Luxembourg Commission de Surveillance du Secteur Financier clarifies that CSRD sustainability assurance fees are excluded from the 70% non-audit services fee cap for public-interest entities

The Luxembourg Commission de Surveillance du Secteur Financier (CSSF) issued guidance to approved statutory auditors, approved audit firms and audit committees of public-interest entities (PIEs) on how to apply the EU “Fee Cap” for non-audit services when auditors also perform assurance on sustainability reporting, pending Luxembourg’s adoption of national CSRD implementing provisions. Under Article 4(2) of Regulation (EU) No 537/2014, where a statutory auditor or audit firm provides non-audit services for three or more consecutive financial years to an audited PIE and, where applicable, its group, total fees for such services are capped at 70% of the average statutory audit fees for the last three consecutive financial years. The CSSF notes that Article 4 of Directive (EU) 2022/2464 (CSRD) is directly applicable as an amendment to Regulation (EU) No 537/2014 for financial years starting on or after 1 January 2024, and excludes assurance of sustainability information from the Fee Cap calculation. On that basis, the assurance engagement and assurance report on sustainability reporting under CSRD are treated as outside the scope of non-audit services for the Fee Cap, while other sustainability-related consultancy, assistance or assurance services remain non-audit services and continue to count towards the cap where permitted under independence rules.