When can a director be held personally liable for a company’s tax debts?

When a company can no longer pay its taxes, the tax authorities may, in certain cases, seek payment from its director personally.

A company is generally responsible for paying its own debts. Tax law makes a notable exception: Article L. 267 of the French Tax Procedures Code (Livre des procédures fiscales, LPF) allows the tax collection officer (comptable public) to have the director declared jointly and severally liable for the taxes and penalties owed by the company, where the director’s breaches of tax obligations or fraudulent conduct have made their collection impossible.

This action, brought before the president of the judicial court (tribunal judiciaire), usually follows a judicial liquidation, sometimes several years after the events. Other joint and several liability mechanisms exist, in particular following a criminal conviction for tax fraud.

As with joint tax liability between former spouses, personal liability is subject to strict conditions. Directors can challenge the action and have several options even after judgment.

1. When is a director liable for the company’s tax debts?

What are the conditions of Article L. 267 of the LPF?

Article L. 267 of the LPF covers any person who, de jure or de facto, directly or indirectly, actually manages the company, legal entity or group. It therefore concerns the manager (gérant), the chairman or a board member, but also a de facto director who makes the decisions while the formally appointed director acts as a figurehead.

For a de jure director, the Cour de cassation specified, in a published judgment of 7 October 2026 (no. 25-17.146), that it is the director’s responsibility to ensure that the company complies with its tax obligations. The director is therefore presumed to be responsible for them and, if they dispute this, must show that they did not actually manage the company. This presumption does not relieve the tax collection officer of the obligation to establish the other conditions for joint and several liability.

Next, the director must be responsible for fraudulent conduct or for a serious and repeated failure to comply with tax obligations. According to the same judgment, the latter requires neither fraudulent intent nor bad faith, and the company’s cash-flow difficulties do not excuse the failure. VAT returns repeatedly filed without payment may thus amount to a serious and repeated failure.

Seriousness is nevertheless assessed in the light of the circumstances. Failure to pay over VAT collected from customers is regarded as serious, in particular where the company continues to pay its suppliers at the same time (Cass. com., 23 June 2004, no. 01-11.821). Conversely, the Cour de cassation has accepted that a court of appeal could find that the failure was insufficiently serious where the VAT declared had not yet been collected, owing to the payment terms granted to customers, and where the tax was subsequently paid over to the Treasury under the business transfer plan (Cass. com., 14 March 2006, no. 03-17.895). This assessment remains specific to each case.

The failures must also be precisely identified and relate to the period during which the person concerned actually managed the company. General statements about the size of the debt or the company’s “artificial survival” are not enough (Cass. com., 5 November 2025, no. 24-19.978).

Finally, the tax collection officer must establish that the tax debt is definitively irrecoverable and that the conduct alleged against the director made recovery impossible. This causal link is often central to the director’s defence.

What other forms of joint and several liability exist?

Following a final conviction for tax fraud under Article 1741 of the French General Tax Code (Code général des impôts, CGI) or for certain related offences, the criminal court may, under Article 1745 of the CGI, declare the convicted person jointly and severally liable with the company for the tax evaded and the related penalties.

This is a discretionary power: the criminal court may convict for fraud without ordering joint and several liability. Where the criminal court has ordered it, the tax authorities consider that the action under Article L. 267 of the LPF can no longer cover the same sums, since that provision only applies to a director who is “not already liable for payment of the company’s debts under another provision”. The tax collection officer may, however, use it for taxes not covered by the criminal conviction.

Article 1754 of the CGI also provides for the joint and several liability of de jure or de facto directors for certain fines owed by the company, in particular the fine under Article 1759 of the CGI, which penalises a company that refuses to disclose the identity of the recipients of income it has paid or distributed. The fine is equal to 100% of the sums paid or distributed, or 75% where the company voluntarily disclosed those sums in its tax return.

Finally, the action under Article L. 267 of the LPF is independent of insolvency proceedings. The tax collection officer is not required to wait for the liquidator to bring an action against the director for liability for a shortfall in assets under Article L. 651-2 of the French Commercial Code: the absence of such an action does not prevent joint and several tax liability, as the Cour de cassation held on 7 October 2026. Sums recovered in respect of that shortfall benefit all creditors, and not the Treasury alone.

