Tax deferral: managing directors are ultimately liable for company debts
Liability for tax debts should be limited to gross negligence for a limited time, says Wirtschaftsprüfer.
Viennese Neudorf company slipped into bankruptcy.
When the deferral of taxes and duties for companies ends in mid-January, the pressure increases on the companies to plan the period in which they have to settle their arrears – not that easy when the rules for sales compensation, deferrals and other aids are often short-term change, says the auditor Peter Wundsam. “It can very easily happen that an entrepreneur becomes personally liable even though it is the company's debts.”
That also applies to other debts, said Wundsam, because the deadline for filing bankruptcy due to over-indebtedness also ends on March 31. “For this reason, we expect a significant increase in corporate insolvencies by the summer.” For the company, it was difficult to plan future development, “because different regulations on sales compensation, company closures, types of deferrals and support measures have been coming in all the time”.
“There is the provision in Paragraph 9 of the BAO (Federal Tax Code, note) that the managing director is liable for debts of the GmbH if he has culpably contributed to the company not being able to meet its tax obligations.” This concept of guilt is very broad, “even a slight negligence is enough here,” said Wundsam in an interview with the APA. If, for example, the managing director states in a deferral request to the tax office that he will be able to pay the taxes at a later point in time, but that this schedule is poorly calculated, “then this miscalculation already leads to personal liability for these tax debts”, warns Wundsam and suggests that Limit liability to gross negligence.
“In my opinion, a regulation could be sufficient here so that prosecution by the tax authorities should only take place in the event of gross negligence.” Wundsam suggests that the standard of care could be “turned back a little for a limited period of time” – “without opening up a license for tax evasion”.
According to expert estimates, insolvencies are likely to increase by 15 percent this year compared to 2019, “therefore one should also think about whether one could not make the establishment of new companies a little easier. There are efforts to establish a 'GmbH light' in Austria, and one should really take a big step because, in addition to the legal hurdles, there are still a number of social security law and commercial law hurdles that a young entrepreneur has to overcome here. ” A new form of company should be made possible “where there is no automatic personal liability”.
Peter Wundsam is Managing Partner of the international auditing and tax consulting company Mazars Austria, which employs 180 people in Vienna.