EUDR group structures: how consolidation affects your size band

Being part of a group does not change your EUDR size band. The Commission has confirmed that each legal entity is tested on its own balance sheet total, net turnover and headcount — the group-consolidation rule that normally applies under EU accounting law is switched off for this purpose. A small subsidiary of a large multinational can still be "small" under the EUDR, with everything that status carries: the later 30 June 2027 date on non-timber products, and eligibility for the Article 4a simplified declaration if it also sources from low-risk countries and produces what it sells.

That answer is easy to get wrong, because it runs against the general EU rule most finance and compliance teams already know. This page sets out why the EUDR is different, what the Commission's guidance actually says, and where group membership still matters even though size doesn't.

Why this looks like a consolidation question in the first place

Under Directive 2013/34/EU — the Accounting Directive that the EUDR borrows its size categories from — a subsidiary that forms part of a group required to draw up consolidated accounts is not sized on its own numbers. Articles 3(6) and 3(7) define small, medium-sized and large groups by testing the parent's consolidated balance sheet, turnover and headcount, and that consolidated test is what normally decides whether a subsidiary gets SME treatment elsewhere in EU law — state aid rules and the Commission's SME Recommendation 2003/361/EC both work this way.

So the assumption that EUDR follows the same logic is reasonable. It is also, according to the Commission's own guidance, wrong.

What the Commission's FAQ actually says

The Commission's Frequently Asked Questions on EUDR implementation address this directly: the size thresholds are to be examined per legal entity, and consolidation at group level does not take place. The FAQ goes further and says explicitly that the SME Recommendation 2003/361/EC — the instrument that normally governs linked-and-partner-enterprise aggregation across EU law — does not apply to the EUDR. National thresholds used for other purposes are likewise irrelevant; only the Directive 2013/34/EU figures, as uprated by Delegated Directive (EU) 2023/2775, decide your band.

Practically, that means a French subsidiary with €2m turnover and 10 staff is tested only against its own figures, even if its German parent reports €200m turnover and 1,000 staff. Run separately, the French entity is micro or small; run consolidated with the parent, it would be large. The Commission's answer is: run it separately.

Test	What it measures	Does EUDR use it?
Standalone entity (Directive 2013/34/EU Art. 3(1)-(4))	That one company's own balance sheet, turnover, headcount	Yes — this is the only test the FAQ applies
Consolidated group (Directive 2013/34/EU Art. 3(6)-(7))	Parent plus subsidiaries combined	No, per Commission FAQ
SME Recommendation 2003/361/EC linked/partner enterprises	Ownership and control links across separate entities	No, per Commission FAQ
National SME thresholds	Member State-specific definitions used for other schemes	No

EUDR deadline 2026: which application date applies to you sets out the size bands themselves and the dates attached to each. Its description of group consolidation predates this clarification and should be read alongside this page, not instead of it.

The size bands, tested per entity

The thresholds, uprated for inflation by Delegated Directive (EU) 2023/2775 and unchanged by the December 2025 amendment, are the ones you apply to the entity placing the product on the market or trading it — not to the group it sits inside.

Category	Employees	Net turnover	Balance sheet total
Micro	≤ 10	≤ €900,000	≤ €450,000
Small	≤ 50	≤ €10,000,000	≤ €5,000,000
Medium	≤ 250	≤ €50,000,000	≤ €25,000,000
Large	exceeds two of the medium criteria

You stay in a band unless you exceed, or cease to exceed, two of its three criteria for two consecutive financial years — a single unusual year does not reclassify you.

Where group membership still matters, even though size doesn't

Dropping the consolidation test does not make the group irrelevant. Three things still follow from being part of one:

• Each entity needs its own Information System account. A subsidiary that is itself an operator or trader registers and files separately in TRACES NT. The parent cannot file on a subsidiary's behalf by virtue of ownership alone, and the first downstream recipient of a due diligence statement reference number can be another member of the same group.
• Each entity checks its own thresholds for its own obligations. If a small subsidiary is a downstream operator, downstream operators and traders generally no longer file their own due diligence statement — but whether it is itself required to register in the Information System as a non-SME still turns on its own size, tested separately from its parent.
• Authorised representatives cross the group boundary, size doesn't. A non-EU parent placing products on the EU market through an EU subsidiary, or appointing a representative, is a genuinely group-shaped question — see EUDR authorised representative: when a non-EU business actually needs one. That is a different mechanism from size classification and is unaffected by anything on this page.
• CSRD does consolidate, and that is a separate regime. If your group reports under the Corporate Sustainability Reporting Directive, that reporting obligation is assessed on a consolidated basis in a way EUDR size status is not. Do not assume the two regimes classify your entity the same way — EUDR and CSRD: how the reporting obligations overlap sets out where they diverge.

