Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC Text with EEA relevance

The first subparagraph is without prejudice to Union requirements on undertakings to conduct a due diligence process.

• (a) the work of global standard-setting initiatives for sustainability reporting, and existing standards and frameworks for natural capital accounting and for greenhouse gas accounting, responsible business conduct, corporate social responsibility, and sustainable development;

• (b) the information that financial market participants need in order to comply with their disclosure obligations laid down in Regulation (EU) 2019/2088 and the delegated acts adopted pursuant to that Regulation;

• (c) the criteria, indicators and methodologies set out in the delegated acts adopted pursuant to Regulation (EU) 2020/852, including the technical screening criteria established pursuant to Article 10(3), Article 11(3), Article 12(2), Article 13(2), Article 14(2) and Article 15(2) of that Regulation and the reporting requirements set out in the delegated act adopted pursuant to Article 8 of that Regulation;

• (d) the disclosure requirements applicable to benchmark administrators in the benchmark statement and in the benchmark methodology and the minimum standards for the construction of EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks in accordance with Commission Delegated Regulations (EU) 2020/1816 ([^E0021]), (EU) 2020/1817 ([^E0022]) and (EU) 2020/1818 ([^E0023]);

• (e) the disclosures specified in the implementing acts adopted pursuant to Article 434a of Regulation (EU) No 575/2013;

• (f) Commission Recommendation 2013/179/EU ([^E0024]);

• (g) Directive 2003/87/EC of the European Parliament and of the Council ([^E0025]);

• (h) Regulation (EU) 2021/1119;

• (i) Regulation (EC) No 1221/2009 of the European Parliament and of the Council ([^E0026]);

• (j) Directive (EU) 2019/1937 of the European Parliament and of the Council ([^E0027]).

Article 29ca

Sustainability reporting standards for voluntary use

CHAPTER 6b SINGLE ELECTRONIC REPORTING FORMAT

Article 29d

Single electronic reporting format

CHAPTER 6c DIGITAL SUPPORT MEASURES

Article 29e

Digital portal for sustainability reporting

The Commission shall provide for a dedicated portal through which undertakings can access information, guidance and support, including relevant templates, with regard to the mandatory and voluntary sustainability reporting framework referred to in this Directive. The portal shall be interconnected with online support measures provided by Member States, where available, to take account of national context.

Article 29f

Report on technological solutions for sustainability reporting

The Commission shall, by 19 March 2028, submit a report to the European Parliament and the Council on technological solutions for sustainability reporting, which includes initiatives that will enable undertakings to collect, process and exchange data in a secure, seamless and automated manner.

CHAPTER 7 PUBLICATION

Article 30

General publication requirement

Member States may require undertakings subject to Articles 19a and 29a to make the management report available to the public on their website, free of charge. Where an undertaking does not have a website, Member States may require it to make a written copy of its management report available upon request.

Where an independent assurance services provider expresses the opinion referred to in point (aa) of the second subparagraph of Article 34(1), that opinion shall be published together with the documents referred to in the first subparagraph of this paragraph.

Member States may, however, exempt undertakings from the obligation to publish the management report where a copy of all or part of any such report can be easily obtained upon request at a price not exceeding its administrative cost.

The exemption laid down in the fourth subparagraph of this paragraph shall not apply to undertakings subject to the requirements on sustainability reporting laid down in Articles 19a and 29a.

• (a) all the members of the undertaking concerned that have unlimited liability are undertakings referred to in Annex I governed by the laws of Member States other than the Member State whose law governs that undertaking, and none of those undertakings publishes the financial statements of the undertaking concerned with its own financial statements;

• (b) all the members of the undertaking concerned that have unlimited liability are undertakings which are not governed by the laws of a Member State but which have a legal form comparable to those referred to in Directive 2009/101/EC.

Copies of the financial statements shall be obtainable upon request. The price of such a copy may not exceed its administrative cost.

Where the undertaking drawing up the consolidated financial statements is established as one of the types of undertaking listed in Annex II and is not required by the national law of its Member State to publish the documents referred to in paragraph 1 in the same manner as prescribed in Article 3 of Directive 2009/101/EC, it shall, as a minimum, make those documents available to the public at its head office and a copy shall be provided upon request, the price of which shall not exceed its administrative cost.