2. How can the tax collection officer’s action be challenged?

Did the director’s conduct make the debt irrecoverable?

Admission of the tax claim in the liquidation proceedings and the stay of individual enforcement proceedings do not, in themselves, establish that the debt is irrecoverable. The court must determine whether recovery has become definitively impossible (Cass. com., 11 March 2026, no. 24-22.927).

The director may then argue that the impossibility of recovery results not only from their own failures, but also from failings on the part of the tax authorities. The court may not hold the director jointly and severally liable without examining the circumstances, other than the mere failure to file or to pay, that made recovery impossible, and in particular without checking that the tax authorities carried out in good time the audits and enforcement measures incumbent on them (Cass. com., 22 October 1991, no. 90-10.029). The director should identify the specific shortcomings they rely on, such as tax clearance certificates (quitus fiscaux) issued without prior checks (Cass. com., 27 June 2019, no. 17-22.326) or a failure to take timely steps to recover the debt from the company (judgment of 23 June 2004, cited above).

An audit carried out within the limitation period for reassessment does not, in itself, amount to such a failing (Cass. com., 17 June 2026, no. 25-15.031), and the company’s economic difficulties alone are not enough to break the causal link either (Cass. com., 6 October 2015, no. 14-20.352). The defence therefore consists in reconstructing the chronology of the case: the dates of the returns, the audits, the issue for collection, the first enforcement measures and the opening of insolvency proceedings.

This chronology also makes it possible to rule out failures after the judgment opening the proceedings. Divested of their powers in favour of the liquidator and prohibited from paying earlier debts, the director cannot be held responsible for a failure to pay that they no longer had the power to prevent (judgment of 5 November 2025, cited above).

Has the action been brought properly and in time?

The tax collection officer summons the director before the president of the judicial court for the place of the registered office, who rules under the fixed-date procedure (procédure à jour fixe), which leads to an early hearing (Article R* 267-1 of the LPF). According to the tax authorities’ guidelines, the action must be authorised in advance by the head of the departmental public finance directorate, who must take that decision personally. No prior adversarial procedure is required, however, before the summons (Cass. com., 15 February 2023, no. 21-18.395).

Article L. 267 of the LPF sets no time limit of its own. The action remains possible as long as collection against the company is not barred by the four-year limitation period under Article L. 274 of the LPF, with a new period beginning when the liquidation closes (Cass. com., 6 July 2022, no. 20-14.532).

The action must nevertheless be brought within a reasonable time from the moment the tax authorities were able to establish that recovery was definitively impossible. That moment may be the liquidation judgment itself, without waiting for its closure (Cass. com., 1 April 2026, no. 25-13.886). No threshold is set: in that case, around four years separated the liquidation judgment from the summons, and the Cour de cassation referred the case back for an assessment of whether the delay was reasonable. A late summons may therefore be challenged, on a case-by-case basis.

Where the company was granted a payment plan, the tax authorities’ guidelines provide that the director should be informed of the risk of a joint and several liability action if the plan is not honoured. The Cour de cassation accepts that this information may be given by the committee of heads of financial services (CCSF) that granted the plan (Cass. com., 25 January 2023, no. 20-22.939). Whether this information was given, and when, is worth checking.

Take the example of a limited liability company (SARL) that files its VAT returns without paying throughout 2021, for a total of 120,000 euros. The business tax office takes no enforcement action before the end of 2022, although the company still owns a business and is owed money by its customers. Judicial liquidation is ordered in 2023, on the basis of a report concluding that the liabilities cannot be settled, and the director is summoned in 2026.

In this situation, the director may argue that the tax collection officer’s failure to act while assets were available for enforcement contributed to making the debt irrecoverable. It is for the director to document this inaction, by establishing the existence of those assets and the absence of any formal notice or attachment. The director may also argue that the summons, issued three years after the liquidation judgment, was not brought within a reasonable time. Neither argument erases the director’s own failures, but each may lead to joint and several liability being ruled out.

