According to article 50 of the Tax Procedure Code (Law 4174/2013), the directors of a legal entity are personally and jointly liable for the payment of taxes of the legal entity. More specifically, the following persons are personally and jointly liable along with the legal entity: executive presidents, managers, general managers, administrators, managing directors, chief executives to the management and liquidators of the legal entities, as well as the persons actually administrating or managing the legal entity. Article 50 stipulated that such persons (namely, the managing persons) would be liable for any tax owed by the legal entity, irrespective of the time of tax assessment and irrespective of their responsibility for non-payment.
On 12 December 2019, article 50 was amended by virtue of Law 4646/2019. As a result, significant changes took place in relation to directors’ tax liability, which is now limited to the debts of the legal entity that became overdue during their tenure and were not payed due to their fault.
In accordance with the new provision, both the abovementioned conditions should be met for the directors’ tax liability to be established. Furthermore, directors have the possibility to fall under the beneficial provisions of Law 4646/19 for taxes imposed prior to the enforcement of the new law on the condition that they file a request before the competent tax authority by 11.03.2020.
For more information on directors’ liability issues, please contact us.