The Order approves of the Instructions for the application of the joint liability principle, regulated by Arts.27 and 28 of Government Ordinance No 92 / 2003, regarding the Tax Procedure Code (hereinafter the “Instructions”).
Under the Tax Procedure Code, the tax authorities having expertise in enforcing any security over principal debtor’s assets shall be entitled to request a co-debtor to duly fulfil any payment obligation to the budgets administered by the Ministry of Public Finance through the National Tax Administration Agency and its subordinated entities.
According to Art.27 of the Tax Procedure Code, the following persons shall be jointly liable alongside the principal debtor:
- members of associations without legal personality, including members of family enterprises, for outstanding tax debts, under the conditions provided by Art.20 of the Tax Procedure Code, and their legal representatives that have, in bad faith, failed to declare and / or to pay taxes when due;
- garnishees, in the situations specified in Art.149, paragraphs (9), (10), (12) and (15), of the Tax Procedure Code, within the limits of concealed assets value;
- the legal representative of the taxpayer that declares, in bad faith, that such taxpayer does not hold any other liquidities, a case regulated by Art.149 (12) (a) of the Tax Procedure Code.
With a view to establishing the natural and / or legal entities falling within the scope of Art.27 of the Tax Procedure Code, the tax authorities having expertise in enforcing any security over principal debtor’s assets shall perform activities consisting in identifying, appraising and handling all the relevant documents underlying the application of the joint liability principle.
The Order also establishes:
- methods for the performance of the abovementioned operations;
- elements which should be taken into consideration by the competent tax authority when establishing co-debtor’s joint liability;
- ways for the collection of information about the person that may be held jointly liable;
- the procedure for hearing the person that may be held jointly liable and for inquiring into the documents and writs submitted by such person.
Likewise, the tax authority having expertise in enforcing any security over principal debtor’s assets shall have, inter alia, the following prerogatives:
- to identify the individuals who hold or held the position of administrator, shareholder or any other position within the legal entity which is a debtor, as well as any other persons that held, in any way whatsoever, movable or immovable assets owned by the debtor;
- to find out whether the abovementioned persons may be held liable for having disposed of or concealed assets in bad faith, both by relocating them so that they could no longer be subjected to enforcement and by not including them in the accounting records of the insolvent debtor;
- to determine whether there is a causality relationship between the state of insolvency and the concealment of assets.
In the case of an insolvent debtor, the joint liability principle may be applied solely with the official receiver’s accord.
The tax payment obligations evidenced by the decision on the application of the joint liability principle shall be fulfilled contingent upon the communication date of the decision. As the Tax Procedure Code provides, such obligations shall be performed as follows:
- if the decision is communicated between the 1st and the 15th day of a month, payment shall be performed by the 5th day of the following month;
- if the decision is communicated between the 16th and 31st day of a month, payment shall be performed by the 20th day of the following month.
The aforementioned decision may be challenged within a 30-day term of its communication date; afterwards, no objection may be raised thereto. Any such objection may be handled by the relevant tax authority, namely the Regional Public Finance Department or the Bucharest General Public Finance Department, being a hierarchically superior structure that is competent in administering the principal debtor, as well as by the Large Taxpayers’ Administration Department.
The proceedings initiated for the application of the joint liability principle shall cease to be active once:
- the tax obligations in relation to which the joint liability principle started being applied have been fulfilled;
- the de decision on the application of the joint liability principle has been rescinded by administrative way;
- the released administrative acts have been cancelled by a competent court of law.
