxation of the EU-ESOs. Ideally, such a Recommendation would be followed by a legislative proposal.

For such a Recommendation, the Commission could consider different approaches for allocating the taxing rights, such as assigning them to the Member State in which the employee benefiting from the share options is resident at the time of disposal, or alternatively to the Member State in which the EU Inc. company issuing the shares has its registered office, or even a combination. Each of these and other approaches presents advantages and disadvantages, and we recognise that determining the appropriate allocation mechanism is likely to involve complex political considerations.

Nevertheless, our key point is that, regardless of the approach ultimately chosen for the allocation of EU-ESO taxing rights, the commitment to issue a Recommendation on this should be stated explicitly in Article 79 with the objective of providing some degree of legal certainty and hopefully minimise the risk of double taxation.

Broaden the application of the simplified winding up process

While a simplified winding-up process may be particularly beneficial for innovative start-ups, which are often inherently riskier than more traditional businesses and whose investors may seek a formalised and predictable exit mechanism, there does not appear to be a compelling justification for limiting this process exclusively to innovative start-ups.

We therefore believe that the rapid winding-up procedure set out in Chapter X of the Regulation should be made available to all EU Inc. companies. If the Commission’s concern is that extending the procedure universally could place excessive pressure on the relevant authorities, eligibility could instead be limited to EU Inc. entities that meet the EU definition of SMEs. This would ensure that the simplified procedure remains accessible to a broader category of smaller businesses, rather than being restricted solely to a subset of innovative start-ups.

Remove the seemingly redundant Article 105

Article 105, entitled “Accounting”, provides that:

“The EU Inc. shall be subject to the requirements of the applicable accounting law of the Member State in which its registered office is situated. However, Article 26 shall apply as regards the filing and public availability of accounting documents of the EU Inc.”

The substance of Article 105 appears to be largely covered by Article 4(2), which states that:

“Matters that are not covered by this Regulation or by the articles of association shall be governed by national law, including the provisions transposing Union law, which apply to relevant national legal forms in the Member State in which the EU Inc. has its registered office”.

In this respect, Article 105 appears to duplicate, in relation to accounting matters, the general conflict-of-laws rule already set out in Article 4 (2). This repetition risks creating unnecessary redundancy, confusion and potential legal ambiguity, and we therefore recommend deleting Article 105 altogether. If additional clarification is required in relation to accounting requirements, this could more appropriately be addressed directly within Article 26, rather than through a separate and partially overlapping provision. Alternatively, a reference “including accounting law” could be added to Article 4 (2).

Concluding remarks

Accountancy Europe and its members remain committed to contributing constructively to the co-legislative process to help ensure that the proposed Regulation establishes a robust and effective EU Inc. framework that supports the growth of European businesses. We may provide additional recommendations at a later stage. In the meantime, should you wish to discuss any of the above suggestions in greater detail, we remain at your disposal.

L’article Accountancy Europe feedback: 28th Regime corporate legal framework – ‘EU Inc .’ Regulation est apparu en premier sur Accountancy Europe.

Accountancy Europe welcomes today’s publication by the European Commission of a comprehensive package of tax simplification proposals aimed at reducing administrative burdens for businesses and their advisors across the EU. If adopted by the Council, the measures would significantly support the EU’s objective of cutting reporting requirements and strengthening Europe’s competitiveness.

Accountancy Europe CEO Eelco van der Enden commented:

“There is much in this package that could make a real difference for businesses and tax administrations alike, while preserving the underlying policy objectives. Accountancy Europe has actively contributed to the Commission’s consultation processes over the past year, and I am delighted to see that several of our recommendations have been reflected in the proposals.”

While many elements deserve praise, some aspects would benefit from further refinement.

Tax omnibus moves in the right direction

The Commission proposes ambitious  measures, including excluding Pillar Two entities from the scope of the Controlled Foreign Company (CFC) rules, introducing an automatic inflation adjustment to the interest limitation rule, and removing participation thresholds under the Parent-Subsidiary Directive (PSD) and the Interest and Royalties Directive (IRD).

However, the proposed partial exemption of SMEs from the Anti-Tax Avoidance Directive (ATAD) raises important questions.

Eelco commented:

“It is difficult to see the rationale for exempting SMEs only from the CFC rules, which in practice apply to relatively few SMEs, while leaving them subject to many of the other substantive ATAD requirements. A complete SME exemption would be welcome”.

The package also misses an opportunity to further strengthen the EU tax dispute resolution framework, for example by making joint audits mandatory in cross-border tax disputes.

DAC recast welcomed, but further improvements are needed

“The recast of the Directive on Administrative Cooperation (DAC) is long overdue, and there is much to welcome here as well,” Eelco said.

