Consolidated accounts thresholds in Luxembourg: relief

Who must prepare consolidated accounts in Luxembourg?

Consolidated accounts in Luxembourg are required of any company that controls one or more subsidiaries, alone or jointly, whatever the size of its own balance sheet: it must prepare them, have them audited by a réviseur d'entreprises agréé and publish them, together with a consolidated management report. The duty covers capital companies, meaning the public limited company, the European company, the corporate partnership limited by shares, the simplified joint-stock company and the private limited company, and in certain cases the general partnership and the common limited partnership.

The trigger is control, never the parent company's own turnover. Three situations suffice: holding a majority of the voting rights of the shareholders of an undertaking; having the right to appoint or remove a majority of the members of its administrative, management or supervisory body while being a shareholder of it; or controlling alone a majority of the voting rights under an agreement with other shareholders. A holding company with a modest balance sheet can therefore sit at the head of a group that must consolidate.

The scope ignores borders. Article 1711-1 of the amended law of 10 August 1915 on commercial companies requires the parent and all its subsidiary undertakings to be consolidated, without prejudice to the exclusions in article 1711-8, wherever those subsidiaries have their registered office. A Singaporean or Brazilian subsidiary falls within the scope exactly as a Luxembourg one does.

One confusion surfaces in almost every group file: accounting consolidation is not fiscal unity. The first produces financial statements presenting the group as a single undertaking; the second is a tax regime that aggregates taxable results subject to holding and duration conditions. A group may be subject to one without the other, and the two perimeters rarely coincide.

Which thresholds exempt a group from consolidating?

A group escapes consolidated accounts in Luxembourg where, at the parent company's balance sheet date, the set of companies to be consolidated does not exceed at least two of the three figures in article 1711-4: balance sheet total, net turnover and average number of employees. The three criteria are assessed on the basis of those companies' latest annual accounts.

For financial years starting on or after 1 January 2023, those limits are €25 million of balance sheet total, €50 million of net turnover and 250 employees on annual average. They previously stood at EUR 20,000,000 and EUR 40,000,000, the amounts still carried by the version of the 1915 law consolidated as at 1 November 2023.

That increase comes from the Grand-Ducal Regulation of 25 October 2024, which amended article 1711-4 as well as articles 35 and 47 of the law of 19 December 2002, transposing Commission Delegated Directive (EU) 2023/2775. The Commission des normes comptables describes it as a 25% rise in the balance sheet total and net turnover thresholds, consolidated ones included, with an effect deferred to financial year 2025 by the repetition criterion. Directive 2013/34/EU consolidated as at 28 May 2024 sets the medium-sized group limits, which govern the Luxembourg exemption, at the same levels.

A group close to the limits should therefore not reason on a single year, nor on the parent's figures alone. The table below sets out the amounts in force and the earlier ones. The size of a single entity, which drives the format of its own annual accounts, is assessed separately from the group's: our article on company size thresholds covers that test.

Consolidated basis or simplified method: how are the thresholds counted?

The consolidation exemption thresholds in Luxembourg are assessed on a consolidated basis, meaning on the parent together with all the subsidiaries that would enter the scope, and not on the parent's own accounts. Article 1711-4(2) offers, in exchange, a simplified method based on adding up gross amounts before eliminations.

The choice is not neutral. On a consolidated basis, the eliminations of shares, of reciprocal receivables and payables and of internal results must already have been produced to know the consolidated balance sheet total; in other words, you have to consolidate in order to find out whether you are exempt from consolidating. The simplified method avoids that paradox by adding up the annual accounts, at the price of thresholds 20% higher on two criteria only.

The aggregation perimeter deserves a close reading. According to the Commission des normes comptables, what counts is the parent and each of its direct or indirect subsidiaries under exclusive control, those that would be fully consolidated. Jointly controlled undertakings and those under significant influence stay outside the calculation, as do entities excluded on the basis of article 1711-8. The 20% increase does not apply to the average headcount criterion: that one is added up without adjustment.

Two safeguards frame the exemption. Exceeding or ceasing to exceed the limits only changes the group's status after two consecutive financial years, which cushions the effect of a one-off acquisition. And the exemption falls away if a subsidiary in the group has securities admitted to trading on a regulated market; the Commission des normes comptables specifies that a listed company under joint control, or under mere significant influence, does not trigger that exclusion.

When is an intermediate parent exempt from consolidating?

A Luxembourg parent that is itself the subsidiary of another company is exempt from preparing consolidated accounts where its own parent is governed by the law of a European Union Member State and where the exempted company, together with all its subsidiaries, is included in the consolidated accounts of a larger body of undertakings. This is the sub-group exemption.

That relief is not automatic. The consolidated accounts of the larger body must be filed with the Trade and Companies Register to have discharging effect: a consolidation that exists at group level but is not filed in Luxembourg exempts nothing. The notes to the exempted company's annual accounts must also carry the information on those consolidated accounts, which the doctrine of the Commission des normes comptables sets out.

