Netherlands: Liability of Directors for VAT Debts – Hoge Raad Seeks EU Clarification

• The Netherlands has submitted a case to the European Court of Justice to determine if the legal regulation of personal liability for tax debts is in line with EU law.
• Under Dutch law, the director of a company is not normally responsible for the debts of the company, but there are exceptions for certain tax debts, such as payroll and turnover tax.
• If a company cannot pay taxes on time, it must report this to the tax authorities within 14 days. Failure to do so can result in the director being held personally responsible for the tax debts.
• The Dutch Supreme Court has asked the European Court of Justice to determine if the heavy penalty for directors who fail to report payment difficulties on time is proportionate to the purpose of the reporting obligation.
• The Supreme Court also questions whether the regulation is in line with the EU principle of proportionality with regard to turnover tax debts.
• The Supreme Court will make a final decision after the European Court of Justice has answered the questions.

Source: nextens.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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