Article 31

Simplifications for small and medium-sized undertakings

• (a) abridged balance sheets showing only those items preceded by letters and roman numerals in Annexes III and IV and disclosing separately, either in the balance sheet or in the notes to the financial statements:
• (i) C (I) (3), C (II) (1), (2), (3) and (4), C (III) (1), (2), (3) and (4), D (II) (2), (3) and (6) and D (III) (1) and (2) under ‘Assets’ and C, (1), (2), (6), (7) and (9) under ‘Capital, reserves and liabilities’ in Annex III,
• (ii) C (I) (3), C (II) (1), (2), (3) and (4), C (III) (1), (2), (3) and (4), D (II) (2), (3) and (6), D (III) (1) and (2), F (1), (2), (6), (7) and (9) and (I) (1), (2), (6), (7) and (9) in Annex IV,
• (iii) the information required as indicated in brackets in D (II) under ‘Assets’ and C under ‘Capital, reserves and liabilities’ in Annex III, in total for all the items concerned and separately for D (II) (2) and (3) under ‘Assets’ and C (1), (2), (6), (7) and (9) under ‘Capital, reserves and liabilities’,
• (iv) the information required as indicated in brackets in D (II) in Annex IV, in total for all the items concerned, and separately for D (II) (2) and (3);

• (b) abridged notes to their financial statements without the information required in points (f) and (j) of Article 17(1).

This paragraph shall be without prejudice to Article 30(1), in so far as that Article relates to the profit and loss account, the management report and the opinion of the statutory auditor or audit firm.

Article 32

Other publication requirements

• (a) indicate that the version published is abridged;

• (b) refer to the register in which the financial statements have been filed in accordance with Article 3 of Directive 2009/101/EC or, where the financial statements have not yet been filed, disclose that fact;

• (c) disclose whether an unqualified, qualified or adverse audit opinion was expressed by the statutory auditor or audit firm, or whether the statutory auditor or audit firm was unable to express an audit opinion;

• (d) disclose whether the audit report included a reference to any matters to which the statutory auditor or audit firm drew attention by way of emphasis without qualifying the audit opinion.

Article 33

Responsibility and liability for drawing up and publishing the financial statements and the management report

• (a) the annual financial statements, the management report and the corporate governance statement when provided separately; and

• (b) the consolidated financial statements, the consolidated management report and the consolidated corporate governance statement when provided separately.

By way of derogation from the first subparagraph of this paragraph, Member States may provide that the members of the administrative, management and supervisory bodies of an undertaking, acting within the competences assigned to them by national law, do not have collective responsibility for ensuring that the management report, or consolidated management report, as applicable, is prepared in accordance with Article 29d.

Article 33a

Accessibility of information on the European single access point

Member States shall ensure that the information complies with the following requirements:

• (a) be submitted in a data extractable format as defined in Article 2, point (3), of Regulation (EU) 2023/2859 or, where required by Union or national law, in a machine-readable format, as defined in Article 2, point (4), of that Regulation;

• (b) be accompanied by the following metadata:
• (i) all the names of the undertaking to which the information relates and, where the reporting undertaking is an exempted subsidiary undertaking as referred to in Article 29a(4), second subparagraph, the name of the parent undertaking that reports information at group level;
• (ii) the legal entity identifier of the undertaking and, where the reporting undertaking is an exempted subsidiary undertaking as referred to in Article 29a(4), second subparagraph, where available, the legal entity identifier of the parent undertaking that reports information at group level, as specified pursuant to Article 7(4), point (b), of Regulation (EU) 2023/2859;
• (iii) the size of the undertaking by category, as specified pursuant to Article 7(4), point (d), of that Regulation;
• (iv) the industry sector(s) of the economic activities of the undertaking, as specified pursuant to Article 7(4), point (e), of that Regulation;
• (v) the type of information, as classified pursuant to Article 7(4), point (c), of that Regulation;
• (vi) an indication of whether the information contains personal data.

• (a) any other metadata to accompany the information;

• (b) the structuring of data in the information;

• (c) for which information a machine-readable format is required and, in such cases, which machine-readable format is to be used.

