Journal of Tax Research

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Sometimes in spite of final tax liability of private business companies their director or directors refrain from settling the company’s tax liability and as a result the National Tax Administration seeks to settle those liabilities for them by posting an auction ad, selling the confiscated tangible and intangible assets owned by the company or freezing its bank accounts. The refrainment could be the outcome of legal violation of the company director or directors which could damage the business company too. The damage refers both to non-material outcomes for the company in terms of negative fame and decline of business reputation as well as material loss such as excess executive costs. The confiscation and auction of the company’s assets could cause delay or slow-down of its business operations and therefore, the company might suffer from further losses. Evidently, the above-mentioned losses should not remain uncompensated. The tax laws do not deal with civil liability of the managers in such matters but such liability could be addressed based on jurisprudential-legal basis and reference to the notion of civil liability. The present study points out different presumptions about causing damage to business companies so as to address the civil liability of their directors and how and to what extent they are liable. The liability can be justified based on causation rule and some legal works on liability.

Keywords: Private Business Company, Lack of Tax Payment, Refrainment of Managers, Civil Liability, Loss Compensation

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