When the summons arrives, time is short: the fixed-date procedure leads to an early hearing, for which the defence must be ready. The first checks concern the prior authorisation, and in particular the identity and authority of the person who signed it, the period of actual management and the breakdown of the sums claimed, tax by tax and period by period. At this stage, the director may dispute the existence and amount of the tax debt and, if the challenge is serious, ask for the question to be referred to the tax court.

The next step is to gather the company’s filing and payment history, the correspondence with the business tax office, any payment plans and the documents of the insolvency proceedings: the opening judgment, the reports of the court-appointed officer, the liquidation judgment and, where applicable, the closure judgment. These documents make it possible to establish when the debt became irrecoverable and assess whether the tax authorities acted promptly. A disposal of personal assets may be scrutinised if it appears designed to frustrate enforcement and could prompt protective measures.

3. What can be done after a joint and several liability judgment?

Can the tax itself still be challenged?

The civil court rules on joint and several liability, not on the tax. The director held liable may therefore challenge before the tax court the lawfulness and merits of the taxes for which they have been made liable, even if the company did not do so. They may not, however, call into question there the basis or scope of their joint and several liability, which fall within the exclusive jurisdiction of the civil court (CE, 4 December 2024, no. 493365).

A new time limit for filing a formal tax claim begins to run. The decision making the director a joint debtor, or its service where required, is an event within the meaning of Article R* 196-1 of the LPF (CE, 30 December 2021, no. 442804). The director may thus challenge the reassessment until 31 December of the second year after the year in which the decision was made or, where service is required, served. They may also request the stay of payment provided for in Article L. 277 of the LPF, although its application to a joint debtor has not been expressly settled; above a certain amount, the stay is subject to the provision of security.

The amount of the judgment must also be checked. Joint and several liability covers only taxes and penalties: the director cannot be ordered to pay statutory interest on those sums, the Cour de cassation drawing no distinction according to the date from which such interest would run (Cass. com., 27 November 2024, no. 23-18.572, published). It is further limited to the taxes relating to the period of actual management, and to the sums substantiated by the tax collection officer.

The decision of the president of the judicial court may be challenged on appeal. The judgment is, however, generally enforceable on a provisional basis: an appeal does not prevent the tax collection officer from pursuing collection or from taking protective measures in respect of the director’s assets, as provided for in Article L. 267 of the LPF.

Can a discretionary discharge be obtained?

Article L. 247 of the LPF allows the tax authorities to discharge persons liable for taxes owed by a third party from that liability. This option is available to a director held jointly and severally liable, whether the liability results from a decision of the civil court or of the criminal court.

The director of public finances decides applications up to 305,000 euros per assessment, year, financial year or case. Above that amount, the decision rests with the minister responsible for the budget (Article R. 247-10 of the LPF). The application should ideally show, with supporting documents, that the director’s income and assets do not allow them to pay the debt. If discharge is refused, the director may ask the tax collection officer for time to pay, which, according to the tax authorities’ guidelines, the court cannot grant.

A refusal may be challenged by an application for annulment (recours pour excès de pouvoir) before the administrative tribunal, within two months. The court reviews errors of law, errors of fact and manifest errors of assessment; if it annuls the refusal, the tax authorities must re-examine the application in accordance with the judgment. The Conseil d’État has held that the prohibition on remitting certain taxes, in particular VAT, cannot be relied on against an application for discharge from joint and several liability (CE, 12 March 2014, no. 355306).

This route is worth considering without delay. The decision ordering joint and several liability and fixing the amount owed is an enforceable instrument, which may be enforced for ten years, as the Conseil d’État has held for joint and several liability ordered by the criminal court (CE, 21 May 2025, no. 476240). An old debt is therefore not necessarily extinguished.

Based in Nice, Valenor advises directors facing proceedings under Article L. 267 of the LPF or Article 1745 of the CGI, from responding to the summons to challenging the underlying tax assessments and applying for a discretionary discharge.

We protect the director’s personal assets: we reconstruct the chronology to test each condition for joint and several liability and challenge the action where the tax authorities failed to take timely recovery steps or waited too long to bring proceedings.

Bruno Gherardi
Tax lawyer in Nice - Cabinet Valenor