CHAPTER 8 AUDITING AND ASSURANCE OF SUSTAINABILITY REPORTING

Article 34

General requirement

The statutory auditor(s) or audit firm(s) shall also:

• (a) express an opinion on:
• (i) whether the management report is consistent with the financial statements for the same financial year, and
• (ii) whether the management report has been prepared in accordance with the applicable legal requirements, excluding the requirements on sustainability reporting laid down in Article 19a of this Directive;

• (aa) where applicable, express an opinion based on a limited assurance engagement as regards the compliance of the sustainability reporting with the requirements of this Directive, including the compliance of the sustainability reporting with the sustainability reporting standards adopted pursuant to Article 29b, the process carried out by the undertaking to identify the information reported pursuant to those sustainability reporting standards, and the compliance with the requirement to mark up sustainability reporting in accordance with Article 29d, and as regards the compliance with the reporting requirements provided for in Article 8 of Regulation (EU) 2020/852;

• (b) state whether, in the light of the knowledge and understanding of the undertaking and its environment obtained in the course of the audit, he, she or it has identified material misstatements in the management report, and shall give an indication of the nature of any such misstatements.

2a. Member States shall ensure that the opinion referred to in paragraph 1, second subparagraph, point (aa), is prepared in a manner that fully respects the right of the undertakings in the value chain which, on their balance sheet dates, do not exceed an average number of 1 000 employees during the preceding financial year to decline to provide to the reporting undertaking any information that exceeds the information specified in the standards for voluntary use referred to in Article 29ca.

• (a) training and examination, ensuring that independent assurance services providers acquire the necessary expertise concerning sustainability reporting and the assurance of sustainability reporting;

• (b) continuing education;

• (c) quality assurance systems;

• (d) professional ethics, independence, objectivity, confidentiality and professional secrecy;

• (e) appointment and dismissal;

• (f) investigations and sanctions;

• (g) the organisation of the work of the independent assurance services provider, in particular in terms of sufficient resources and personnel and the maintenance of client account records and files; and

• (h) reporting irregularities.

Member States shall ensure that, where an independent assurance services provider expresses the opinion referred to in point (aa) of the second subparagraph of paragraph 1 of this Article, that opinion is prepared in accordance with Articles 26a, 27a and 28a of Directive 2006/43/EC and that, where applicable, the audit committee, or a dedicated committee, reviews and monitors the independence of the independent assurance services provider in accordance with point (e) of Article 39(6) of Directive 2006/43/EC.

Member States shall ensure that independent assurance services providers accredited before 1 January 2024 for the assurance of sustainability reporting, in accordance with Regulation (EC) No 765/2008, are not subject to the training and examination requirements referred to in point (a) of the first subparagraph of this paragraph.

Member States shall ensure that independent assurance services providers that on 1 January 2024 are undergoing the accreditation process in accordance with the relevant national requirements are not subject to the training and examination requirements referred to in point (a) of the first subparagraph as regards the assurance of sustainability reporting, provided they complete that process by 1 January 2026.

Member States shall ensure that the independent assurance services providers referred to in the third and fourth subparagraphs acquire the necessary knowledge in sustainability reporting and the assurance of sustainability reporting via the continuing education requirement referred to in point (b) of the first subparagraph.

If a Member State, pursuant to the first subparagraph, decides to allow an independent assurance services provider to express the opinion referred to in point (aa) of the second subparagraph of paragraph 1, it shall also allow a statutory auditor other than the one(s) carrying out the statutory audit of financial statements to do so, as provided for in paragraph 3.

The home Member State shall be responsible for the supervision of the independent assurance services providers established in its territory, unless the host Member State decides to supervise the assurance of sustainability reporting carried out by independent assurance services providers in its territory.

If the host Member State decides to supervise the assurance of sustainability reporting carried out in its territory by independent assurance services providers registered in another Member State, the host Member State shall:

• (a) not impose more stringent requirements or liability on such independent assurance services providers than those required for assurance of sustainability reporting by the national laws for the independent assurance services providers or auditors established in that host Member State; and

• (b) inform other Member States about its decision to supervise the assurance of sustainability reporting carried out by independent assurance services providers established in other Member States.

Article 35

Amendment of Directive 2006/43/EC as regards the audit report

Article 28 of Directive 2006/43/EC is replaced by the following:

‘Article 28

Audit reporting

1. The audit report shall include:

• (a) an introduction which shall, as a minimum, identify the financial statements that are the subject of the statutory audit, together with the financial reporting framework that has been applied in their preparation;

• (b) a description of the scope of the statutory audit which shall, as a minimum, identify the auditing standards in accordance with which the statutory audit was conducted;

• (c) an audit opinion, which shall be either unqualified, qualified or an adverse opinion and shall state clearly the opinion of the statutory auditor as to:
• (i) whether the annual financial statements give a true and fair view in accordance with the relevant financial reporting framework, and,
• (ii) where appropriate, whether the annual financial statements comply with statutory requirements. If the statutory auditor is unable to express an audit opinion, the report shall contain a disclaimer of opinion;

• (d) a reference to any matters to which the statutory auditor draws attention by way of emphasis without qualifying the audit opinion;

• (e) the opinion and statement referred to in the second subparagraph of Article 34(1) of Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC ([^E0033]).

