The labor charges and the tax pressure that small and medium-sized Spanish companies have to bear are among the highest in Europe. This, for a country where 99% of the productive fabric are SMEs, represents a brake on growth. This is the main conclusion of the latest report on the national business situation and its comparison with that of the rest of the continent, prepared by Cepyme, the employer of this type of company, where more than 100 barriers of different types are identified.
The main problem that Cepyme identifies is size. Spain has large leading companies worldwide, capable of competing face to face in their respective sectors. But in the case of SMEs, the national company is 24% smaller than the European average. The Germans triple their size and the British double it. This means that small Spanish entrepreneurs have less productive capacity, which prevents them from retaining talent and makes them innovate less. On average, European firms have six employees; the Spanish reach 4.8.
The organization led by Gerardo Cuerva points out that if national SMEs reached the size of European ones, 1.3 million jobs could be created, GDP would rise by 5.5%, sales would increase by 268,500 million euros and an increase in collection of 22,000 million euros would be generated. For this reason, Cepyme asks the Government to address the growth of SMEs as a matter of State.
But Cepyme denounces that the aforementioned obstacles prevent this growth. The first that the employer denounces is the increase in the Minimum Interprofessional Wage, which has improved by 41.3% between 2017 and 2022 and that the Government is going to raise again on January 1. "The SMI has become the most expensive, proportionally, in all of Europe," the organization complains. The minimum wage in Spain represents 54.8% of the average wage, leading the ranking above Greece (51.3%), Portugal (49.2%) and France (48.1%).
Cepyme denounces, secondly, the amount of social contributions, which in Spain are the third highest in Europe. "The higher labor cost that this causes reinforces the difficulties of growth for SMEs," says the employer. She adds that in twenty European countries the contributions that an employer must pay are at least 10 percentage points lower than in Spain. Among them are Italy, Sweden, Portugal, the Netherlands and Germany. There are eleven in which the social contributions paid by the employer are at least half that in our country. These include the United Kingdom, Luxembourg, Ireland and Denmark. France, however, exceeds the national figures.
The minimum labor cost is another of the elements that Cepyme qualifies as a business obstacle. "The sum of contributions and other labor costs means that the minimum cost of hiring an employee is for small companies (between 10 and 49 employees) the equivalent of 136% of the minimum wage," he says. Only three European countries (Lithuania, France and Belgium) have a minimum cost of hiring a wage earner that is higher than that of Spain.
Taxes are also considered a drag on employers. Starting with Companies, which the organization of SMEs once again places among the highest in Europe. “Even if the new reduced rate for SMEs with a turnover of up to one million euros (23%) were generalized, the national rate would remain above Denmark, Portugal, Sweden, Finland and Poland, in addition to, at least, 13 other European countries”. Malta, Germany and France have a higher corporate tax than Spain. In the same sense, Cepyme denounces that the marginal rate of the Spanish personal income tax is almost equal to the German one and exceeds those of Belgium, the Netherlands, France, Portugal, the United Kingdom and Italy. The difference is much more marked in relation to the Eastern European countries, in six of which the maximum income tax rate is half, or less, than in Spain. "The fact that the Income Tax is higher than that of the rest of the countries slows down the attraction of talent by SMEs and, therefore, their growth," the report points out.
Cepyme puts figures on the benefits of Spanish SMEs in comparison with their European counterparts. Thus, the net return on assets in a company with a turnover of less than 10 million euros is 2.9%, while in Italy it is 5.1%; in France, 6.3% and in Germany 6.7%. Measuring profitability after taxes and on own funds, Spanish SMEs are also below, with a profitability of 6.3%, compared to 9.4% in Italy, 13.1% in France and 14.9%. from Germany.
The obligation to set up a works council of 50 workers or more and its minimum size (SMEs have works councils of 10% of the workers, while those of large companies have a maximum of 3.4%) "constitute more rigorous than in the countries around us”, concludes the confederation.
Given this radiography, Cepyme proposes to the Government to promote administrative and fiscal advantages for small and medium-sized entrepreneurs. For example, he raises a moratorium on certain legal and tax aspects if the SME expands its workforce by one worker. “This flexibility would provide the company with its stability to assume the new loads and ensure its size”, he points out. "Currently, companies try to avoid the step mainly of 50 workers, as can be seen in the statistics of business size, since the burdens they assume for expanding their workforce by just one worker discourage said expansion," concludes the business association. .
