Engaging administrator sole liability for tax obligations

In a company in Romania, administrators perform key duties to ensure that the economic activity in Romania of the company in Romania operates efficiently and legally, bearing significant responsibility for managing the company in Romania. According to the provisions of the Companies Law No. 31/1990, administrators are liable for fulfilling all obligations that fall under their responsibility. This article analyzes the administrator sole liability in Romania, specifically their liability for the company’s debts, and the new emergency ordinance from the Romanian Government regarding tax amnesty in Romania for individuals and legal entities which did not execute the tax obligations in Romania. The Romanian law firm Pavel, Mărgărit and Associates recommends consulting a commercial lawyer in Romania or tax lawyer in Romania who can provide advice on the responsibility of an administrator in Romania, the engagement of administrator liability in Romania, and the sole liability in Romania.

Administrator liability for not executing tax obligations in Romania

According to the provisions of the Tax Procedure Code in Romania, administrators can have their sole liability in Romania engaged for unpaid tax debts of an insolvent debtor. Thus, along with the debtor, the administrators of the company who, in bad faith, caused the non-declaration and/or non-payment of tax obligations in Romania by the due date, are held jointly liable. To hold the administrator’s sole liability in Romania when there are tax debts, several cumulative conditions stipulated by the Tax Procedure Code in Romania must be met: the administrator’s bad faith actions, the company’s state of insolvency, and the non-payment of tax obligations in Romania by the due date. Therefore, the tax authority can determine that a commercial company is insolvent if it has tax debts. A commercial lawyer in Romania can offer advice on the provisions in the Tax Procedure Code in Romania regarding the administrator liability in Romania for the company’s debts and, implicitly, the administrator’s sole liability in Romania, as well as the rules in the Companies Law no. 31/1990.

Tax amnesty in Romania

In the latest government hearing, a new draft bill from the Ministry of Finance regarding tax amnesty in Romania for the tax debts of individuals and legal entities which carry out economic activity in Romania was approved. Individuals who did not perform their tax obligations in Romania will be able to benefit from the cancellation of half of their outstanding tax obligations in Romania as of August 31, 2024, as well as the cancellation of penalties for these obligations. Legal entities will be able to benefit from the cancellation of penalties on tax obligations in Romania outstanding as of August 31, 2024. Individuals with arrears to the state budget exceeding 5,000 lei who pay 75% of these by the date of the cancellation request (no later than November 25, 2024) can benefit from the cancellation of 25% of the main budgetary obligations outstanding as of August 31, 2024, and the cancellation of penalties. A tax lawyer in Romania or a corporate lawyer in Romania can provide legal advice regarding the new legislative changes related to tax amnesty in Romania for the tax debts of individuals and legal entities.

The Romanian law firm Pavel, Mărgărit and Associates offers high-quality legal consultancy in the fields of commercial and tax law for companies that carry out economic activity in Romania. A corporate lawyer in Romania or tax lawyer in Romania from our team can offer advice regarding the engagement of administrator liability in Romania in correlation with the implementation of new legislative changes concerning tax amnesty in Romania. We invite you to confidently seek our legal services by completing the contact form available at https://www.avocatpavel.com/contact-us/.

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“Our lawyers have vast experience in commercial law, especially regarding engaging the responsibility of an administrator in Romania for company debts, and the new tax amnesty draft bill is of significant importance for company administrators,” said Dr. Radu Pavel, Coordinating Lawyer of the Romanian Law Firm Pavel, Mărgărit and Associates.

In conclusion, poor management of a company concerning the fulfillment of tax obligations in Romania can be a reason for holding the responsibility of an administrator in Romania. For a correct interpretation of the rules from the Companies Law and the Tax Procedure Code in Romania, the Romanian law firm Pavel, Mărgărit and Associates recommends contacting a corporate lawyer in Romania who can advise on the measures that must be followed to avoid holding a company administrator liable.