It cannot be said that a company manager or statutory representative is personally liable for all of the company’s tax debts in every situation. Under Tax Procedure Law (VUK) Article 10, the examination looks at the tax obligations that had to be performed, the failure to perform them, and the link between that failure and the tax being uncollectible from the company’s assets. The general public receivable liability regulated by repeated Article 35 of Law No. 6183 involves different conditions. 1 2
When a payment order is sent in the name of a statutory representative, it must be determined under which law, for which period and on the basis of which authority of representation the debt is being directed at the individual. As a rule, a 15-day period for filing an action applies against a personal payment order relating to a tax receivable. Resignation, removal or share transfer documents are important; however, on their own they do not produce the same result for every debt.
Who is a statutory representative?
A statutory representative is the person who is authorized and obliged to perform the relevant obligations of a legal entity. In a limited liability company, the office of manager and the representation arrangement are examined together with the relevant commercial law provisions; in a joint-stock company, the allocation of management and representation powers is examined in the same way. Working in fact at the company, having signed a document or holding the status of shareholder does not, on its own, show that a person was a statutory representative in all tax periods. 3 For details on the subject, see tax obligations when setting up a business.
The articles of association, resolutions of the company’s corporate bodies, any transfer of representation, the scope of the signing authority and trade registry records are assessed together. An accountant’s filing of a tax return does not by itself remove the manager’s statutory obligations. On the other hand, a limited commercial power of attorney is not always counted as a general statutory power of representation.
What matters if there is more than one manager?
Sole or joint representation, the division of duties and the periods of authority are important. The division of work inside the company does not remove statutory liability in external relations in every case. The defense that “the other manager was handling tax matters” must be explained together with the legally valid authority arrangement, the specific obligation and the actions the person could have carried out.
What is the difference between VUK Article 10 and repeated Article 35?
VUK Article 10 regulates the performance of tax obligations by statutory representatives. Tax and related receivables that cannot be collected, wholly or partly, from the assets of the taxpayer or the person responsible for the tax (vergi sorumlusu) because those obligations were not performed may be collected from the assets of those who did not perform their statutory obligations. The link between the breach of the obligation and the inability to collect is at the center of this provision. 1
Repeated Article 35 of Law No. 6183, on the other hand, regulates the liability of statutory representatives for public receivables that cannot be collected, or are understood to be uncollectible, from the assets of legal entities and of the organizations listed in the article. The special provision on tax receivables and the general public receivable provision cannot be used in place of one another on the idea that this would make collection easier. 2
Are tax, a tax penalty and another public receivable the same?
In the proceeding, the principal tax, the tax penalty, late payment interest and other administrative receivables should be shown separately. For tax penalties, the connection between VUK Article 333 and Article 10 applies; for receivables outside the scope of the VUK, the relevant special regulation is assessed separately. For receivables such as Social Security Institution (Sosyal Güvenlik Kurumu, SGK) premium debts, the provisions on duty and liability may differ. The outcome in an article on a tax action should not be carried over to all public debts. For details on the subject, see settlement in tax penalties.
How is the inability to collect from the company established?
A debt having been assessed against the company and the inability to collect from the company’s assets are not the same fact. The tax accrual, the payment order, notifications, the asset search, attachment and collection records are examined. When Tax Procedure Law Article 10 is applied, the condition in the statute that the tax “cannot be collected” should not be automatically replaced with the phrase “understood to be uncollectible” in repeated Article 35.
The representative may point to the company’s assets suitable for collection, to payments made, or to set-offs that the administration did not take into account. The administration, for its part, submits to the file the enforcement and collection inquiries it carried out. Instead of limiting the defense to “go after the company first,” it should be explained which shortcoming in the enforcement, or which existing assets, affected the outcome.
Why do the term of office and the date of the tax obligation matter?
The time of the event giving rise to the tax, the date on which the tax return had to be filed, the payment due date and the person’s term of office may all differ. On the date the representative took office, some obligations may already have been breached; other obligations may arise during that person’s term. For this reason, neither building liability only on the year to which the tax relates nor looking only at the payment due date is sufficient in every file.
As an example, after a manager has left office, additional tax may be assessed by examining a past period of the company. In this case, the notification of the payment order years later neither automatically proves nor automatically removes the former manager’s liability. It must be explained which obligation was not performed, on which date, during whose term of authority, and how this relates to the inability to collect.
Does resignation end liability?
The date of the resignation, its arrival at the company, whether a corporate body resolution is needed, the end of the power of representation and the registry procedures are examined together. A date on the resignation letter alone may not be sufficient as to delivery and the legal consequence. A notary notice, a delivery record, management or general assembly resolutions and trade registry announcements should be added to the file.
