Liability of the managing director of a GmbH for tax debts due to a lack of organization and supervision
by Elena Weismann in News from tax law
The director of the GmbH as its legal representative is responsible for the tax liability of the GmbH. This liability of fault and responsibility can fall upon the managing director in the following cases: when there is a late filing of the declaration, the intentional non-payment of taxes, or due to a grossly negligent breach of the imposed obligations.
In one case of the fiscal court in Hamburg the accounting of a GmbH was done by the owner’s father and the tax returns were surrendered without the necessary control. As a result of incorrect invoices issued by the father to the GmbH the company owed VAT to the state.
The Managing Director had to pay the incurred debts and was accused of organizational and monitoring negligence. The court sentenced the Director to take notice of the accounting mistakes made by his father because the VAT returns discussed amounted to 42% of the total VAT returns of the company.