In its ruling of June 25, 2025 (GZ Ro 2023/13/0020, RIS), the Higher Administrative Court issued a groundbreaking decision for tax liability practice. The central question was whether an authorized representative of a GmbH (limited liability company) qualifies as a "representative" within the meaning of Sections 80 et seq. of the Federal Fiscal Code (BAO) and can thus be held personally liable for the company's uncollectible taxes under Section 9 (1) of the BAO.
The appeal case concerned an authorized signatory of a limited liability company active in prefabricated housing construction, against which restructuring proceedings and subsequent bankruptcy proceedings were initiated in 2015. After the bankruptcy proceedings were lifted in 2019 and the company was deleted from the commercial register, the responsible tax office initially held the former authorized signatory liable for the company's tax debts for 2014 and 2015 by notice dated October 29, 2019, pursuant to Section 9 in conjunction with Sections 80 et seq. of the Federal Fiscal Code (BAO).
The Federal Fiscal Court (BFG 24.04.2023, RV/2100215/2023) overturned the liability assessment. It held that an authorized signatory (Prokurist) was not a representative appointed to represent legal entities within the meaning of Section 80 of the Federal Fiscal Code (BAO) and therefore could not be held liable under Section 9 of the BAO. Section 83 of the BAO, which the authority had relied on, merely regulates the right of representation before the tax authority and does not create liability. The tax office filed an administrative appeal against this decision.
The Higher Administrative Court declared this appeal admissible and well-founded. The Higher Administrative Court clarified that liability under Section 9 (1) of the Federal Fiscal Code (BAO) is not limited to legal representatives in the narrow sense. The decisive factor is the wording of the provision, according to which all representatives named in Sections 80 to 83 of the Federal Fiscal Code (BAO) – and thus also voluntary representatives – are potential addressees of liability. The Court based its reasoning on a historical interpretation. The provision of Section 9 of the Federal Fiscal Code (BAO) goes directly back to Section 109 of the Reich Fiscal Code 1931 (AO 1931), which expressly also covered "authorized representatives and persons authorized to dispose of the assets." When enacting the Federal Fiscal Code 1961, the legislature deliberately retained the possibility of liability for such representatives, even though this liability was designed as pure liability for default (ErlRV 228 BlgNR 9. GP 56 f).
Teleologically, the Administrative Court concluded that the liability provision in Section 9 of the Federal Fiscal Code (BAO) serves the purpose of ensuring the collectability of taxes and holding those persons responsible who have a factual or legal influence on the fulfillment of tax obligations. This objective argues against a narrow interpretation limited only to managing directors. Furthermore, the Court referred to relevant literature supporting the broad interpretation.
The Higher Administrative Court overturned the contested decision of the Federal Finance Court due to its unlawful content (Section 42 (2) (1) of the Administrative Court Act). It held that authorized signatories, as "representatives designated in Sections 80 et seq. of the Federal Fiscal Code," may also be considered liable and can therefore be held liable under Section 9 of the Federal Fiscal Code in the event of a culpable breach of duty.
This decision significantly expands the circle of persons liable under tax law. In the future, not only managing directors, but also authorized representatives and other authorized representatives entrusted with tax-related tasks can be held personally liable if they thwart the collection of taxes through culpable breach of duty.
For companies, this means the need to clearly document internal responsibilities regarding tax matters, define control and reporting obligations between management and authorized representatives, and precisely delineate powers of attorney in tax matters to minimize liability risks. For authorized representatives, this also results in a very significant duty of care: Those entrusted with tax matters must ensure timely and complete tax payments and immediately inform management in the event of liquidity bottlenecks. Failure to do so through negligence may result in personal liability.
For companies with complex corporate structures, it is advisable to review the representation regulations in the company and power of attorney regulations and clearly define tax responsibilities. In the event of impending insolvency, immediate coordination between management, authorized signatories, and tax advisors should take place to exclude personal liability.
Administrative Court 25.06.2025, Ro 2023/13/0020
02.10.2025