The Subsidiary Liability Regime of Company Director and the Interplay Between Tax Enforcement Powers and Sanctions Guarantees

Abstract

The Supreme Court, in its ruling of May 20, 2025, has confirmed the punitive nature of the subsidiary liability of company directors and has unequivocally upheld the application of the principle of presumption of innocence in the procedure by which such liability is declared. It places the burden of proof on the tax authorities, who must demonstrate the director's culpability rather than merely establishing their role. This decision, widely welcomed by legal doctrine, and the transposition of principles inherent to the Ius Puniendi into the field of tax collection, highlight the flaws in the design of the tax system, which allows for the transfer of sanctions to third parties and necessitates the application of safeguards typical of punitive proceedings to processes that fall outside that domain.