CSDDD non-EU turnover threshold

Not by itself. For companies formed under the law of a third country, Article 2 uses net turnover generated in the Union. A non-EU company is in scope if it generated more than EUR 450 million in net turnover in the Union in the financial year preceding the last financial year, or if it is the ultimate parent of a group that reached that Union threshold on a consolidated basis.

Article 2 also contains a separate franchising and licensing route for third-country companies: qualifying EU franchising or licensing royalties above EUR 22.5 million, combined with more than EUR 80 million in Union net turnover, can bring the company or ultimate parent group into scope. The safe approach is to check EU-generated turnover and any qualifying licensing structure before treating a global group as in scope.

Article 2 frames the non-EU threshold by reference to the financial year preceding the last financial year, and it says the Directive applies only if the scope conditions are met in two consecutive financial years. A useful scope file therefore should not contain a single annual sales number with no bridge to the statutory test.

Current Article 37, as amended by Directive (EU) 2025/794, applies the first non-EU wave from 26 July 2028 for Article 2(2)(a) and (b) companies that generated more than EUR 900 million in Union net turnover in the financial year preceding the last financial year before that date. Other Article 2(2) companies follow from 26 July 2029. Avoid describing the 2025 timing change as only a proposal.

If the Article 2(2) test is met, the company should prepare the governance and regulator-facing records that the Directive expects from third-country companies. Article 23 requires an authorised representative established or domiciled in a Member State where the company operates, accepted by that representative, and empowered to receive supervisory authority communications.

Article 24 then points to the competent supervisory authority. For a third-country company, the competent authority is generally the Member State where the company has a branch. If there is no branch, or there are branches in several Member States, the relevant authority is tied to where the company generated most of its Union net turnover under the Article 24 rule.

A useful non-EU turnover file should let finance, legal, sustainability, and regional teams reproduce the conclusion without relying on memory. It should connect the legal entity and group perimeter to the Union turnover calculation, branch footprint, licensing arrangements, and authorised representative status.

Article 28 also shows why this evidence matters externally: Member States and the European Network of Supervisory Authorities cooperate to identify third-country companies in scope, including through information about net turnover generated in the Union. The company should expect its EU-turnover position to be understandable to a supervisory authority.

The main mistake is treating 'non-EU turnover' as a general sales concept. For CSDDD scope, the relevant question is Union-generated net turnover for a company formed under third-country law, plus any group or franchising/licensing route in Article 2.

A second mistake is copying old application dates or proposal language into a scope memo. The consolidated Directive records Directive (EU) 2025/794 as an adopted amendment to Article 37, so timing notes should use the current 26 July 2028 and 26 July 2029 structure where timing is discussed.