1. The audit report shall be signed and dated by the statutory auditor. Where an audit firm carries out the statutory audit, the audit report shall bear the signature of at least the statutory auditor(s) carrying out the statutory audit on behalf of the audit firm. In exceptional circumstances Member States may provide that such signature(s) need not be disclosed to the public if such disclosure could lead to an imminent and significant threat to the personal security of any person. In any case the name(s) of the person(s) involved shall be known to the relevant competent authorities.

1. The audit report on the consolidated financial statements shall comply with the requirements set out in of paragraphs 1 and 2. In reporting on the consistency of the management report and the financial statements as required by point (e) of paragraph 1, the statutory auditor or audit firm shall consider the consolidated financial statements and the consolidated management report. Where the annual financial statements of the parent undertaking are attached to the consolidated financial statements, the audit reports required by this Article may be combined.

CHAPTER 9 PROVISIONS CONCERNING EXEMPTIONS AND RESTRICTIONS ON EXEMPTIONS

Article 36

Exemptions for micro-undertakings

• (a) the obligation to present ‘Prepayments and accrued income’ and ‘Accruals and deferred income’. Where a Member State makes use of that option, it may permit those undertakings, only in respect of other charges as referred to in point (b)(vi) of paragraph 2 of this Article, to depart from point (d) of Article 6(1) with regard to the recognition of ‘Prepayments and accrued income’ and ‘Accruals and deferred income’, provided that this fact is disclosed in the notes to the financial statements or, in accordance with point (b) of this paragraph, at the foot of the balance sheet;

• (b) the obligation to draw up notes to the financial statements in accordance with Article 16, provided that the information required by points (d) and (e) of Article 16(1) of this Directive and by Article 24(2) of Directive 2012/30/EU is disclosed at the foot of the balance sheet;

• (c) the obligation to prepare a management report in accordance with Chapter 5, provided that the information required by Article 24(2) of Directive 2012/30/EU is disclosed in the notes to the financial statements or, in accordance with point (b) of this paragraph, at the foot of the balance sheet;

• (d) the obligation to publish annual financial statements in accordance with Chapter 7 of this Directive, provided that the balance sheet information contained therein is duly filed, in accordance with national law, with at least one competent authority designated by the Member State concerned. Whenever the competent authority is not the central register, commercial register or companies register, as referred to in Article 3(1) of Directive 2009/101/EC, the competent authority is required to provide the register with the information filed.

• (a) to draw up only an abridged balance sheet showing separately at least those items preceded by letters in Annexes III or IV, where applicable. In cases where point (a) of paragraph 1 of this Article applies, items E under ‘Assets’ and D under ‘Liabilities’ in Annex III or items E and K in Annex IV shall be excluded from the balance sheet;

• (b) to draw up only an abridged profit and loss account showing separately at least the following items, where applicable:
• (i) net turnover,
• (ii) other income,
• (iii) cost of raw materials and consumables,
• (iv) staff costs,
• (v) value adjustments,
• (vi) other charges,
• (vii) tax,
• (viii) profit or loss.

Article 37

Exemption for subsidiary undertakings

Notwithstanding the provisions of Directives 2009/101/EC and 2012/30/EU, a Member State shall not be required to apply the provisions of this Directive concerning the content, auditing and publication of the annual financial statements and the management report to undertakings governed by their national laws which are subsidiary undertakings, where the following conditions are fulfilled:

• (1) the parent undertaking is subject to the laws of a Member State;

• (2) all shareholders or members of the subsidiary undertaking have, in respect of each financial year in which the exemption is applied, declared their agreement to the exemption from such obligation;

• (3) the parent undertaking has declared that it guarantees the commitments entered into by the subsidiary undertaking;

• (4) the declarations referred to in points (2) and (3) of this Article are published by the subsidiary undertaking as laid down by the laws of the Member State in accordance with Chapter 2 of Directive 2009/101/EC;

• (5) the subsidiary undertaking is included in the consolidated financial statements drawn up by the parent undertaking in accordance with this Directive;

• (6) the exemption is disclosed in the notes to the consolidated financial statements drawn up by the parent undertaking; and

• (7) the consolidated financial statements referred to in point (5) of this Article, the consolidated management report, and the audit report are published for the subsidiary undertaking as laid down by the laws of the Member State in accordance with Chapter 2 of Directive 2009/101/EC.

