|
Board members’ tax liability Board members’ responsibilites involve the risk that they will be held |
|
Art. 107-109 and 116 of the Tax Code set out rules which determine when
board members can be held liable personally to meet the company’s tax
obligations. These provisions provide that board members may be charged
with settling the company’s tax arrears, penalty interest, enforcement
costs, etc.
The tax authority can enforce these liabilities either jointly from
each responsible party (including the company and individual board
members) or severally from selected parties. However, if the taxpayer
(i.e. the company) or any of the board members settles the amount due,
that relieves all other parties from any obligation to pay a share of
the liability.
The following conditions, if they are all fulfilled, constitute grounds
to find board members liable for a company’s tax obligations:
a) the existence of arrears relating to tax liabilities which arose
when the defendant was serving as a board member. If a tax obligation
arises during a board member’s term of office, but the resulting due
date for payment falls after the end of that term of office, the board
member will not be liable.
|
b) the total or partial ineffectiveness of enforcement proceedings against the company,
c) the failure of a board member to reveal that an application to
declare bankruptcy has been properly submitted or that arbitration
proceedings have been initiated or the failure to demonstrate that the
company’s failure to submit such an application or to initiate such
proceedings is not his fault,
d) concealment of company assets which might satisfy a significant portion of the company’s tax arrears.
An order holding a board member liable for tax arrears can be issued
within five years of the end of the calendar year in which the arrears
arose.
tresc |
|