For DAC6, the extension of the reporting deadline from 30 to 90 days, the commitment to provide guidance on the Main Benefit Test, the exclusion of Pillar Two entities, and many others are all practical and constructive improvements.

At the same time, the Commission’s decision to maintain the primary DAC6 reporting obligation with intermediaries remains problematic.

 “Tax advisors often only have a partial view of an arrangement, whereas taxpayers have access to the complete picture. In addition, the current approach further exacerbates the uneven playing field between different categories of tax professionals. Assigning the reporting obligation to taxpayers would address both concerns in one go.”

The proposal to introduce a single, central filing mechanism for DAC4 and DAC9 is another positive development. However, there is little justification for not extending this simplification to the other DAC reporting frameworks as well.

Eelco concluded:

“Accountancy Europe will continue engaging constructively with policymakers to explore whether the package’s level of ambition can be strengthened further. Overall, these are solid proposals that deserve broad support, and we hope the Council will preserve their simplification objectives throughout the legislative process.”

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In its submission, Accountancy Europe supports the objective of establishing clear and harmonised requirements for group-wide AML/CFT policies, procedures and controls. However, we highlight significant practical and legal concerns regarding the application of the proposed requirements to accountants, auditors and other non-financial professions operating through networks of legally separate and independent firms. 

Accountancy Europe identifies several specific concerns in the submission, in particular: 

Application of group-wide requirements to networks of independent firms

The draft RTS does not provide sufficient clarity on when the provisions apply to structures that are not organised as traditional corporate groups. This creates uncertainty regarding their scope and interaction with existing legal, regulatory and governance frameworks. Accountancy Europe recommends clarifying that the existence of a structure should require legally enforceable governance integration relevant to AML/CFT and that coordination should be clearly distinguished from control. 

Information-sharing and legal constraints

The proposed information-sharing requirements raise practical, legal and data protection challenges, particularly for legally independent entities and in cross-border or third-country contexts. Accountancy Europe recommends greater clarity regarding the interaction with data protection, confidentiality and professional secrecy requirements. 

Proportionality and operational feasibility

The RTS may require networks, partnerships and similar structures to make material changes to their operating models solely to comply with the proposed requirements. Accountancy Europe considers that such changes could impose significant legal, operational and organisational burdens while the added AML/CFT value remains unclear. It therefore calls for a more proportionate approach that reflects the legal and operational realities of non-financial sectors. 

Need for further engagement and guidance

Accountancy Europe considers that several provisions, particularly those relating to structures sharing common ownership, management or compliance control, are not sufficiently clear and may capture arrangements that lack the authority to implement and enforce group-equivalent AML/CFT obligations. It recommends further engagement with the accounting and audit sector and the provision of practical guidance and examples to support consistent and proportionate implementation. 

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Why the consultation matters

This consultation is important because any revision of the EU’s eInvoicing rules will set the template for the implementation of VAT in the Digital Age, with major implications for most businesses and their advisers.

Benefits of eInvoicing

Accountancy Europe supports eInvoicing as a tool that can help businesses improve efficiency, provide more up-to-date financial information, and open the door to cost-saving measures that Member States’ tax authorities could introduce, such as prefilled tax returns. It could also help improve the speed of payment.

The information exchanged would also give tax authorities far more up-to-date data, helping them assess risk and respond to threats to their tax bases more quickly and effectively.

Costs and challenges

However, the move to eInvoicing will create short-term costs for both businesses and tax authorities, and these costs will be particularly heavy for SMEs.

We therefore call for all technical standards relating to eInvoicing and the exchange of eInvoicing data to be finalised as soon as possible, so that software solution providers can update their systems well in advance of the implementation date. However, we do not support the mandatory inclusion of eInvoicing in all software solutions, as this may create unnecessary costs for the very smallest businesses and their solution providers.

Impact on SMEs

We are also concerned that requiring suppliers to issue eInvoices for public procurement contracts below the current threshold could create difficulties for SMEs, particularly where invoicing is infrequent.

There is a risk that mandatory eInvoicing could discourage some SMEs from seeking contracts with public bodies, something that is already difficult in some Member States because of public procurement requirements.

Need for clear communication

The introduction of eInvoicing needs to be clearly communicated to businesses well in advance, so that they have time to prepare for the significant changes to systems and processes that many will need to make.

We also believe that governments should consider practical support measures to help businesses make these changes, particularly SMEs.

A harmonised European standard

It is important to have a harmonised eInvoice standard and system across Europe to help reduce implementation and operating costs, and to avoid hindering cross-border trade.

L’article EC consultation on the revision of EU electronic invoicing rules est apparu en premier sur Accountancy Europe.