Article 38

Undertakings which are members having unlimited liability of other undertakings

• (a) the financial statements of the undertaking concerned are drawn up, audited and published in accordance with the provisions of this Directive by an undertaking which:
• (i) is a member having unlimited liability of that undertaking concerned, and
• (ii) is governed by the laws of another Member State;

• (b) the undertaking concerned is included in consolidated financial statements drawn up, audited and published in accordance with this Directive by:
• (i) a member having unlimited liability, or
• (ii) where the undertaking concerned is included in the consolidated financial statements of a larger body of undertakings drawn up, audited and published in conformity with this Directive, a parent undertaking governed by the laws of a Member State. This exemption shall be disclosed in the notes to the consolidated financial statements.

Article 39

Profit and loss account exemption for parent undertakings preparing consolidated financial statements

A Member State shall not be required to apply the provisions of this Directive concerning the auditing and publication of the profit and loss account to undertakings governed by its national laws which are parent undertakings, provided that the following conditions are fulfilled:

• (1) the parent undertaking draws up consolidated financial statements in accordance with this Directive and is included in those consolidated financial statements;

• (2) the exemption is disclosed in the notes to the annual financial statements of the parent undertaking;

• (3) the exemption is disclosed in the notes to the consolidated financial statements drawn up by the parent undertaking; and

• (4) the profit or loss of the parent undertaking, determined in accordance with this Directive, is shown in its balance sheet.

Article 40

Restriction of exemptions for public-interest entities

Unless expressly provided for in this Directive, Member States shall not make the simplifications and exemptions set out in this Directive available to public-interest entities. A public-interest entity shall be treated as a large undertaking regardless of its net turnover, balance sheet total or average number of employees during the financial year.

CHAPTER 9a REPORTING CONCERNING THIRD-COUNTRY UNDERTAKINGS

Article 40a

Sustainability reports concerning third-country undertakings

The first subparagraph shall only apply to subsidiary undertakings which, on their balance sheet dates, exceed a net turnover of EUR 200 000 000 in the preceding financial year.

A Member State shall require that a branch located in its territory, and which is a branch of an undertaking governed by the law of a third country, which is either not part of a group or is ultimately held by an undertaking that is formed in accordance with the law of a third country publish and make accessible a sustainability report covering the information specified in points (a)(iii) to (a)(v), points (b) to (f) and, where appropriate, point (h) of Article 29a(2), at the group level, or, if not applicable, the individual level, of the third-country undertaking.

The rule referred to in the third subparagraph shall only apply to a branch where the third-country undertaking does not have a subsidiary undertaking as referred to in the first subparagraph, and where the branch generated a net turnover exceeding EUR 200 000 000 in the preceding financial year.

The first and third subparagraphs shall only apply to the subsidiary undertakings or branches referred to in those subparagraphs where the third-country undertaking, at its group level, or, if not applicable, the individual level, generated a net turnover in the Union exceeding EUR 450 000 000 for each of the last two consecutive financial years.

Member States may require subsidiary undertakings or branches referred to in the first and third subparagraphs to send them information about the net turnover generated in their territory and in the Union by the third-country undertakings.

By way of derogation from the first and third subparagraphs, where the third-country undertaking is a financial holding undertaking whose subsidiary undertakings’ business models and operations are independent of one another, Member States shall ensure that the subsidiaries and the branches may decide not to publish and make accessible the sustainability report referred to in the first and third subparagraphs.

By way of derogation from the first subparagraph of this paragraph, the sustainability report referred to in paragraph 1 of this Article may be drawn up in accordance with the sustainability reporting standards adopted pursuant to Article 29b or in a manner equivalent to those sustainability reporting standards, as determined in accordance with an implementing act on the equivalence of sustainability reporting standards adopted pursuant to the third subparagraph of Article 23(4) of Directive 2004/109/EC.

Where the information required to draw up the sustainability report referred to in the first subparagraph of this paragraph is not available, the subsidiary undertaking or branch referred to in paragraph 1 shall request the third-country undertaking to provide them with all information necessary to enable them to meet their obligations.

In the event that not all the required information is provided, the subsidiary undertaking or branch referred to in paragraph 1 shall draw up, publish and make accessible the sustainability report referred to in paragraph 1, containing all information in its possession, obtained or acquired, and issue a statement indicating that the third-country undertaking did not make the necessary information available.

