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SCOPE AND APPLICATION DATE

Commission Notice on the interpretation of certain legal provisions in Directive 2013/34/EU (Accounting Directive), Directive 2006/43/EC (Audit Directive), Regulation (EU) No 537/2014 (Audit Regulation), Directive 2004/109/EC (Transparency Directive), Delegated Regulation (EU) 2023/2772 (first set of European Sustainability Reporting Standards, ‘first ESRS delegated act’), and Regulation (EU) 2019/2088 (Sustainable Finance Disclosures Regulation, ‘SFDR’) as regards sustainability reporting · European Union

41) Does the ultimate third-country parent undertaking have to have a certain legal form in order to fall under the scope of Article 40a of the Accounting Directive? No. The legal form of the ultimate third-country parent undertaking is irrelevant for the purposes of Article 40a of the Accounting Directive. 42) What are the obligations for the EU subsidiary or the EU branch under Article 40a of the Accounting Directive? Is the EU subsidiary/branch required to prepare the sustainability report or just to publish and make accessible the sustainability report prepared by its parent undertaking? If a third-country undertaking falls within the scope of Article 40a of the Accounting Directive, then either its EU subsidiary or EU branch will have to publish and make accessible a sustainability report on behalf of its third-country parent undertaking. The obligation to prepare the sustainability report does not explicitly fall on the EU subsidiary or branch. This means that the third-country parent may prepare the report, which will then be published and made accessible by the EU subsidiary or branch, either by filing it in an EU business register or by publishing it on its website. Alternatively, the EU subsidiary or branch may prepare, publish and make accessible the report on behalf of its third-country parent undertaking. 43) Does each EU subsidiary or EU branch have to publish a sustainability report under Article 40a of the Accounting Directive? Or is it sufficient that only one of the EU subsidiaries or branches publishes the report and the other ones simply provide a link to that sustainability report? Article 40a of the Accounting Directive requires that at least one sustainability report be disclosed by one subsidiary or branch in each Member State (‘ A Member State shall require that a subsidiary undertaking established in its territory […]’). To avoid double reporting by the subsidiaries and branches of the same third-country undertaking, Member States may allow for one subsidiary or branch established or located in its territory to comply with the obligation in Article 40a of the Accounting Directive by providing a link to the sustainability report published by another Union subsidiary or branch of the third-country undertaking.

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Source: EUR-Lex (Cellar) · retrieved 2026-09-07