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Glossary termPublished inCSDDD

Net turnover

What does "Net turnover" mean under the CSDDD?

  • (i) the ‘net turnover’, as defined in Article 2, point (5), of Directive 2013/34/EU
  • (ii) where the company applies international accounting standards adopted on the basis of Regulation (EC) No 1606/2002 of the European Parliament and of the Council or is a company within the meaning of point (a)(ii), the revenue as defined by or within the meaning of the financial reporting framework on the basis of which the financial statements of the company are prepared

Article 2, point (5), of Directive 2013/34/EU:

The amounts derived from the sale of products and the provision of services after deducting sales rebates and value added tax and other taxes directly linked to turnover

Defined in / by

Last updated: 13 October 2026.

Where net turnover decides scope

Net turnover is the figure the Directive uses to decide scope and to cap penalties. An EU company is in scope when it had more than 5,000 employees on average and net worldwide turnover above EUR 1.5 billion in the last financial year for which annual financial statements have been or should have been adopted (Article 2(1), point (a)). Franchisors and licensors are caught when royalties in the Union exceeded EUR 75 million and the company or its group had net worldwide turnover above EUR 275 million (Article 2(1), point (c)). A third-country company is in scope when it generated net turnover above EUR 1.5 billion in the Union (Article 2(2), point (a)). Under Article 27(4), as replaced by Directive (EU) 2026/470, Member States must set the maximum limit of pecuniary penalties at 3 % of net worldwide turnover.

The definition follows the accounts. Under point (i), net turnover is the figure defined in Article 2, point (5), of the Accounting Directive: amounts derived from the sale of products and the provision of services, after deducting sales rebates, value added tax and other taxes directly linked to turnover. Under point (ii), a company that applies international accounting standards adopted on the basis of Regulation (EC) No 1606/2002, or is a third-country company, uses revenue as defined by or within the meaning of the financial reporting framework on which its statements are prepared.

Two companies of the same economic size can therefore report different net turnover, because the figure follows the framework in which their accounts are prepared.

Questions and answers

Is net turnover the same as profit?

No. It is the amount derived from sales and services, after deducting rebates and taxes directly linked to turnover. Other costs are not deducted.

Which framework applies to a third-country company?

Point (ii) applies to a company within the meaning of point (a)(ii) of the definition of company, and uses the revenue defined by or within the meaning of the financial reporting framework on which its financial statements are prepared.

Regulations

  • Corporate Sustainability Due Diligence Directive (CSDDD)

    The Corporate Sustainability Due Diligence Directive is Directive (EU) 2024/1760. After Omnibus I, Member States must transpose it by 26 July 2028 and apply it from 26 July 2029, to companies with more than 5,000 employees and EUR 1.5 billion in net worldwide turnover. The Netherlands has a draft bill, the Wivo, which names the ACM as supervisor.

    Next
    Commission adopts guidelines under Article 19(2), points (a), (d) and (e), and guidance on model contractual clauses (Article 18)