Minority holders keep a say. Under CNC Q&A 17/014, where the higher parent holds 90% or more, the exemption presupposes that the other shareholders have approved it; below 90%, shareholders holding at least 10% of the capital of a public limited company or of a corporate partnership limited by shares, or 20% in a private limited company, may require consolidated accounts, provided they request this at the latest six months before the end of the financial year. As that Q&A dates from 2017, those percentages deserve a fresh check against the text in force.

In practice this exemption is the worst documented of the three. We regularly see a Luxembourg holding company rely on it for several financial years without anyone having checked that the foreign group's consolidated accounts were actually filed with the Luxembourg register, or that the notes mentioned them. The point usually comes out during a due diligence, at the worst possible moment.

Which subsidiaries may be left outside the consolidation scope?

A subsidiary may be left outside the consolidation scope in Luxembourg in four cases: non-material interest in the light of the true and fair view, severe and lasting restrictions hindering the parent's rights, information obtainable only at disproportionate cost, and shares held with a view to resale. The last three limitations appear in those terms on the Guichet.lu page on consolidated accounts.

These grounds are narrowly construed. Non-material interest is assessed against the objective of article 1712-1(3), that is the true and fair view of the assets, financial position and results of the consolidated whole: it is demonstrated with amounts, not with a general appraisal. The disproportionate cost case, or undue delay, is described as extremely rare in the preparatory works consulted.

Holding shares with a view to resale is the hardest to argue. In its Q&A 25/036 on companies operating in the alternative investment sector, the Commission des normes comptables notes that parent companies only exceptionally plan an exit strategy from the outset: the intention to sell must exist at acquisition and be documented, it cannot be declared after the fact because a sale is being contemplated.

An exclusion is not an exemption, and the confusion is expensive. Leaving a subsidiary out does not remove the duty to consolidate the others; it only narrows the scope, with a justification to be given in the consolidated notes. Properly excluded entities do, however, also drop out of the threshold aggregation, which may in turn take a group below the exemption limit. The methods and the run of a consolidation exercise are set out on our consolidation page.

LuxGAAP or IFRS: which framework for consolidated accounts?

Consolidated accounts in Luxembourg are in principle drawn up under the Luxembourg accounting framework, but two regimes coexist: IFRS as adopted by the European Union are mandatory for companies whose securities are admitted to trading on a regulated market of the Union, and optional for the others.

The obligation on listed companies comes from directly applicable European law. Article 4 of Regulation (EC) No 1606/2002 requires companies governed by the law of a Member State to prepare their consolidated accounts in conformity with the international accounting standards adopted, for each financial year starting on or after 1 January 2005, where their securities are admitted to trading on a regulated market at the balance sheet date.

The option for unlisted companies is Luxembourgish. The law of 10 December 2010 introducing international accounting standards for undertakings inserted into the 1915 law a subsection devoted to consolidated accounts drawn up under international accounting standards, by reference to the 2002 regulation. The Commission des normes comptables considers that financial statements prepared under EU-adopted IFRS satisfy the consolidation obligations of Directive 2013/34/EU and of section XVI of the 1915 law, and that they may be filed with the Trade and Companies Register in place of consolidated accounts prepared under the directive.

The choice is settled before the first consolidated financial year, not during it. Moving to IFRS means a restated opening balance sheet, uniform measurement rules across the group and appreciably heavier notes; staying under the Luxembourg framework means, conversely, aligning the charts of accounts of foreign subsidiaries with the parent's measurement rules. Both exercises are prepared in advance, and neither is run in the month before the general meeting.

What deadlines, what audit and what penalties for consolidated accounts?

Consolidated accounts in Luxembourg must be submitted to the general meeting within six months of the financial year end, then filed with the Trade and Companies Register within one month of their approval: filing therefore takes place no later than seven months after the closing date. Publicity is given by a mention of the filing in the Recueil électronique des sociétés et associations.

The audit is reserved. Consolidated accounts are audited by one or more réviseurs d'entreprises agréés, who also give an opinion on the consistency of the consolidated management report with the consolidated accounts; the content of the audit report is governed by the law of 18 December 2009 on the audit profession. A commissaire aux comptes cannot take that role, even where the parent's own annual accounts fall under its supervision. The consolidated management report itself need not be published if it is kept available to the public at the registered office and supplied free of charge on request.

The penalty for lateness strikes individuals, not the company. Managers or directors who have not submitted the consolidated accounts to the general meeting within six months of the closing date face a fine of EUR 500 to EUR 25,000 under article 1500-2 of the 1915 law, quite apart from the late filing surcharges owed by the entity. The timetable of the annual general meeting therefore also governs the consolidation timetable.

We regularly see the same sequence: a group crosses the thresholds in year N, notices only in year N+1 while preparing the meeting, and then discovers that it lacks a consolidated opening balance sheet, uniform reporting packages, a reconciliation of intercompany balances and a réviseur d'entreprises agréé available in high season. Rebuilding those items after the fact is counted in hours billed at the rates published on our pricing page, whereas reviewing the size criteria at each year end costs next to nothing. It is one of the checks we build into the year-end close as a licensed accountant.

