Netherlands: Supreme Court Questions EU Proportionality Principle in Sanction for Failure to Report Payment Difficulties

• The Dutch Supreme Court has referred questions to the Court of Justice of the European Union (CJEU) regarding the difficult burden of proof faced by a director in relation to VAT debts.
• The case involves a director who was held liable for unpaid taxes by the tax authorities, despite having stepped down as director and transferring the company to a new owner.
• The issue at hand is whether the burden of proof placed on the director is in line with the principle of proportionality under EU law.
• The questions referred to the CJEU ask whether EU law prohibits a regulation that makes it extremely difficult for a director to avoid liability for tax debts if the company fails to report payment difficulties.
• The CJEU will also consider whether the director’s good faith and diligent actions are relevant in determining liability.
• The case will be put on hold until the CJEU provides its ruling.
• The Dutch Supreme Court has confirmed that the heavy sanctions imposed on directors for unpaid taxes are intended and provided for by the legislature.

Source: taxlive.nl

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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