The Subject of This Article and How It Differs From the Existing General Guide
The existing article of Güneş & Güneş Law Firm titled “Shareholder Liability for a Limited Liability Company's Tax Debt: Share Transfer and Objection to a Payment Order” addresses the general conditions of Article 35 of Law No. 6183, the share ratio, the relationship between the transferring and the acquiring shareholder, and the challenge to a payment order.[10] This article, by contrast, focuses on a narrower case-law question:
If the assessment and penalty ground for a tax relating to the period of shareholding arose after shareholding ended, through the act of another person, can the former shareholder be pursued?
This question differs from the question “which tax period does the debt relate to?” The real distinction is what the act giving rise to the public receivable or requiring the penalty is, when it occurred, and whether the former shareholder had any possibility of foreseeing, preventing or correcting that act.
The Legal Framework of a Limited Liability Company Shareholder's Liability for Public Debt
The General Rule of Article 35 of Law No. 6183
Under Article 35 of Law No. 6183, the shareholders of a limited liability company are directly liable in proportion to their capital shares for a public receivable that cannot be collected from the company in whole or in part, or that is understood to be uncollectible. If a share is transferred, the transferor and the transferee may be held jointly and severally liable, within the share ratio, for payment of public receivables relating to the period before the transfer. Joint and several liability also arises where the shareholders at the time the public receivable arose and at the time it had to be paid are different persons.[1]
This provision has two consequences together:
- A share transfer does not automatically eliminate every past debt.
- On the other hand, pursuing a shareholder depends on the specific fulfillment of all the conditions of Article 35, in addition to the existence of the company's debt.
Failure to Collect From the Company, or It Being Understood That Collection Is Not Possible
Although the shareholder's liability is called “direct,” the company is the principal debtor of the public debt. For recourse to the shareholder, the public receivable must not have been collected from the company in whole or in part, or it must be understood that it cannot be collected. The Collection General Communiqué likewise requires the outcome of the enforcement carried out against the company and the shareholders' share ratios to be determined.[2]
It is therefore not sufficient that the company has merely failed to pay the debt. The file should contain traces of at least the following steps:
- The assessment, accrual and finalization process in the name of the company,
- The payment order issued in the name of the company and its notification,
- The collection inquiry into the company's assets,
- Specific records on the failure of collection or on its being understood that collection is not possible,
- The share ratio of the pursued shareholder in the relevant period.
The Shareholder's Liability Is Limited to the Share Ratio
When the conditions prescribed by law are met, a limited liability company shareholder is, as a rule, liable not for all of the company's debt but for the amount corresponding to his or her capital share. Failure to show, or incorrect calculation of, the share ratio, the debt items and the liability period in the payment order may constitute an independent unlawfulness.
Joint and Several Liability of the Transferring and the Acquiring Shareholder
That the transferor and the transferee may be held jointly liable for public receivables before the share transfer is an express provision of Article 35. The decision of the 7th Chamber of the Council of State (Danıştay 7. Daire) E.2025/2770, K.2026/58 has emphasized in current practice, too, the acquiring shareholder's joint and several liability with the transferring shareholder for debts relating to the period before the transfer.[5]
However, this general rule does not mean that an independent act occurring after the share transfer can in every case be attributed to a shareholder of a past period. The decisions of the Plenary Assembly of the Tax Litigation Chambers (“VDDK”) examined below resolve precisely this second question.
The Liability of a Shareholder and of a Statutory Representative Are Not the Same
Liability arising from shareholder status rests on Article 35 of Law No. 6183; liability of a statutory representative rests chiefly on Article 10 of the Tax Procedure Law (VUK) and Article 35 (repeated) of Law No. 6183. The same person may be both a shareholder and a manager, but which capacity is relied on in enforcement must be clearly determined.[12]
Liability Arising From Shareholder Status
The shareholder's liability rests on the capital share, the condition of failure of collection from the company, and the period of shareholding. The Council of State and the Constitutional Court assess this liability, as a rule, within the framework of no-fault financial liability.[6]
Liability Arising From Capacity as Manager or Statutory Representative
In the liability of a statutory representative, the failure to perform the tax duty, the period of representation and the link to fault are important. Being merely a shareholder is not the same legal position as being a statutory representative with the authority to produce books and documents on behalf of the company. If a payment order confuses these two capacities, it should be examined separately as to its legal ground.
