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TAX & BUSINESS
Liability of a former managing director
A former managing director can also be liable for tax debts even if they are formally assessed after his departure from the representative function.
If, during his period of office, he makes incorrect or incomplete statements and thereby causes a later tax arrears claim, he cannot excuse himself with the argument that the formal assessment was only made after his resignation. The decisive factor is not the timing of the formal assessment or the due date, but whether the managing director breached tax obligations during his period of office.
According to the Administrative Court (Verwaltungsgerichtshof, VwGH), these obligations include not only the timely payment of taxes but also disclosure, truthfulness, declaration and accounting obligations. If such obligations are culpably breached and this later leads to a loss of tax revenue, liability can also arise even if the specific tax assessment is only made after the managing director has left the representative function.
A decision of the VwGH makes clear that a managing director's responsibility does not automatically end with his departure from office. The crucial point is whether he violated tax obligations during his active period of office. If such a breach of duty exists and the tax becomes unrecoverable from the company, the tax liability of the managing director can still be enforceable years after his departure.
According to the Administrative Court (Verwaltungsgerichtshof, VwGH), these obligations include not only the timely payment of taxes but also disclosure, truthfulness, declaration and accounting obligations. If such obligations are culpably breached and this later leads to a loss of tax revenue, liability can also arise even if the specific tax assessment is only made after the managing director has left the representative function.
A decision of the VwGH makes clear that a managing director's responsibility does not automatically end with his departure from office. The crucial point is whether he violated tax obligations during his active period of office. If such a breach of duty exists and the tax becomes unrecoverable from the company, the tax liability of the managing director can still be enforceable years after his departure.