Volume 44 (2016) / Issue 4

Jan Elbers, 'Challenging Prejudice to Creditors Involving Abuse of Separate Identities in Tax Matters; a Dutch Approach' (2016) 44 Intertax, Issue 4, pp. 324–333


Separateness of identities implies that (juristic) persons are exclusively liable for own debts. This concept, however, could result in prejudice to creditors or might even lead to such prejudice involving abuse of separate identities of (juristic) persons. When a director (A), with the help of a juristic person (B) who is affiliated to a tax debtor-juristic person (C), frustrated recovery against (C), the tax collector in the Netherlands has the power to invoke several means of legal redress. The tax collector could hold (A) liable for specific tax debts, on the basis of Article 36 Tax Collection Act 1990. However, if the claim cannot be recovered from (A), the tax collector would prefer to hold (B) liable. Normally, in such cases, liability provisions in the Tax Collection Act 1990 do not offer a sufficient solution. The tax collector could, however, on the basis of the so-called “open system” (Article 124 of Book 4 of the General Administrative Law Act) invoke “piercing the corporate veil”, in order to extend liability to (B). The author makes an assessment of the question as to whether “piercing the corporate veil” for tax collection purposes in the Netherlands is “lawful” within the meaning of Article 1 of Protocol No. 1 to the ECHR (the peaceful enjoyment of one’s property).

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ISSN: 0165-2826
ID: TAXI2016025