The Three Dates That Determine Liability
The Tax Period or the Date of the Event Giving Rise to the Tax
The first date is the period to which the tax relates. For example, the month in which the VAT deduction was used, the period in which a false document was recorded in the books, or the period of a tax that was declared but not paid is important. If the event giving rise to the tax and the tax conduct occurred during the period of shareholding, the fact that the assessment was made years later does not by itself remove the former shareholder's liability.
The Date on Which Shareholder Status Ended
The second date is the date on which the shareholder's legal tie with the company ended. This date should not be taken to be only the day the notarial agreement was drawn up and an automatic conclusion drawn. Article 595 of the Turkish Commercial Code (TTK), the articles of association, general assembly approval, registration and announcement, the share ledger and the specific transfer process must be assessed together.[13]
Without establishing the date on which shareholder status ended, it cannot be characterized as “after the share transfer” or “before the share transfer.”
The Date of the Ground for Ex Officio Assessment or of the Act Requiring the Penalty
The third date is the center of the analysis. The ground for ex officio assessment may arise from a real unrecorded transaction in the tax period, or it may arise years later because the books were not produced for examination. These two situations are not the same.
According to the VDDK, in examining the lawfulness of a payment order, not only the tax period but also the date and nature of the act that caused the receivable to arise must be assessed.[3] [4]
Failure to Produce Books and Documents After the Share Transfer
If the request for books and documents was made after the share transfer, and the authority and obligation to produce them rested with the new statutory representative, the former shareholder had no possibility of preventing the failure to produce that occurred later. In files in which VAT deductions were rejected solely because of the failure to produce, the basis of the assessment is a lack of proof arising later, rather than a hidden tax loss in the period of shareholding.[3] [11]
Breach of Voluntary Disclosure Conditions After the Share Transfer
If, after the share transfer, the company filed a return under voluntary disclosure (pişmanlık) but did not pay the tax and the voluntary disclosure surcharge within the statutory payment period, the act giving rise to the tax loss penalty is that later breach. The VDDK did not regard the former shareholder's having been a shareholder only during the tax period as sufficient for holding him or her liable for this penalty.[4]
A Corrective or Supplementary Return Filed After the Share Transfer
A corrective return does not produce the same result in every case. If the return only discloses unrecorded gross receipts or a false deduction that occurred during the period of shareholding and existed at that time, the source of liability may lie in the past period. By contrast, if the independent condition giving rise to the penalty is something the new management did or failed to do after the share transfer, the third date may become decisive.
An Act Occurring During the Period of Shareholding and Detected Later
If the use of a false invoice, undeclared gross receipts, failure to file a return, or failure to pay the accrued tax occurred during the period of shareholding, the fact that the tax examination and assessment took place later does not automatically cut off liability. What occurs later here is not the act itself but the administration's detection of the act.
It is therefore necessary not to confuse the date of the act with the date of detection.
What Do the Latest Council of State Decisions Say?
Council of State VDDK E.2023/291, K.2025/105: Books and Documents Not Produced After the Share Transfer
The Decisive Feature of the Case
The company's books and documents for 2012 and 2013 were requested in 2016, after the claimant's shareholder status had ended. The statutory representative of the new period did not produce the documents; VAT deductions were rejected, and tax and a tax loss penalty of three times the tax were assessed; the amounts that could not be collected from the company were demanded from the former shareholder by payment order.[3]
The Rule Adopted by the Assembly
The Assembly did not regard the existence of a tax relating to the period of shareholding as sufficient by itself. The decision states: “in addition to the period in which the tax receivable arose … the date on which the ground for ex officio assessment occurred … must be taken into account.”[3]
After transferring his shares, the former shareholder had no possibility of intervening in the company's management, the books or the production process. The assessment arose not from a finding that there was no real delivery or service during the period of shareholding, but from the later inability to prove, through production, that the conditions of the VAT deduction were met.
