Changes to Tax and Social Security Procedure Code (EN)
Liability in case of a hidden complicity
The changes to the Code introduced liability of each person, who in the hypothesis of a hidden complicity conducts commercial activity through an insolvent debtor.
Persons, acting in the hypothesis of hidden complicity shall be deemed jointly liable with the insolvent legal entity for the outstanding taxes and social security contributions as they would have been established for the insolvent legal entity.
Liability in case of a hidden distribution of profits
Shareholders who have received hidden profit distribution are liable for the outstanding taxes and social security contributions of the legal entity for the period during which they were in such capacity.
The liability is limited up to the amount of the revenue received in the form of a hidden distribution of profits.
If the hidden distribution of profits is declared, then those persons shall not be held liable for the tax and social security contributions.
Delchev & Partners
This Tax Alert has been prepared by DELCHEV & PARTNERS for information purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Readers should not act upon this without seeking professional counsel.