While ISA 540 (Revised) has broadly achieved its objective of strengthening the audit of accounting estimates and enhancing audit quality, our response identifies several practical implementation challenges that have emerged since the standard came into effect.

Scalability and proportionality for simpler estimates

Feedback from our members suggests that ISA 540 (Revised) operates effectively in the context of complex accounting estimates. However, some requirements may be perceived as disproportionate for simple or low-risk estimates where estimation uncertainty is limited. In such circumstances, auditors may be required to perform procedures or documentation that provide limited additional audit value.

The response encourages further consideration of how a more proportionate and scalable approach could be achieved, while continuing to maintain audit quality.

Overlap with ISA 315 (Revised 2019)

We also draw attention to the practical difficulties arising from the interaction between ISA 540 (Revised) and ISA 315 (Revised 2019), particularly in relation to risk assessment concepts and documentation, where our members observe overlap and duplication in practice. This is, in our view, one of the areas the IAASB may wish to consider most closely, as it may be difficult to address through additional guidance alone.

Understanding the root causes of implementation challenges

Accountancy Europe believes that further outreach and information gathering, including detailed inspection findings and root cause analysis from oversight bodies, could help the IAASB better understand the practical difficulties encountered in applying ISA 540 (Revised).

Such information may help distinguish challenges arising from the requirements of the standard itself from those relating to implementation approaches, methodologies, software or training, and support more targeted actions going forward.

A way forward

Some of these issues may be hard to fix through guidance alone. The IAASB should consider whether the standard could be made simpler, clearer and more proportionate, focusing only on the specific problems identified. Any change, to the standard or through new guidance, should reduce the burden on auditors, not add to it.

Together, the response and accompanying letter aim to contribute constructively to the IAASB’s post-implementation review and to support a standard on accounting estimates that remains effective, proportionate and fit for purpose.

L’article Post implementation review survey ISA 540  est apparu en premier sur Accountancy Europe.

To support stakeholders in understanding this proposal, Accountancy Europe has published a new factsheet outlining the key concepts, features and other key elements of the proposed Regulation. It provides an accessible overview of what the “28th regime”/EU Inc. proposal entails and the policy rationale driving the initiative.

Why was the 28th regime proposed?

The idea behind a “28th regime” is to establish a single set of EU-level rules that companies could voluntarily opt into instead of navigating 27 different national legal systems. In doing so, such a framework could help reduce administrative burdens, simplify cross-border operations, facilitate access to capital, and strengthen Europe’s competitiveness in strategic sectors such as technology, clean tech, and innovation-driven industries.

The initiative is gaining political momentum in the context of broader discussions on the future of the Single Market, the Savings and Investments Union (SIU), and Europe’s long-term economic resilience. Policymakers increasingly recognise that regulatory fragmentation can create barriers for scaling businesses across the EU, particularly for start-ups and high-growth companies seeking to compete globally.

What are the next steps?

As a next step, both the European Parliament and the Council need to provide their positions on what the Commission has proposed, and eventually reach a compromise agreement on the text that will then eventually become EU law. The co-legislators are aiming for a final agreement by the end of 2026. The final version of the proposed Regulation may differ from what the Commission has proposed, and therefore of what the factsheet describes.

L’article The EU’s 28th Regime est apparu en premier sur Accountancy Europe.

Suitability of the VS for larger organisations

Accountancy Europe notes that EFRAG’s voluntary standard for non‑listed micro, small and medium‑sized undertakings (the “VSME”), on which the VS is closely based, was developed with entities of fewer than 250 employees in mind and has not been tested for suitability with larger organisations. We recommend that the assessment of suitability for larger entities be included in the post‑implementation review required under the CSRD.

Reducing unnecessary information requests in value chains

To reduce the risk of SMEs receiving unnecessary or inconsistent information requests from larger value‑chain partners, we support the categorisation of disclosures as “necessary”, “necessary if applicable”, etc. While this approach was implied in the VSME, explicit labelling of disclosures will help reduce uncertainty for reporting and reporting‑requested entities.

Clarity of the delegated Regulation’s drafting

We find that some articles in the delegated Regulation lack clarity and propose targeted drafting amendments to reduce uncertainty inherent in the current wording. Clearer drafting will support consistent application of the value‑chain cap and limit disputes between reporting companies and their suppliers.

Alignment with revised ESRS and removed disclosures

We support the removal of disclosures that were present in the VSME but have been removed from the draft amended ESRS. However, we have identified inconsistencies between certain disclosures and definitions in the VS and the draft amended ESRS. We recommend a final consistency check of all disclosures, definitions and cross‑references that are common to the VS and the revised ESRS before final publication, to ensure alignment and avoid contradictory requirements.

Detailed comments on specific disclosures

We have provided further, detailed comments on certain disclosures in our submission and ask that these be considered during finalisation of the delegated Regulation.