The Outcome of the Judgment
The VDDK rejected the administration's appeal against the decision of insistence that had annulled the payment order issued in the name of the former shareholder, and finalized the decision by majority vote. The dissenting opinion maintained that the shareholder liability in Article 35 is no-fault and that having been a shareholder in the tax period is sufficient.[3]
The Limit of the Decision
This decision does not mean that the former shareholder is released from all past-period debts. The outcome depends on the decisive cause of the assessment being the failure to produce after the share transfer.
Council of State VDDK E.2024/181, K.2025/752: Breach of the Voluntary Disclosure Condition After the Share Transfer
The Decisive Feature of the Case
After the former shareholder left, the company filed the 2014 return under the voluntary disclosure provisions; it did not pay the accrued tax and voluntary disclosure surcharge within fifteen days. A tax loss penalty was imposed for this breach, and the penalty was demanded from the former shareholder by payment order.[4]
The Rule Adopted by the Assembly
The VDDK held that, in assessing the lawfulness of the payment order, not only the period to which the tax relates but also the time of the act giving rise to the penalty must be examined. The decision contains the assessment that, as to the tax loss penalty that arose from the breach of the voluntary disclosure provision occurring after the share transfer, “it is not possible to hold them liable”.[4]
The Outcome of the Judgment and Its Limit
The Assembly found lawful the decision of insistence annulling the payment order issued for collection of the penalty. The subject of this decision is the tax loss penalty. The decision cannot be generalized to the effect that the principal tax accrued through voluntary disclosure can never be directed at the former shareholder; each debt item must be examined separately according to its own cause of origin and period.
The Line of Decisions in the Same Direction
The decisions of the Council of State VDDK E.2023/1538, K.2025/103; E.2023/1547, K.2025/104; E.2023/409, K.2025/106; E.2023/1705, K.2025/109 and E.2023/1707, K.2025/110 likewise reinforce a similar legal distinction as to the failure to produce books and documents occurring after the share transfer.
This line of decisions shows an important trend in practice. However, the fact that the decisions were given by majority vote, and that the dissenting opinions maintain the strict no-fault approach to Article 35, should not be read to mean that the debate has fully ended.
Council of State 7th Chamber E.2025/2770, K.2026/58: The Current Limit of the General Rule
In this 2026 decision, the 7th Chamber of the Council of State accepted that a shareholder who acquires the shares may be jointly and severally liable with the transferring shareholder for public receivables relating to the period before the transfer. The Chamber linked the concept of “the time the public receivable arose” in Article 35 to the event giving rise to the tax.[5]
This decision and the VDDK decisions above do not resolve the same type of case:
- The 7th Chamber decision discussed the tax debt relating to pre-transfer periods and the statutory joint and several liability of the transferee.
- In the VDDK decisions, by contrast, the breach of the independent obligation that actually gave rise to the public receivable or penalty occurred after the share transfer.
The new case law therefore does not abolish the general share transfer liability of Article 35; it only limits the attribution to the former shareholder of a later independent act.
The Constitutional Framework: The Balance Between No-Fault Liability and Proportionality
The Constitutional Court Decision E.2016/14, K.2017/170
The Constitutional Court did not find unconstitutional the provisions added to Article 35 that regulate the joint and several liability of the transferring and acquiring shareholders. The Court took into account, among the grounds for liability, the limited liability company shareholder's capital contribution and his or her ability to obtain information, to inspect and to supervise the management of the company.[6]
This decision preserves the constitutional basis of the general no-fault liability system of Article 35. However, the decision did not establish a specific provision that every debt arising, after shareholding ended, from the independent act of another person must necessarily be attributed to the former shareholder.
The Constitutional Court Decision E.2014/144, K.2015/29
This decision concerns not limited liability company shareholders but statutory representatives. The Constitutional Court regarded it as incompatible with justice and equity that a person who had performed his or her duty and tax obligations should be held liable for the act of another in a later period in which that person was not in office and had no possibility of intervening.[7]
The decision cannot be applied directly to the shareholder liability under Article 35. Nevertheless, with regard to the possibility of intervention, foreseeability and the independent act of a third person, it provides a constitutional ground of reasoning for the VDDK's proportionality interpretation.
The Right to Property and the Proportionality Review
Issuing a payment order in the name of a former shareholder interferes with the right to property, since it creates the threat of compulsory collection against the person's assets. Although the interference has a statutory basis and the legitimate aim of collecting a public receivable, the specific burden must be proportionate.