Sources and verification

Written for Financial Services Luxembourg and reviewed before publication by Mickaël LOC, licensed accountant (authorisation 10077274). Control criteria, exemption thresholds, sub-group relief, exclusion grounds, applicable frameworks, deadlines and penalties verified on 17 October 2026 against the official sources below.

The sources consulted are as follows. From the Guichet.lu portal, the page on consolidated accounts of undertakings gives the duty to prepare, have audited and publish consolidated accounts and a consolidated management report as soon as a company controls one or more subsidiaries, alone or jointly, together with the legal forms concerned. The same page lists the three control criteria: a majority of voting rights, the right to appoint or remove a majority of the members of the administrative, management or supervisory body while being a shareholder, and sole control of a majority of voting rights under an agreement with other shareholders.

It also gives the three limitations allowing an undertaking to be excluded from the scope, the loss of the exemption where a subsidiary is listed on a regulated market, the filing with the Trade and Companies Register with publication in the Recueil électronique des sociétés et associations, and the option not to publish the consolidated management report where it is available at the registered office and supplied free on request.

From Legilux, the version of the amended law of 10 August 1915 consolidated as at 1 November 2023 carries article 1711-1, which requires the parent and all its subsidiary undertakings to be consolidated without prejudice to article 1711-8, wherever their registered office is located. It carries article 1711-4, which exempts the parent where the set of companies to be consolidated does not exceed, at the balance sheet date and on the basis of the latest annual accounts, at least two of the three figures, as well as the exemption of a parent that is itself the subsidiary of a parent governed by the law of a Member State.

It carries, finally, the non-material interest test assessed against the objective of article 1712-1(3), and the audit of consolidated accounts by one or more réviseurs d'entreprises agréés giving an opinion on the consistency of the consolidated management report.

From the Commission des normes comptables, Q&A 22/028 on the small group exemption gives the aggregation perimeter limited to the parent and its subsidiaries under exclusive control, the exclusion of jointly controlled undertakings and those under significant influence, the 20% increase under the simplified method, the absence of any increase on the headcount criterion, the repetition criterion over two consecutive financial years and the treatment of a listed company held under joint control.

Q&A 24/034 carries the increase in the size criteria of articles 35 and 47 of the law of 19 December 2002 and of article 1711-4, issued following the Grand-Ducal Regulation of 25 October 2024 transposing Commission Delegated Directive (EU) 2023/2775, with its application to financial years starting on or after 1 January 2023, its effect deferred to financial year 2025 and the expected recategorisation of some large groups as small groups.

Q&A 19/017 gives submission to the meeting within six months, filing within one month of approval, the seven-month ceiling after the closing date and the fine of EUR 500 to EUR 25,000 under article 1500-2. Q&A 17/014 gives the conditions of the sub-group exemption, the 90% threshold, the request by shareholders holding 10% of the capital of a public limited company or of a corporate partnership limited by shares and 20% in a private limited company, made at the latest six months before the end of the financial year, and the filing with the register of the higher consolidated accounts.

Q&A 15/005 allows EU-adopted IFRS financial statements to be filed in place of consolidated accounts prepared under the directive, and Q&A 25/036 interprets article 1711-8(3), point 3°, in the alternative investment sector. From EUR-Lex, finally, Directive 2013/34/EU consolidated as at 28 May 2024 gives the medium-sized group limits, Commission Delegated Directive (EU) 2023/2775 their increase, and Regulation (EC) No 1606/2002, whose article 4 requires adopted international accounting standards for the consolidated accounts of companies listed on a regulated market for financial years starting on or after 1 January 2005.

The amounts in the table are taken from the firm's single source of parameters, whose consolidation entry was corroborated on 1 October 2026 by CNC Q&A 24/034 and by concordant market notes.

Three points could not be verified against an official source at this date, legilux.public.lu and cnc.lu being unreachable from this environment and the texts having been read only through indexed extracts. First, the figures in article 1711-4 after the Grand-Ducal Regulation of 25 October 2024: the coordinated text available still carries the earlier amounts shown in the table, and the thresholds in force rest on the 25% increase described by the Commission des normes comptables and on the medium-sized group limits in the directive.

The gross amounts under the simplified method are expressly derived: they apply the 20% increase documented before the uplift and appear in none of the texts read. Second, the current numbering and wording of the sub-group exemption, together with the 90%, 10% and 20% percentages, read in a 2017 Q&A predating several amendments. Third, the article requiring an audit by a réviseur d'entreprises agréé, read in a 2021 consolidated version.

These points can be checked against the law of 10 August 1915 in force and the text of the Grand-Ducal Regulation of 25 October 2024 published on legilux.public.lu, and against the Q&As on cnc.lu.

This article states the law as it stands at the date of publication and is not personalised legal or accounting advice: whether control exists, whether the thresholds are crossed, whether an exemption is available and which framework applies depend on the group structure, on where the parent is located and on the articles of association. Thresholds, texts and deadlines change, and any decision committing your structure should be verified as at the date you rely on it. Report an error to contact@financialservices.lu: the correction is dated in the article.