Liability is a type of liability arising from a tax relationship that extends to a third party’s legal representative, chief executive officer or asset manager (the addressee of the liability decision) to pay the company’s tax debt. It is an obligation on the part of the corporation, ie the said one presupposes the validity of the tax debt of the company (Supreme Administrative Court decision no. 3-3-1-75-09).

Liability proceedings are a sub-category of debt recovery and are not tax assessments. The liability procedure involves an analysis of the circumstances underlying the third party’s liability, which may result in the issuance of a liability decision to the obligated new subject or the termination of the liability procedure due to lack of grounds.

It is clear from §§ 96 (1), 40 (1) and 8 (1) of the Taxation Act that the liability of a member of the management board in the recovery of his tax debt is as follows:

• the member of the Management Board has willfully or through gross negligence violated his or her duties
• breach of the obligation to ensure the timely and full fulfillment of the financial and non-financial obligations under the Taxation Act and tax laws
• the default has resulted in a tax debt