In the event that the third-country undertaking does not provide the assurance opinion in accordance with the first subparagraph, the subsidiary undertaking or branch shall issue a statement indicating that the third-country undertaking did not make the necessary assurance opinion available.

Article 40b

Sustainability reporting standards for third-country undertakings

The Commission shall adopt by  30 June 2026 a delegated act in accordance with Article 49 supplementing this Directive to provide for sustainability reporting standards for third-country undertakings that specify the information that is to be included in the sustainability reports referred to in Article 40a.

Article 40c

Responsibility for drawing up, publishing and making accessible sustainability reports concerning third-country undertakings

Member States shall provide that the branches of third-country undertakings are responsible for ensuring, to the best of their knowledge and ability, that their sustainability report is drawn up in accordance with Article 40a, and that that report is published and made accessible in accordance with Article 40d.

Member States shall provide that the members of the administrative, management and supervisory bodies of the subsidiary undertakings referred to in Article 40a have collective responsibility for ensuring, to the best of their knowledge and ability, that their sustainability report is drawn up in accordance with Article 40a, and that that report is published and made accessible in accordance with Article 40d.

Article 40d

Publication

CHAPTER 10 REPORT ON PAYMENTS TO GOVERNMENTS

Article 41

Definitions relating to reporting on payments to governments

For the purpose of this Chapter, the following definitions shall apply:

• (1) ‘undertaking active in the extractive industry’ means an undertaking with any activity involving the exploration, prospection, discovery, development, and extraction of minerals, oil, natural gas deposits or other materials, within the economic activities listed in Section B, Divisions 05 to 08 of Annex I to Regulation (EC) No 1893/2006 of the European Parliament and of the Council of 20 December 2006 establishing the statistical classification of economic activities NACE Revision 2 ([^E0035]);

• (2) ‘undertaking active in the logging of primary forests’ means an undertaking with activities as referred to in Section A, Division 02, Group 02.2 of Annex I to Regulation (EC) No 1893/2006, in primary forests;

• (3) ‘government’ means any national, regional or local authority of a Member State or of a third country. It includes a department, agency or undertaking controlled by that authority as laid down in Article 22(1) to (6) of this Directive;

• (4) ‘project’ means the operational activities that are governed by a single contract, license, lease, concession or similar legal agreements and form the basis for payment liabilities with a government. None the less, if multiple such agreements are substantially interconnected, this shall be considered a project;

• (5) ‘payment’ means an amount paid, whether in money or in kind, for activities, as described in points 1 and 2, of the following types:
• (a) production entitlements;
• (b) taxes levied on the income, production or profits of companies, excluding taxes levied on consumption such as value added taxes, personal income taxes or sales taxes;
• (c) royalties;
• (d) dividends;
• (e) signature, discovery and production bonuses;
• (f) licence fees, rental fees, entry fees and other considerations for licences and/or concessions; and
• (g) payments for infrastructure improvements.

Article 42

Undertakings required to report on payments to governments

• (a) the parent undertaking is subject to the laws of a Member State; and

• (b) the payments to governments made by the undertaking are included in the consolidated report on payments to governments drawn up by that parent undertaking in accordance with Article 44.

Article 43

Content of the report

• (a) the total amount of payments made to each government;

• (b) the total amount per type of payment as specified in points (5)(a) to (g) of Article 41 made to each government;

• (c) where those payments have been attributed to a specific project, the total amount per type of payment as specified in point (5)(a) to (g) of Article 41, made for each such project and the total amount of payments for each such project.

Payments made by the undertaking in respect of obligations imposed at entity level may be disclosed at the entity level rather than at project level.

• (a) applying the exchange rate published in the Official Journal of the European Union as at the date of the entry into force of any Directive fixing that threshold, and

• (b) rounding to the nearest hundred.

Article 44

Consolidated report on payments to governments

A parent undertaking is considered to be active in the extractive industry or the logging of primary forests if any of its subsidiary undertakings are active in the extractive industry or the logging of primary forests.

The consolidated report shall only include payments resulting from extractive operations and/or operations relating to the logging of primary forests.

• (a) a parent undertaking of a small group, as defined in Article 3(5), except where any affiliated undertaking is a public-interest entity;

• (b) a parent undertaking of a medium-sized group, as defined in Article 3(6), except where any affiliated undertaking is a public-interest entity; and

• (c) a parent undertaking governed by the law of a Member State which is also a subsidiary undertaking, if its own parent undertaking is governed by the law of a Member State.

