Micro entity

The EU Accounting Directive lets member states define micro-undertakings: companies that do not exceed two of three limits, currently EUR 450 000 total assets, EUR 900 000 net turnover and ten employees on average. Micro entities may prepare an abridged balance sheet and profit and loss account, omit the notes almost entirely and, in some countries, skip publishing the profit and loss account.

Most member states have implemented the option, though the exact reliefs differ and a few countries do not use the category at all. Being a micro entity does not change VAT or income tax obligations, only the accounting and disclosure burden. The category is distinct from the small business scheme for VAT and from flat-rate tax regimes, which have their own turnover limits. A typical Kontevia customer with a limited company falls into this category.