One of the problems that the administrators/directors or the management bodies of a Romanian company may face is engaging joint liability for the outstanding payment obligations of the debtor company declared insolvent by tax inspection bodies which are part of National Authority of Fiscal Administration (ANAF).
The law firm Pavel, Mărgărit and Associates recommends a lawyer specialized in tax law and tax disputes and litigation, may proceed to take all the steps in order to file an appeal against the tax decision of engaging joint liability.
Conditions for engaging the joint liability of the administrator / director/ management bodies of a Romanian company
In order to establish the joint liability of the administrator /management bodies of a Romanian company, the tax authorities issue a decision stating the factual and legal reasons for which the liability of the person concerned is engaged, as provided in disp. art. 25 Fiscal Procedure Code.
According to art. 25 paragraph (2) of the Fiscal Procedure Code, for the outstanding payment obligations of the debtor declared insolvent, may be jointly liable with him:
- The natural or legal persons who, prior to the date of the declaration of insolvency, in bad faith, acquired in any way assets from the debtors who caused their insolvency;
- The directors, associates, shareholders and any other persons who have caused the insolvency of the debtor legal person by alienating or concealing, in bad faith, in any form, the debtor’s assets;
- The administrators who, during the exercise of their mandate, in bad faith, have not fulfilled their legal obligation to request from the competent court opening the insolvency proceedings, for the tax obligations related to that period and remained unpaid at the date of declaring insolvency;
- The administrators or any other persons who, in bad faith, have determined the non-declaration and / or non-payment of the fiscal obligations at maturity;
- The administrators or any other persons who, in bad faith, have determined the refund or reimbursement of money from the general consolidated budget without being due to the debtor.
Therefore, the bad faith of the administrators /directors/ other persons is a sine qua non condition for engaging joint and liability. In order to retain bad faith, conclusive evidence provided by the tax authorities is required.
In addition to these special conditions provided by the Fiscal Procedure Code, the institution of civil liability provided in art. 1357 Civil Code, will be also considered, the fulfillment of the conditions provided in this article being necessary: the illegal deed, the damage, the causal connection and the guilt.
The bad faith-The insolvency of the debtor
In case of liability regulated by art. 25 paragraph (2) the guilt of the administrator must be proved by the tax authorities, the simple presumption that the insolvency of the company occurred as a result of the administrator’s behavior, without specifying concrete actions / inactions cannot be an evidence of the bad faith.
In most cases, the tax authority establishes the fulfillment of the legal requirements based on assumptions, without concretely proving bad faith.
The law firm Pavel, Mărgărit and Associates has assisted and represented numerous clients in fiscal and tax disputes, drafting appeals against the decisions issued by ANAF for engaging joint, resulting in a favorable outcome for them.
These decisions may be challenged with an action for annulment against the decision to enter into joint and several liability by a lawyer specializing in tax law and tax disputes and litigation.
The settlement of the challenges
The challenges are solved by the specialized structures within the Ministry of Public Finance which pronounce by decision. The decision may be admissible, in whole or in part, or rejected.
Although a rejection solution seems to be irreparable, the legislation still offers a chance in order for the person who received it to appeal it in front of the Court. In case of a possible admission of the action, the issuing tax authority may rule the annulling the administrative document, the appellant being reinstated in the previous situation.
The administrative challenge offers the right to the dissatisfied taxpayer to challenge the tax documents, creating the obligation on the tax authorities to analyze the validity and legality of the taken measures. At the same time, if the taxpayer is dissatisfied with the settlement of the challenge, he can go to the competent administrative court to appeal the decision of ANAF.
The law firm Pavel, Mărgărit and Associates recommends a lawyer specialized in tax law and tax disputes from Romania, who can analyze the procedural aspects and to bring factual and legal arguments for the removal of the discretionary decisions issued by the fiscal control bodies.
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