--- title: "Net turnover" description: "Net turnover (CSDDD): the turnover figure that decides scope and caps fines, following the Accounting Directive or the company's own framework." canonical: "https://gencompl.ai/glossary/net-turnover-csddd" language: "en-US" type: "Glossary term" published: "2026-10-13T21:31:43.382Z" modified: "2026-10-13T21:37:06.316Z" --- # Net turnover The ‘net turnover’, as defined in Article 2, point (5), of Directive 2013/34/EU; or, where the company applies international accounting standards adopted on the basis of Regulation (EC) No 1606/2002 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. **What does "Net turnover" mean under the CSDDD?** Defined in: [CSDDD](https://gencompl.ai/regulations/csddd) (32024L1760) [Home](https://gencompl.ai/) › [Glossary](https://gencompl.ai/glossary) › Net turnover - (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 - [CSDDD (32024L1760)](https://gencompl.ai/regulations/csddd), Article 3(1), point (m) 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. > **What we could not establish** > > Whether a group reaches a threshold depends on which entities are counted, which financial year applies and which accounting framework the statements use. Those are accounting questions as much as legal ones. We quoted Article 2, point (5), of Directive 2013/34/EU from its Official Journal text of 2013 and did not compare a consolidated version. This entry fixes the term. It does not decide whether the term catches your institution; counsel and your auditors decide that. ## 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. ## Sources - [Directive (EU) 2024/1760 on corporate sustainability due diligence](https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=OJ:L_202401760) (EUR-Lex · 13 June 2024) - [Directive 2013/34/EU on the annual financial statements of certain types of undertakings](https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32013L0034) (EUR-Lex · 26 June 2013) ## Related content ### Regulation - [Corporate Sustainability Due Diligence Directive (CSDDD)](https://gencompl.ai/regulations/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.