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Better Regulation and simplification

We appreciate that the EC made limited changes to EFRAG’s technical advice as this is in line with the principles of Better Regulation — see more in our February 2026 statement. It strikes a good balance between simplification and supporting the Green Deal’s policy objectives, as well as promotes stability in the European Union’s (EU) sustainability reporting ecosystem.

We note that the revised ESRS are simpler, but only practice will confirm the real burden reduction.

Main asks

We:

• call for the revised ESRS to enter into force as soon as possible;
• call for the finalisation of the delegated act with only the edits which are absolutely necessary;
• call for the clarification of a few elements on the new provision on asset management activities as part of this delegated act.

Future issues

Accountancy Europe notes that the remaining challenging issues with the standards, such as double materiality assessments, the perimeter of reporting, anticipated financial effects, application of reliefs, etc. can be addressed in the future, including when developing guidance.

L’article EC consultation on revised ESRS est apparu en premier sur Accountancy Europe.

Accountancy Europe identifies several key concerns in the submission, in particular:

Operational challenges and need for sector-specific guidance

We foresee significant operational challenges in implementing this draft RTS, as it is primarily designed for transaction-based financial institutions and does not adequately reflect service-based professions such as accountancy and audit.

We recommend greater flexibility, clearer recognition of sector differences, and the introduction of sector-specific guidance and illustrative scenarios. We also stress the importance of sufficient transitional arrangements and timely availability of Level 2 and Level 3 measures to support effective implementation.

Definition of business relationships – limited clarity for professional services

We do not consider the criteria in Article 2 of the draft RTS to be sufficiently clear or effective in identifying “business relationships,” particularly in the context of professional services such as accountancy practices. In its current form, the RTS does not fully reflect how such services operate in practice and thus is of limited applicability.

Professional services are typically provided within a formalised engagement framework, which defines the scope of work and may involve a degree of interaction over time. As a result, even where services appear to be provided on a one-off basis, they may nonetheless involve elements characteristic of a business relationship.

Linked transactions criteria overly prescriptive and financial-sector oriented

We do not consider the criteria in Article 3 to be fully effective, as they are primarily designed for the banking sector and are not readily applicable to audit and accountancy practices. The framework is overly prescriptive and risks a checklist-driven approach rather than a meaningful risk-based assessment.

We recommend revising Article 3 to explicitly allow for a risk-based and client-specific assessment, clarifying that criteria should be applied only “where relevant” for the type of business, and ensuring a clearer distinction between financial and non-financial obliged entities.

L’article AMLA consultation – Draft RTS on Business Relationships, Occasional & Linked Transaction under article 19(9) AMLR est apparu en premier sur Accountancy Europe.

In its submission, Accountancy Europe highlights the importance of ensuring that the framework remains proportionate, risk-based and workable for non-financial obliged entities, including accountancy service providers. 

Accountancy Europe identifies several specific concerns in the submission, in particular: 

Transaction-focused requirements and applicability to non-financial sectors

The RTS remains heavily oriented towards the financial sector, despite its equal applicability to non-financial sectors. For accountancy service providers, whose services are generally relationship-based rather than transaction-driven, this approach is not appropriate and risks creating disproportionate operational burden. 

We recommend clarifying that these requirements should be applied proportionately to the nature of the service provided, allowing obliged entities to rely on broader knowledge of the client and their activities rather than requiring transaction-specific information in all cases. 

Insufficient flexibility within the risk-based approach

The RTS sets out detailed CDD measures which leaves limited scope for the consideration of the sector specific risks and the exercise of judgement. This risks undermining the AMLR’s objective of enabling a proportionate and effective application of AML/CFT measures. 

We recommend that where possible in line with the Level 1 legislation, AMLA introduce clearer and more explicit risk-sensitive language throughout the RTS. The RTS should clarify how obliged entities may adjust the scope, intensity, and frequency of measures based on the assessed ML/TF risk, including by explicitly allowing for the exercise of professional judgement and consideration of sector-specific risks. 

Implementation timelines for smaller obliged entities

The requirement to update customer due diligence information for existing high-risk customers within a short timeframe may create disproportionate operational burdens for smaller firms with limited compliance resources. Accountancy Europe recommends introducing explicit proportionality considerations and allowing greater flexibility regarding implementation timelines. 

Cost implications and operational burden

Certain RTS requirements may generate significant compliance costs, particularly for smaller firms and non-financial obliged entities. Accountancy Europe recommends that AMLA ensure that the RTS remain proportionate, operationally feasible and appropriately balanced against their expected AML/CFT benefits. 

L’article AMLA consultation – Customer Due Diligence obligations under Article 28(1) AMLR est apparu en premier sur Accountancy Europe.