Recital 30

(30) For the purpose of defining the scope of application of this Directive in relation to third-country companies, the described turnover criterion should be chosen as it creates a territorial connection between the third-country companies and the Union territory. Turnover is a proxy for the effects that the activities of those companies could have on the internal market. In accordance with international law, such effects justify the application of Union law to third-country companies. To ensure identification of the relevant turnover of companies concerned, the methods for calculating net turnover for third-country companies as laid down in Directive 2013/34/EU of the European Parliament and of the Council (15) should be used. To ensure effective enforcement of this Directive, an employee threshold should, in turn, not be applied to determine which third-country companies fall under this Directive, as the notion of ‘employees’ retained for the purposes of this Directive is based on Union law and could not be easily transposed outside of the Union. In the absence of a clear and consistent methodology, including in accounting frameworks, to determine the employees of third-country companies, such employee threshold would therefore create legal uncertainty and would be difficult to apply for supervisory authorities. The definition of the term ‘turnover’ should be based on Directive 2013/34/EU which has already established the methods for calculating net turnover for third-country companies, as turnover and revenue definitions are similar in international accounting frameworks. With a view to ensuring that the supervisory authority knows which third-country companies generate the turnover in the Union required to fall within the scope of this Directive, this Directive should require that the third-country company’s authorised representative or the company itself informs a supervisory authority in the Member State where the third-country company’s authorised representative is domiciled or established and, where it is different, a supervisory authority in the Member State in which the company generated most of its net turnover in the Union in the financial year preceding the last financial year that the company is a company that falls under the scope of this Directive. If necessary for determining in which Member State the third-country company generated most of its net turnover in the Union, the Member State should be able to request the Commission to inform the Member State about the net turnover of the third-country company generated in the Union. The Commission should set up a system to ensure such an exchange of information.

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Source: EUR-Lex CELLAR · retrieved 2026-08-27 · Text as adopted (Official Journal); later amendments are not incorporated in this text.