“I am an SME, so I have 6 more months to comply.”

Aug 28
This is another very common misunderstanding we keep seeing: generalizing and assuming that all SMEs don’t need to comply with the EUDR until June 30, 2026.

In fact, SME means micro, small, and medium enterprises — but the 6-month transitional period (Article 38) only applies to micro and small companies.

"Article 38.3.
Except as regards the products covered in the Annex to Regulation (EU) No 995/2010, for operators that by31 December 2020 were established as micro-undertakings or small undertakings pursuant to Article 3(1) or (2) of Directive 2013/34/EU, respectively, the Articles referred to in paragraph 2 of this Article shall apply from 30 June 2025."

So, not all SMEs benefit from the extra time.

On top of that, Article 38 adds two key conditions to qualify for the 6-month extension:

  • The company must not only be micro or small, but must have been established as such by 31 December 2020;
  • The 6-month extension does not apply to products covered by the EUTR.


In short, three conditions must be met to benefit from the extra 6 months:

  1. Be a micro or small company;
  2. Have been so before 31 December 2020;
  3. For wood-related products, only if the product is outside the scope of the EUTR.

Does this make sense?

At first, it may seem strange that December 31, 2020, is the cut-off date to determine whether a company qualifies as micro or small in order to benefit from the extra 6 months. But it actually makes sense. As you may have noticed, this is the same cut-off date used to assess deforestation under the EUDR.

Why this date? Because it was around this time that the EUDR was first proposed as a regulatory initiative within the European institutions. Imagine if the proposal had been announced in December 2020, knowing that the Regulation itself would only enter into force years later (June 2023). Companies could have rushed to deforest land before the law applied so that it would not be considered “deforested.” Similarly, they could have set up a brand-new legal entity classified as a micro enterprise in order to benefit from the additional 6 months.

By fixing the cut-off date at 2020, the EU ensured that no company could either deforest land or create new entities simply to circumvent the Regulation or gain extra time to comply.

How is company size calculated?

The EUDR defines SMEs as “micro, small and medium-sized undertakings as defined in Article 3 of Directive 2013/34/EU of the European Parliament and of the Council.” Article 3 of this Directive sets out the thresholds we need to consider:

Micro undertakings: those which, on their balance sheet dates, do not exceed the limits of at least two of the following three criteria:

(a) balance sheet total: EUR 450,000
(b) net turnover: EUR 900,000
(c) average number of employees during the financial year: 10

Small undertakings: those which, on their balance sheet dates, do not exceed the limits of at least two of the following three criteria:

(a) balance sheet total: EUR 5,000,000
(b) net turnover: EUR 10,000,000
(c) average number of employees during the financial year: 50

👉 Remember: size is assessed for each legal entity, not the company group as a whole.

What about EUTR products?

As you’ve seen, Article 38(3) begins with the words: “Except as regards the products covered in the Annex to Regulation (EU) No 995/2010.” This means that the additional 6 months do not apply to products previously covered by the EUTR.
The reasoning is that the EUTR and the EUDR are very similar (even though the EUDR goes further), so companies already subject to the EUTR are not considered to need extra time to adapt, since they have been applying a comparable regulation for years.

For example, imagine I am a company selling wood-based products, and I market two types:

  • Printed books
  • Pulp and paper

Printed books (HS code 49) were not covered under the EUTR, while pulp and paper from chapters 47 and 48 were. This means that, if I meet the other conditions (being a micro or small company, established as such before December 31, 2020), I could benefit from the additional 6 months for my printed books — but not for my pulp and paper.

We’ll go through practical examples of all this in our courses so you can understand it clearly!