The end of the office matters for later obligations; it does not, however, automatically erase retroactively the liability arising from obligations during the term of office. A late correction of the registry entry should be distinguished from the actual and legal continuation of representation, and the effect on external relations should be assessed according to the specific case.
What did the Constitutional Court’s annulment decision change?
The Constitutional Court (Anayasa Mahkemesi, AYM) decision dated March 19, 2015, E. 2014/144, K. 2015/29, annulled paragraphs five and six of repeated Article 35 of Law No. 6183. These were provisions on the joint and several liability of representatives who served at different times and on the relationship between VUK Article 10 and repeated Article 35. The decision did not remove the statutory representative’s liability for all public debts. 4
The annulled texts should not be put in a petition as if they were a current provision of law. Even so, in a dispute from an earlier period, the entry into force, the provision to be applied and the effect of the decision in terms of time are examined separately. The result of the decision cannot be generalized into “a former manager can never be pursued under any condition.”
The defense of a person who is both manager and shareholder
Liability under Law No. 6183 Article 35 based on limited liability company shareholding is different from liability based on being a representative. In shareholding, the share ratio matters; in statutory representation, the same ratio does not automatically create an upper limit. It should be determined on which capacity and which amount calculation the payment order is based.
Collections made from the company, the shareholder or the representative must be reflected in the same debt account. The existence of more than one liable party does not justify collecting the same receivable over and over. If part of the debt has been paid by another liable party, the payment receipts and the current balance should be submitted together.
Liquidation or deregistration from the registry
A company entering liquidation does not automatically remove past representation obligations. For companies whose legal personality has ended, the special assessment and penalty provisions in VUK Article 10 and the arrangement for the liquidation period are assessed separately. These special situations should not be treated as entirely the same as the explanations set out for ordinary enforcement against a company. The dates of the start of liquidation, the liquidators and the deregistration from the registry are added to the file. 1
The case file against a personal payment order
The 15-day period from the notification of the payment order relating to the tax receivable must be protected. The petition clearly states the date and number of the personal act, the debt periods, the objections to the capacity of statutory representation, the provision to be applied and the evidence. An earlier action filed in the company’s name does not automatically protect the representative’s time limit against the representative’s own act. 2 5
- Documents of appointment, resignation, removal and power of representation.
- The articles of association, resolutions of corporate bodies and trade registry records.
- A schedule showing the dates on which the tax obligations arose and were performed.
- Notice of assessment, tax accrual, payment order and notification records.
- Collection actions against the company, assets and payment documents.
- Records showing that the obligation was performed or that the breach cannot be attributed to the person.
An action against a payment order does not automatically stop collection. If there is a risk of interference with personal assets, a stay of execution can be requested by explaining, with documents, the manifest unlawfulness and the damage that would be difficult or impossible to remedy. Whether the objection is to the whole act or to specific periods should be stated in the relief requested. For details on the subject, see deferral and installment payment of tax debts.
Conclusion
The tax liability of a statutory representative should be assessed not by title but on the basis of the provision to be applied, the term of office, the specific tax obligation and the conditions for collection from the company. Resignation and registry documents should be read together with the tax periods. Requests for annulment of a personal payment order and for interim protection should be prepared within their own time limits.
Frequently Asked Questions
Must a company manager pay the entire tax debt?
That conclusion cannot be reached without examining the conditions of liability. See the section on the distinction between VUK Article 10 and repeated Article 35. Return to the related explanation
If I resign as manager, are the old debts erased?
No. The obligations during the term of office and the legal effect of the resignation are examined separately. The section “Does resignation end liability?” explains this distinction. Return to the related explanation
Does the accountant’s mistake release the manager from liability in every case?
No. The relationship between the statutory obligation, the authority, the specific breach and the inability to collect is assessed. See the sections on the statutory representative and on VUK Article 10. Return to the related explanation
If I hold a 10 percent share in the company, is my liability as manager also 10 percent?
That result is not automatic. The conditions of liability as a shareholder and as a representative are different. See the section “The defense of a person who is both manager and shareholder.” Return to the related explanation
Does being held liable for a tax debt show that a tax offense was committed?
No. Liability for the collection of a public receivable is different from personal criminal liability. The distinction among the types of debt and in the sections on statutory representation should be taken as the basis. Return to the related explanation
Sources and legal bases
- Tax Procedure Law No. 213, Articles 10 and 333. Source text
- Law No. 6183, Article 35, repeated Article 35 and Article 58. Source text
- Turkish Commercial Code No. 6102, provisions on representation and management, especially Articles 367, 370, 623. Source text
- Constitutional Court (AYM), March 19, 2015, E. 2014/144, K. 2015/29. Source text
- Administrative Procedure Law No. 2577, Articles 3, 7–8 and 27. Source text