A worked example

A UK-headquartered packaging group has three subsidiaries: a 400-employee German manufacturing entity, a 30-employee French distribution entity with €4m turnover, and an 8-employee Polish sourcing office with €600,000 turnover. Tested as a consolidated group, every entity would be large. Tested per entity, as the Commission's FAQ requires: the German entity is large and must comply from 30 December 2026; the French entity is small, with a €10m turnover ceiling and a €5m balance sheet ceiling it does not breach, and gets 30 June 2027 if its products were never under the EU Timber Regulation; the Polish office is micro, and may also qualify for the Article 4a simplified declaration if it sources only from low-risk countries and places product it produced itself rather than trading someone else's.

Three entities in one group, three different dates and three different obligation sets — because each one is judged alone.

What to check now

• Confirm which entity in your group is the one actually placing the product on the EU market, or trading it — that is the entity whose own figures matter, not the parent's.
• Pull that entity's own balance sheet total, net turnover and average headcount for the relevant financial year, and test it against the table above without adding any other group company's numbers.
• Do not rely on a group-wide SME declaration produced for state aid, public procurement or another EU scheme — those use the consolidated test the EUDR FAQ says does not apply here.
• If the entity's size puts it in the micro or small band, check separately whether its products were ever within EU Timber Regulation scope, since that removes the later date regardless of size.

Run the free checker to get the entity-level answer for your business, rather than estimating from the group's consolidated accounts.

FAQ

Does my subsidiary's size depend on its parent company's turnover? No. The Commission's EUDR FAQ states that size thresholds are examined per legal entity and that consolidation at group level does not take place. Your subsidiary is tested on its own balance sheet, turnover and headcount.

Why does this contradict what I know about SME status elsewhere in EU law? Because other EU schemes — state aid, most grant programmes, and the general SME Recommendation 2003/361/EC — use a linked-and-partner-enterprise test that aggregates group figures. The Commission's EUDR guidance says that Recommendation does not apply to the EUDR, and uses the plain Directive 2013/34/EU entity-level test instead.

Does this mean a large multinational could structure itself into lots of "small" subsidiaries to avoid EUDR obligations? No. Each entity still has to be a genuine separate legal entity carrying out its own placing-on-the-market or trading activity, with its own accounts. The simplification exists because the Commission chose entity-level testing for administrative simplicity, not as a loophole, and each entity still owes the full set of obligations for its own band — size only affects timing and which simplifications apply, not whether due diligence is required at all.

Which thresholds apply — the original Directive 2013/34/EU figures or the uprated ones? The uprated figures from Delegated Directive (EU) 2023/2775, which apply for financial years beginning on or after 1 January 2024: micro up to €900,000 turnover and €450,000 balance sheet; small up to €10m turnover and €5m balance sheet; medium up to €50m turnover and €25m balance sheet.

Does my group still need to coordinate anything across entities? Yes, operationally. Each entity needs its own Information System registration and its own due diligence records, and a due diligence statement reference number can pass between group entities exactly as it would between unrelated businesses. What does not carry across is the size test itself.

If my subsidiary is small, does it automatically get the 30 June 2027 date? Only if its products were never within the scope of the EU Timber Regulation. A small subsidiary handling timber, paper or wood products that were already caught by that regime is still bound by 30 December 2026, regardless of its entity-level size.

Does CSRD use the same per-entity test? No. CSRD reporting obligations are generally assessed on a consolidated group basis, which is the opposite approach from the EUDR's entity-level test. A group can be required to report under CSRD while one of its subsidiaries is separately classified as small under EUDR.

Where is this written down, since it isn't in the regulation text itself? It comes from the Commission's Frequently Asked Questions on EUDR implementation, which the Commission itself describes as authoritative alongside its guidance document in case of doubt about interpretation. It is guidance rather than the operative legal text of Regulation (EU) 2023/1115 itself, so if your classification is finely balanced, keep a dated copy of the FAQ version you relied on.