Dr. Yunus Emre Yılmazoğlu's 2025 paper likewise proposes that the nature of the ground for ex officio assessment and the date on which it arose be assessed in the context of the cause, purpose and subject elements of the administrative act and of the principle of proportionality.[9]
The VDDK's current approach has given this debate concrete form: if the former shareholder could not foresee or prevent the act occurring after the share transfer, the link between the act and past shareholder status may weaken, and the payment order may impose an unusual burden on the former shareholder.
In Which Case Can the Outcome Change, and How?
| Event | Decisive date and act | Position of the former shareholder |
|---|---|---|
| A tax declared during the period of shareholding but not paid | Accrual and due date in the period of shareholding, or a pre-transfer debt within the scope of Article 35 | Liability may continue, subject to the conditions of failure of collection from the company and the share ratio. |
| A false document or unrecorded gross receipts during the period of shareholding | The act giving rise to the tax loss in the period of shareholding; the examination later | A later assessment does not by itself remove liability. |
| Books and documents requested after the share transfer and not produced | The ground for ex officio assessment arises later from the new representative's failure to produce | According to the VDDK majority, the former shareholder cannot be held liable solely on account of shareholder status for the period. |
| Breach, after the share transfer, of the payment condition in a return filed under voluntary disclosure | The breach giving rise to the penalty occurs in the fifteen-day period after the share transfer | According to the VDDK, the former shareholder is not liable for the tax loss penalty imposed on this account. |
| A corrective return filed after the share transfer | Does the return explain a past act, or does it create a later independent breach? | There is no automatic answer; the principal tax and each penalty item must be examined separately. |
| A pre-transfer public debt of the acquiring shareholder | Statutory joint and several liability under Article 35/2 | The acquirer may be held liable, within the share ratio, together with the transferor.[5] |
How Should a Payment Order Issued in the Name of a Former Shareholder Be Examined?
The Fifteen-Day Period From Notification
The period for bringing an action against a payment order is fifteen days from notification. For tax debts, the competent court is the tax court. Bringing an action against a payment order does not by itself stop enforcement measures unless the court orders a stay of execution.[8] [14]
For this reason, the notification date, the electronic notification record, the time limit for bringing the action and the need for a stay of execution should be assessed on the first day.
Is the Legal Ground of the Payment Order Clear?
In what capacity has the payment order been directed at the former shareholder?
- As a shareholder under Article 35 of Law No. 6183?
- As a statutory representative under Article 10 of the VUK or Article 35 (repeated) of Law No. 6183?
- Have both capacities been used together without separating the periods?
If no link has been established between the legal ground and the debt items, the defense becomes more difficult and the act raises a problem of reviewability.
When Did the Act Giving Rise to the Public Receivable Occur?
The tax period, the assessment date, the notification date and the due date should each be written out separately. In addition, the following question must be answered:
Did the assessment or penalty arise from an act during the period of shareholding, or from an act or omission of the new management after the share transfer?
Without this distinction, an assessment based only on the period, such as “the debt relates to 2014,” is not sufficient.
Has the Enforcement Against the Company Been Completed?
The file should show whether a payment order was issued in the name of the company, proper notification, the search of the company's assets, the attachment results and the failure of collection. Personal enforcement cannot be carried out before the conditions for recourse to the shareholder have been met.[2]
Are the Share Ratio and the Liability Period Correct?
The start and end dates of shareholding and changes in the share ratio should be compared against the Trade Registry Gazette, the share ledger, the notarial agreement and general assembly resolutions. If the share ratio or the period of shareholding changed within a single annual debt, the items may need to be separated by period.
Have the Principal Tax and the Penalties Been Separated?