• (a) severe long-term restrictions substantially hinder the parent undertaking in the exercise of its rights over the assets or management of that undertaking;

• (b) extremely rare cases where the information necessary for the preparation of the consolidated report on payments to governments in accordance with this Directive cannot be obtained without disproportionate expense or undue delay;

• (c) the shares of that undertaking are held exclusively with a view to their subsequent resale.

The above exemptions shall apply only if they are also used for the purposes of the consolidated financial statements.

Article 45

Publication

Article 46

Equivalence criteria

• (a) include the following:
• (i) target undertakings,
• (ii) target recipients of payments,
• (iii) payments captured,
• (iv) attribution of payments captured,
• (v) breakdown of payments captured,
• (vi) triggers for reporting on a consolidated basis,
• (vii) reporting medium,
• (viii) frequency of reporting, and
• (ix) anti-evasion measures;

• (b) otherwise be limited to criteria which facilitate a direct comparison of third-country reporting requirements with the requirements of this Chapter.

Article 47

Application of equivalence criteria

The Commission shall be empowered to adopt implementing acts identifying those third-country reporting requirements which, after applying the equivalence criteria identified in accordance with Article 46, it considers equivalent to the requirements of this Chapter. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 50(2).

Article 48

Review

The Commission shall review and report on the implementation and effectiveness of this Chapter, in particular as regards the scope of, and compliance with, the reporting obligations and the modalities of the reporting on a project basis.

The review shall take into account international developments, in particular with regard to enhancing transparency of payments to governments, assess the impacts of other international regimes and consider the effects on competitiveness and security of energy supply. It shall be completed by 21 July 2018.

The report shall be submitted to the European Parliament and to the Council, together with a legislative proposal, if appropriate. That report shall consider the extension of the reporting requirements to additional industry sectors and whether the report on payments to governments should be audited. The report shall also consider the disclosure of additional information on the average number of employees, the use of subcontractors and any pecuniary penalties administered by a country.

The report shall also consider, taking into account developments in the OECD and the results of related European initiatives, the possibility of introducing an obligation requiring large undertakings to produce on an annual basis a country-by-country report for each Member State and third country in which they operate, containing information on, as a minimum, profits made, taxes paid on profits and public subsidies received.

In addition, the report shall analyse the feasibility of the introduction of an obligation for all Union issuers to carry out due diligence when sourcing minerals to ensure that supply chains have no connection to conflict parties and respect the EITI and OECD recommendations on responsible supply chain management.

CHAPTER 10a REPORT ON INCOME TAX INFORMATION

Article 48a

Definitions relating to reporting on income tax information

• (1) ‘ultimate parent undertaking’ means an undertaking which draws up the consolidated financial statements of the largest body of undertakings;

• (2) ‘consolidated financial statements’ means the financial statements prepared by a parent undertaking of a group, in which the assets, liabilities, equity, income and expenses are presented as those of a single economic entity;

• (3) ‘tax jurisdiction’ means a State or non-State jurisdiction which has fiscal autonomy in respect of corporate income tax;

• (4) ‘standalone undertaking’ means an undertaking which is not part of a group as defined in Article 2, point (11).

• (a) ‘net turnover’, for undertakings governed by the law of a Member State that do not apply international accounting standards adopted on the basis of Regulation (EC) No 1606/2002; or

• (b) ‘revenue’ as defined by or within the meaning of the financial reporting framework on the basis of which the financial statements are prepared, for other undertakings.

Article 48b

Undertakings and branches required to report on income tax information

Member States shall provide for an ultimate parent undertaking to no longer be subject to the reporting obligations set out in the first subparagraph where the total consolidated revenue on its balance sheet date falls below EUR 750 000 000 for each of the last two consecutive financial years as reflected in its consolidated financial statements.

Member States shall require standalone undertakings governed by their national laws, where the revenue on their balance sheet date exceeded for each of the last two consecutive financial years a total of EUR 750 000 000 , as reflected in their annual financial statements, to draw up, publish and make accessible a report on income tax information as regards the latter of those two consecutive financial years.

Member States shall provide for a standalone undertaking to no longer be subject to the reporting obligations set out in the third subparagraph where the total revenue on its balance sheet date falls below EUR 750 000 000 for each of the last two consecutive financial years as reflected in its financial statements.

