The transfer of tax liability to directors underwent a radical change in 2025. The Supreme Court handed down two rulings requiring the tax authorities to prove the specific fault of the director. It is no longer sufficient to have formally held the position.
For years, the Tax Agency almost automatically transferred debts from insolvent companies to their directors. The procedure was simple: prove that someone was a director and that the company committed tax offences. From there, it was up to the director to prove their innocence. A virtually impossible task.
The transfer of liability now requires actual proof of negligence
On 20 May 2025, the Supreme Court handed down judgment 594/2025. The case involved a director from whom the tax authorities claimed more than €355,000 in VAT debts. However, when the tax inspection took place, this person no longer even held the position.
The National Court initially supported the tax authorities. Its argument was that once the status of administrator and the company’s infringements had been proven, it was up to the person concerned to prove that they had acted diligently. The Supreme Court overturned this decision completely.
The ruling establishes that the derivation of tax liability is punitive in nature. Therefore, it must respect the constitutional guarantees of Article 24 of the Constitution. Especially the presumption of innocence. This radically changes the rules of the game.
Now it is up to the Administration to prove the director’s guilt. Generic phrases such as «did not supervise adequately» or «allowed the breach through his passivity» are not enough. The Treasury must specify which obligations the company breached, how the director should have intervened and how his conduct facilitated the infringement.
The causal link must be clear and proven. If there is no connection between the director’s actions and the infringement, liability cannot be attributed. Furthermore, any reasonable doubt must be resolved in favour of the director under the principle of «in dubio pro reo».
Supreme Court rulings protect against automatic derivations
On 17 July 2025, a second ruling (3465/2025) was handed down. This time, the case concerned both section a) and b) of Article 43.1 of the General Tax Law. In other words, tax infringements and cessation of activity without dissolution.
The Supreme Court reinforced its previous doctrine. Even in the event of cessation of activity, strict liability is prohibited. The Administration must prove that the administrator failed to perform their duties. It must prove that they omitted specific procedures within their power and that this omission caused the non-payment.
A key point: the obligation to provide reasons lies entirely with the Administration. The courts cannot subsequently make up for what the Treasury failed to justify from the outset. If the referral agreement lacks sufficient grounds, it must be annulled.
According to data from the Tax Agency, in 2022 there were 31,313 referrals of liability. This represents an increase of 7.7% compared to 2021. When compared to 2018, when there were 16,714 referrals, the increase is even more significant. These figures show that the Treasury is increasingly using this collection tool.
The new rulings oblige the Administration to work harder and provide better grounds. The days of autopilot in tax liability referrals are over.
How to protect yourself against liability referral proceedings
For administrators, these rulings open up new possibilities for defence. Many referrals that are pending or have already been resolved could be appealed. This is especially true for those based on generic statements without concrete evidence.
Prevention remains essential. If you are the administrator of a company in difficulty, document all your decisions. Take minutes of the administrative bodies’ meetings, recording the financial problems and the measures taken. This documentation may prove decisive.
If the company is in the process of being dissolved, take action. Call a meeting to agree on the dissolution or file for voluntary bankruptcy if appropriate. Ceasing activity without taking any action is the most direct route to liability.
If you decide to resign as director, document your reasons and notify the Companies Registry immediately. Your resignation must be registered in order to be effective vis-à-vis third parties such as the tax authorities.
When you receive a liability referral request, analyse it carefully. Read what specific conduct you are accused of. If the agreement uses vague language without specifying what measures you should have taken, you have solid grounds for appeal.
The liability transfer procedure lasts a maximum of six months. It begins with an initial agreement notifying the facts and scope. This is followed by a 15-day period for submitting arguments. Finally, the Administration issues a ruling.
During this process, you can submit arguments and evidence. Do not waste this time. This is your chance to prove that you acted diligently or that you were not responsible for the breaches.
At Confianz, we have been advising family businesses and SMEs in complex situations for over 30 years. We have in-depth knowledge of these procedures and know how to defend you. Our specialised team analyses each case individually. We do not apply generic formulas.
We assess whether the referral agreement complies with the new Supreme Court standards. We identify formal defects, limitations or lack of motivation. And we design a personalised defence strategy to protect your assets.
The 2025 rulings have changed the landscape. Administrators now have better tools to defend themselves against the tax authorities. But you have to know how to use them correctly and at the right time.
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