Ne
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Managing directors of a GmbH face significant personal liability risks regarding the company's tax debts under Sections 34 and 69 of the Fiscal Code (AO) in conjunction with Section 35 of the Limited Liability Companies Act (GmbHG).

I. Principle of Managing Director Liability

Managing directors are personally liable if claims arising from the tax debtor-creditor relationship (Section 37 of the Fiscal Code – AO) are not assessed or satisfied—or not done so on time—due to an intentional or grossly negligent breach of the tax obligations imposed upon them; this liability also extends to late-payment surcharges. The governing provisions are Section 69 AO in conjunction with Section 34 (1) AO and Section 35 (1) GmbHG. Key obligations include, in particular, the timely and complete filing of tax returns and the payment of taxes using the funds managed by the director.

II. Typical Liability Scenarios

The most common instance of liability concerns wage tax. The managing director is responsible for ensuring the timely declaration and remittance of wage tax; failure to remit the tax generally constitutes a grossly negligent breach of duty.

The same applies to VAT: incorrect or missing preliminary VAT returns and failure to remit the tax result in liability. This also applies to estimated VAT amounts.

Arrears in corporate income tax are also frequently the subject of liability claims.

III. Fault, Causality, and Compensation

The managing director's liability is compensatory in nature; a causal link between the breach of duty and the tax loss is required. A managing director acts with gross negligence, in particular, in cases of failure to file or late filing of tax returns, failure to declare or remit wage tax and VAT, and in the event of an evident liquidity crisis without taking the action required under tax law.

IV. Liquidity Crisis

In cases of insufficient liquidity, the managing director is liable only to the extent that they failed to use available funds on a pro-rata basis to satisfy the tax authorities and other creditors (the principle of the "pro-rata repayment ratio").

V. Scope of Liability

In addition to the tax itself, liability extends to ancillary tax payments (late payment surcharges, interest, and late filing penalties) insofar as they were caused by the breach of duty.

VI. Relationship to Insolvency Law

During the period leading up to insolvency, the obligation to pay taxes conflicts with insolvency law obligations regarding the equal treatment of creditors.

When exercising its discretion (pursuant to Section 191 of the Fiscal Code/AO), the tax authority must consider the extent to which holding the managing director liable—as opposed to the company primarily liable—is appropriate; errors in the exercise of discretion can render the liability notice unlawful.

For questions, please contact us at: kanzlei@wild.legal