The same payment order may contain principal tax, late-payment interest, a tax loss penalty, a special irregularity penalty and other ancillary items. The legal cause of each item is not the same. In particular, in the voluntary disclosure breach decision, the VDDK's outcome concerns the tax loss penalty; this outcome should not be carried over automatically to the principal tax.[4]
Document and Evidence Checklist
| Document or record | What to examine |
|---|---|
| Notarized share transfer agreement | The date of the intention to transfer, the share ratio and the scope |
| General assembly/shareholders' resolution | The approval date and the transfer conditions |
| Trade Registry Gazette and registry records | The start and end dates of shareholder and manager capacities |
| Share ledger | The company's internal record of the shareholder and the share ratio |
| Letter requesting books and documents | The date, scope and addressee of the request |
| Proof of notification of the request letter | The start of the production period and the date of the act |
| Tax examination and tax technique reports | The true nature of the ground for ex officio assessment |
| Returns and corrective/voluntary disclosure petitions | By whom, when and why the return was filed |
| Tax and penalty assessment notices | The distinction between the principal tax and the types of penalty |
| Payment order issued in the name of the company | The existence and notification of enforcement against the principal debtor |
| Collection inquiry and attachment records | The condition of failure of collection from the company |
| Payment order issued in the name of the former shareholder | The capacity of liability, the share ratio, the period and the debt items |
| Electronic notification records | The start of the fifteen-day time limit for the action |
Common Mistakes in Practice
Treating the Tax Period Alone as Sufficient
Automatically attributing every item to the former shareholder because the debt relates to the period when he or she was a shareholder overlooks the VDDK's approach to the date of the ground for ex officio assessment.
Confusing the Capacities of Shareholder and Manager
Being a company shareholder does not mean being a statutory representative authorized in every period to produce the books. The two grounds of liability rest on different statutory provisions.
Determining the Effective Date of a Share Transfer From a Single Document
An automatic conclusion should not be drawn on the basis of the notarial agreement alone, the registration date alone, or the Trade Registry Gazette alone. Article 595 of the TTK and all of the company records should be assessed together.[13]
Assessing the Principal Tax and the Penalty on the Same Reasoning
The principal tax, late-payment interest and the different types of penalty may rest on separate acts. That one penalty cannot be attributed to the former shareholder does not mean that the entire payment order will be annulled without any examination.
Neglecting a Stay of Execution
An action against a payment order does not stop enforcement by itself. If there is a risk of precautionary attachment, electronic attachment or interference with a bank account, the request for a stay of execution should be supported with the elements of specific harm and manifest unlawfulness.[8]
Related articles: Shareholder Liability for a Limited Liability Company's Tax Debt: Share Transfer and Objection to a Payment Order; Liability of a Company Manager and Statutory Representative for Tax Debts; Action Against a Tax Payment Order and the Asset Declaration: The Fifteen-Day Period, Notification and Stopping Collection
Conclusion
In the tax liability of a former limited liability company shareholder after a share transfer, looking only at the tax period is no longer a sufficient examination. The general no-fault and share-proportionate liability system of Article 35 of Law No. 6183 is preserved; the liability of the transferring and acquiring shareholders for pre-transfer public receivables may continue. However, the latest VDDK decisions make it necessary, where the independent act giving rise to the public receivable or penalty occurred after the share transfer, to assess separately the date and nature of that act and the former shareholder's possibility of intervening.
For this reason, the following three-part test should be applied to a payment order issued in the name of a former shareholder:
- When is the event giving rise to the tax, or the tax period?
- On what date and by what legal act did shareholder status end?
- On what date, and by whom, was the act actually giving rise to the ex officio assessment or the penalty carried out?
If the failure to produce books and documents, or the breach of the voluntary disclosure condition, occurred after shareholding ended and the former shareholder no longer had the possibility of preventing it, then, according to the VDDK majority approach, personal enforcement based solely on past-period shareholding may be unlawful. By contrast, if the principal act giving rise to the tax occurred during the period of shareholding, the fact that the assessment or examination took place later does not by itself end liability.
Frequently Asked Questions
Is a Former Shareholder Who Transfers Shares Released From All of the Company's Tax Debts?
No. A share transfer does not automatically eliminate past-period public debts. For public receivables relating to the period before the transfer, joint and several liability of the transferor and the transferee may arise. However, the cause of origin and the period of each debt item must be examined separately.[1]
If Books and Documents Are Not Produced After the Share Transfer, Is the Former Shareholder Liable?
According to the VDDK's current majority approach, where the request for production and the failure to produce occurred after the share transfer and the former shareholder no longer had the possibility of intervening in the books and the management of the company, having been a shareholder in the tax period alone is not sufficient for liability.[3]
What Happens if a Voluntary Disclosure Return Is Filed After the Share Transfer and the Tax Is Not Paid?
