EU Law and Practice Contributed by: Porter Elliott, Catherine Gordley and Niharika Parshurampuria, Van Bael & Bellis
achieves more than two thirds of its aggregate EU-wide turnover in one and the same member state. 2.6 Calculations of Jurisdictional Thresholds Article 5 of the EUMR outlines how turnover should be calculated for the purposes of the EU The term “aggregate turnover” refers to revenue derived from the sale of products and/or ser - vices by the undertakings concerned in the most recent financial year for which audited accounts are available. Turnover for each undertaking concerned nor - mally includes all group-wide turnover, exclud - ing intra-group turnover. If only part of an under - taking is being acquired (eg, a subsidiary or a division), only the turnover relating to that part counts as the target’s turnover, and the seller’s turnover is ignored. jurisdictional thresholds. Calculation of Turnover Revenues are calculated only on the basis of net turnover (ie, after the deduction of sales rebates, value added tax and any other taxes directly related to turnover). The calculation of aggregate turnover generally excludes any extraordinary revenues that do not correspond to the ordinary activities of the undertakings concerned, such as income from the sale of businesses or assets. Geographical Allocation of Turnover Turnover is generally allocated based on where the customer is located, as this is normally where competition with alternative suppliers takes place. The Commission’s Consolidated Jurisdictional Notice provides additional detail on where turnover should be allocated for spe - cific types of sales, including internet sales.
Revenues registered in a foreign currency must be converted to euros using the average exchange rate for the 12-month period in ques - tion, as published by the European Central Bank. Financial Institutions The EUMR and the Consolidated Jurisdictional Notice provide specific rules that apply to the calculation and allocation of turnover for credit and other financial institutions. 2.7 Businesses/Corporate Entities Relevant for the Calculation of Jurisdictional Thresholds Undertakings Concerned The EUMR jurisdictional thresholds refer to the aggregate turnover of the “undertakings concerned”. In the case of mergers, the merg - ing parties are both undertakings concerned. In the case of acquisitions, the undertakings concerned are the acquirer(s) and the target(s) but not the seller. If the transaction involves the acquisition of joint control over a pre-existing undertaking, then that undertaking is also an undertaking concerned. Control Group of the Undertakings Concerned EU turnover thresholds concern the aggregate turnover of all entities belonging to the control group of the undertaking concerned. For turn - over purposes, the concept of control group includes: • the undertaking concerned; • any undertakings directly or indirectly con - trolled by the undertaking concerned; • any undertakings that directly or indirectly control the undertaking concerned (ie, its par - ent companies); and
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