Evaluating impacts on administrative requirements
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Scope
Does the option impose additional administrative requirements on businesses or increase administrative complexity?[1]
Definition
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. The Commission has outlined a possible common approach adapted to the EU needs and the above criteria, the "EU Net Administrative Cost Model":
According to the proposed "EU Net Administrative Cost Model", administrative costs are defined as the costs incurred by enterprises, the voluntary sector, public authorities and citizens in meeting legal obligations to provide information on their action or production, either to public authorities or to private parties. Information is to be taken in a broad sense, including costs of labelling, reporting, monitoring to provide the information and registration.[1]
Result
While the calculation will often focus on regulatory costs of a recurring nature, one-off costs may be taken into account (i.e. costs incurred when (re)designing the way administrative obligations will be met).
An administrative action required by law but corresponding to what an entity would normally do in the absence of any legal obligation should not be regarded as an administrative obligation. For example, a large part of accounting and auditing legislation corresponds to normal business practice Administrative costs incurred for participating in voluntary public programmes are not concerned either.[1]
Administrative costs are assessed on the basis of the average cost of an action (Price) multiplied by the total number of actions performed per year (Quantity). The average cost per action is estimated by multiplying a tariff (based on average labour cost per hour including prorated overheads) and the time required per action:
Σ P x Q (Price = Tariff x Time; Q: Quantity = Number of entities concerned x Frequency).
Further information
EC related information:
- European Commission: Better Regulation
- Communication: Better Regulation for Growth and Jobs in the European Union[1]
Other information:
Indicators
There are no Eurostat Structural or Sustainable Development Indicators specifically addressing this key question
Relevant data is available through the OECD Publications database:
OECD: Businesses' Views on Red Tape -Administrative and Regulatory Burdens on Small and Medium-sized Enterprises-. The data show how small and medium-sized enterprises perceive national administrative and regulatory costs.
Commission staff can subscribe to OLISnet by filling in the subscription form to have access to this publication and to related individual country studies.[1]
See also
References
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: Annexes to Impact Assessment Guidelines