Information
Consulting House Report
Dear Legal Representative,
You have taken the management of a company with a limited liability
(GmbH) or a branch office (Niederlassung) in Germany.
Therefore you are appointed as legal representative for the company.
With the following remarks we would like to make you aware of some
peculiarities relating to the law of taxtation at present applying
to the managing director of a GmbH. You are requested to fulfill the
duties of the company relating to law of taxation.
Therefore make sure in particular, that the tax returns of the company are prepared correctly and submitted to the tax office in due time. Please, pay attention, moreover, that these taxes and tax supplementary payments owed by the company are paid on schedule from the funds managed by the GmbH.
In case the company funds are not sufficient for amortization of all due liabilities (bank, tax, suppliers of the GmbH) please do not put the discharge of debts for the tax office aside. Use the demands of the tax authorities in the same measure as to the other debts (quota-like amortization of all debts).
Regarding the monthly payroll withholding tax of the employees of the GmbH, please take the following peculiarities into account. If the funds of the GmbH are not sufficient for the complete payment of the wages and salaries including the payroll withholding taxes and social contributions, the managing director is obliged to the GmbH to cut the pay of the employees. This cut has to be carried out in the way that an even satisfaction of the employees is guaranteed with regard to its shortened salaries and the tax authorities with regard to the payroll withholding taxes being allotted to the cut of the salaries .
We would like to give these notes to you because niglecting attention
of these duties can result in considerable financial disadvantages
for you as managing director. In contrary to civil law the managing
director has to take liability in case of negligent breach of the
tax duties of the GmbH, with their personal assets for the damage
resulted for the tax authorities.
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