Corporate Taxation

Bankruptcy due to enforcement of tax debts

The debt enforcement law is being amended so that, as of 1 January 2005, bankruptcy proceedings will also apply to taxes and levies of legal entities. Under the current law, only seizure proceedings were possible. In practice, this has led to companies paying taxes and levies as a last priority, in situations of financial distress. To avoid bankruptcy, a company will now also need to take taxes and levies into account when managing its liquidity.