In its decision E.2024/181, K.2025/752, the VDDK held that a former shareholder cannot be held liable for the tax loss penalty imposed on account of the breach of the voluntary disclosure payment condition after the share transfer. The subject of the decision is the penalty; the principal tax must be examined separately.[4]
Can the Former Shareholder and the New Shareholder Be Pursued Together for the Same Debt?
Yes. Article 35 of Law No. 6183 regulates the joint and several liability of the transferor and the transferee, within the share ratio, for public receivables relating to the period before the transfer. But it must be determined whether the debt truly relates to the period before the transfer and whether it arose later through an independent act.[1] [5]
Is the End of Shareholding the Same as the End of Service as Company Manager?
No. A person may leave the shareholding and remain a manager, or leave the management and remain a shareholder. Whichever capacity the payment order rests on, the period and the conditions of liability for that capacity must be examined separately.[12]
What Is the Time Limit for an Action Against a Payment Order?
It is fifteen days from the date of notification. Because bringing the action does not stop enforcement by itself, the need for a stay of execution must be assessed separately.[8] [14]
How Is the Date of a Share Transfer Proved?
The notarized share transfer agreement, the general assembly resolution, the Trade Registry Gazette, the trade registry records and the share ledger are examined together. The effect of the transfer date on the company and on third parties is assessed separately according to the specific case.[13]
Can One Decision Be Applied Unchanged to All Former Shareholder Files?
No. The distinguishing point of the VDDK decisions is that the ground for ex officio assessment or the act giving rise to the penalty occurred after the share transfer. A different result may be reached in files in which a real tax loss during the period of shareholding was detected later.
Sources and legal bases
- Law No. 6183 on the Procedure for Collecting Public Receivables (6183 sayılı Amme Alacaklarının Tahsil Usulü Hakkında Kanun), Art. 35 — Revenue Administration (Gelir İdaresi Başkanlığı). gib.gov.tr
- Collection General Communiqué Series A No. 1 (Tahsilat Genel Tebliği Seri:A Sıra No:1) — pursuit of limited liability company shareholders, Revenue Administration. gib.gov.tr
- Council of State Plenary Assembly of the Tax Litigation Chambers (Danıştay Vergi Dava Daireleri Kurulu), E.2023/291, K.2025/105, February 26, 2025. app.dejure.ai
- Council of State Plenary Assembly of the Tax Litigation Chambers, E.2024/181, K.2025/752, October 8, 2025. karararama.danistay.gov.tr
- Council of State 7th Chamber, E.2025/2770, K.2026/58, January 20, 2026. app.dejure.ai
- Constitutional Court, E.2016/14, K.2017/170, December 13, 2017. normkararlarbilgibankasi.anayasa.gov.tr
- Constitutional Court, E.2014/144, K.2015/29, March 19, 2015. normkararlarbilgibankasi.anayasa.gov.tr
- Revenue Administration, Procedures to Be Followed Against a Payment Order Brochure (Ödeme Emrine Karşı Yapılacak İşlemler Broşürü), 2026. cdn.gib.gov.tr
- Yunus Emre Yılmazoğlu, “The Liability of a Limited Liability Company Shareholder for Tax Assessed and Penalties Imposed on the Basis of an Ex Officio Assessment Ground Arising After Shareholder Status Has Ended” (“Ortak Sıfatının Sona Ermesinden Sonra Ortaya Çıkan Re’sen Tarh Nedenine Dayanarak Tarh Edilen Vergi ve Kesilen Cezalardan Limited Şirket Ortağının Sorumluluğu”), Abstract Book of the 11th International Asos Congress Law Symposium (11. Uluslararası Asos Congress Hukuk Sempozyumu Özet Kitabı), Asos Yayınevi, 2025, pp. 213–215. hesap.akademikiletisim.com
- Shareholder Liability for a Limited Liability Company's Tax Debt: Share Transfer and Objection to a Payment Order
- Failure to Produce Books and Documents: Request Letters, VAT Deduction and Penalty Consequences
- Liability of a Company Manager for Tax Debts
- Share Transfer in a Limited Liability Company: Notary, Approval and Registration
- Action Against a Tax Payment Order and the Asset Declaration