Where that information or report is not available, the subsidiary undertaking shall request its ultimate parent undertaking to provide it with all information required to enable it to meet its obligations under the first subparagraph. If the ultimate parent undertaking does not provide all the required information, the subsidiary undertaking shall draw up, publish and make accessible a report on income tax information containing all information in its possession, obtained or acquired, and a statement indicating that its ultimate parent undertaking did not make the necessary information available.

Member States shall provide for medium-sized and large subsidiary undertakings to no longer be subject to the reporting obligations set out in this paragraph where the total consolidated revenue of the ultimate parent undertaking on its balance sheet date falls below EUR 750 000 000 for each of the last two consecutive financial years as reflected in its consolidated financial statements.

Where that information or report is not available, the person or persons designated to carry out the disclosure formalities referred to in Article 48e(2) shall request the ultimate parent undertaking or the standalone undertaking referred to in the sixth subparagraph, point (a), of this paragraph to provide them with all information necessary to enable them to meet their obligations.

In the event that not all the required information is provided, the branch shall draw up, publish and make accessible a report on income tax information, containing all information in its possession, obtained or acquired, and a statement indicating that the ultimate parent undertaking or the standalone undertaking did not make the necessary information available.

Member States shall provide for the reporting obligations set out in this paragraph to apply only to branches which have a net turnover that exceeded the threshold as transposed pursuant to Article 3(2) for each of the last two consecutive financial years.

Member States shall provide for a branch subject to the reporting obligations under this paragraph to no longer be subject to those obligations where its net turnover falls below the threshold as transposed pursuant to Article 3(2) for each of the last two consecutive financial years.

Member States shall provide that the rules set out in this paragraph apply to a branch only where the following criteria are met:

• (a) the undertaking that opened the branch is either an affiliated undertaking of a group whose ultimate parent undertaking is not governed by the law of a Member State and the consolidated revenue of which on its balance sheet date exceeded for each of the last two consecutive financial years a total of EUR 750 000 000 , as reflected in its consolidated financial statements, or a standalone undertaking the revenue of which on its balance sheet date exceeded for each of the last two consecutive financial years a total of EUR 750 000 000 as reflected in its financial statements; and

• (b) the ultimate parent undertaking referred to in point (a) of this subparagraph does not have a medium-sized or large subsidiary undertaking as referred to in paragraph 4.

Member States shall provide for a branch to no longer be subject to the reporting obligations set out in this paragraph where the criterion provided for in point (a) ceases to be met for two consecutive financial years.

• (a) it is made accessible to the public, free of charge and in an electronic reporting format which is machine-readable:
• (i) on the website of that ultimate parent undertaking or of that standalone undertaking;
• (ii) in at least one of the official languages of the Union;
• (iii) no later than 12 months after the balance sheet date of the financial year for which the report is drawn up; and

• (b) it identifies the name and the registered office of a single subsidiary undertaking, or the name and the address of a single branch governed by the law of a Member State, which has published a report in accordance with Article 48d(1).

Article 48c

Content of the report on income tax information

• (a) the name of the ultimate parent undertaking or the standalone undertaking, the financial year concerned, the currency used for the presentation of the report and, where applicable, a list of all subsidiary undertakings consolidated in the financial statements of the ultimate parent undertaking, in respect of the relevant financial year, established in the Union or in tax jurisdictions included in Annexes I and II to the Council conclusions on the revised EU list of non-cooperative jurisdictions for tax purposes;

• (b) a brief description of the nature of their activities;

• (c) the number of employees on a full-time equivalent basis;

• (d) revenues, which are to be calculated as:
• (i) the sum of the net turnover, other operating income, income from participating interests, excluding dividends received from affiliated undertakings, income from other investments and loans forming part of the fixed assets, other interest receivable and similar income as listed in Annexes V and VI to this Directive; or
• (ii) the income as defined by the financial reporting framework on the basis of which the financial statements are prepared, excluding value adjustments and dividends received from affiliated undertakings;

• (e) the amount of profit or loss before income tax;

• (f) the amount of income tax accrued during the relevant financial year, which is to be calculated as the current tax expense recognised on taxable profits or losses of the financial year by undertakings and branches in the relevant tax jurisdiction;

• (g) the amount of income tax paid on a cash basis, which is to be calculated as the amount of income tax paid during the relevant financial year by undertakings and branches in the relevant tax jurisdiction; and

• (h) the amount of accumulated earnings at the end of the relevant financial year.

For the purposes of point (d), the revenues shall include transactions with related parties.