The decision usually arrives a few years after the company has, in practice, ceased to exist. An envelope from the tax authority, an act entitled “Decision imposing joint and several liability” and an amount that is no longer the company's, but yours. Personally. The state has a mechanism by which it creates, on its own, an enforceable title against your assets, without a trial, without a judge, one that you must then challenge yourself, within the time limit, on pain of forfeiture.
The underlying provision is Article 25 of Legea nr. 207/2015 (the Tax Procedure Code). It sets liability on two tiers, with different conditions.
Alongside the debtor, without the condition of insolvency (Article 25(1)): partners in associations without legal personality and their legal representatives who, in bad faith, caused the non-declaration or non-payment of obligations; garnishees who diverted amounts away from the freeze; a legal representative who, in bad faith, declares to the bank that the company holds no other available funds; the issuer of a guarantee letter who did not transfer the amounts.
For a debtor declared insolvent (Article 25(2)), the category that typically targets directors and shareholders. It covers persons who acquired assets in bad faith from debtors who thereby caused their own insolvency; directors and shareholders who caused the insolvency by disposing of or, in bad faith, hiding assets; those who, in bad faith, failed to apply in time for insolvency proceedings to be opened; those who, in bad faith, caused the non-declaration or non-payment by the due date of obligations. There is also Article 25(2¹), which does not require declared insolvency, only that the opening of the procedure should have been applied for. Notice the repetition: the phrase “in bad faith” appears in every limb. It is the key to the whole construction, and the starting point of any defence. I deal with it, together with the complete map of directors' liability, below.
Mere insolvency of the company does not trigger it. Mere non-payment does not trigger it. The tax authority must prove bad faith, a qualified subjective state of mind, distinct from commercial failure.
The basis is twofold: Article 12(4) of the Code (good faith is presumed until proven otherwise) and the legal nature of this liability, consistently classified in case law as tortious civil liability, which requires proof of the unlawful act, the loss, the fault and the causal link.
The High Court of Cassation and Justice (ÎCCJ) has been firm. It has held that it is mandatory to prove that the tax debt stems exclusively from the way the director exercised their duties, and that non-payment by the due date is a simple presumption from which the fulfilment of all the conditions of tortious liability does not follow, otherwise the result would be “automatic liability for the director”, contrary to the legislature's intent. Bad faith has been defined as a volitional state of mind, foreseeing the negative outcome and pursuing it, which must be actually proved, not presumed. Not every managerial shortcoming triggers it. And where the tax authority fails to prove it, or does so through generic formulas, the decision falls.
Equipment, stock, receivables, accounts, transferred to related persons or sold for token prices, followed by insolvency. This is the textbook case under Article 25(2)(b).
The old company is left with the debts, the new company takes over the customers, suppliers and employees. A current point to note: by Constitutional Court Decision No. 49/2025, limbs (b) and (c) of Article 25(3), covering relationships with customers/suppliers and with employees, were declared unconstitutional. A decision based on those limbs is directly open to challenge; only limb (a) remains applicable.
Amounts withdrawn as a loan to a shareholder, an unreconciled dividend advance, or unjustified cash, followed by an inability to pay. How the prosecution reads these flows, in the analysis on the director who “borrows from the company”.
What these three patterns have in common is not the legal form, but the intent that can be reconstructed: the asset was moved out of the tax creditor's reach, and the person who moved it knew what they were doing.
Liability is established by a decision imposing joint and several liability, a tax administrative act (Article 26(1)), with everything that follows from that as regards challenging it.
Article 26(2) requires the person to be heard; they may set out their position in writing within 5 working days. Paragraph (3) provides a rare sanction: a decision issued without a hearing is void. This is an express nullity, prejudice does not need to be proved.
The decision must set out the legal basis and the factual grounds, including the tax authority's reasoned opinion on the person's position (Article 26(4)(e)). Reasoning that is merely formal, and does not actually address the defences raised, is open to challenge.
For the cases under paragraphs (2) to (3), the principal debtor must have been declared insolvent under Article 265, as recorded in minutes of insolvency. Without this prior finding, liability cannot be imposed.
The decision must be challenged within 45 days of communication, on pain of forfeiture (Article 270(1)). It is a hard time limit: missing it closes off the route, however unfounded the decision might be. An administrative appeal does not suspend enforcement. If you want to stop enforcement, you must apply for suspension in administrative litigation, under Article 14 or 15 of Legea nr. 554/2004, proving a well-justified case and imminent harm, paying security calculated on a sliding scale under Article 278 of the Tax Procedure Code. The sliding scale matters: the security decreases as a percentage as the amount increases, which makes suspension accessible even for large sums.
Note two calendar traps. First: suspension obtained under Article 14 ceases automatically if the action for annulment is not brought within 60 days of communication of the outcome of the administrative appeal. Second: the time limit for bringing the substantive action before the court is 6 months, but it runs under Legea nr. 554/2004, not under the Tax Procedure Code. I set out the mechanics of stopping enforcement in the analyses on appeal against enforcement and on precautionary measures.
1. Challenging the bad faith, the central defence. If the tax authority has not proved the volitional state of mind, but has settled for presumptions (non-filing of returns, prolonged non-payment), the decision is vulnerable.
2. Absence of a causal link between the act alleged and the insolvency. It must be proved that your act caused the insolvency, not merely that the company ended up, for whatever reason, unable to pay.
3. Absence or reduction of the loss. If the principal tax obligation was finally annulled or reduced in another dispute, one of the conditions of tortious liability disappears. The res judicata effect of the judgment annulling the tax assessment decision can be relied on here.
4. Nullity for lack of a hearing (Article 26(3)) and generic reasoning (Article 26(4)(e)), procedural defences that do not depend on the merits of the case.
5. The time limit of the mandate, Article 25(5): liability concerns the obligations of the period for which you held the capacity on which the liability was based. Where there were successive directors, this is one of the most effective defences.
6. Unconstitutionality of Article 25(3)(b) and (c), for “phoenix” decisions based on those limbs, following Constitutional Court Decision No. 49/2025.
7. Limitation. The question of which time limit applies to a decision imposing liability remains controversial: the debate is between the 5-year period for the right to request enforcement, the 5-year period for the right to assess claims, and the general 3-year period for tortious civil liability, with no High Court decision settling it. Recent professional discussions among the litigation divisions place the start of the period at the date the debtor's insolvency was declared, without, however, expressly settling which period applies. It is a ground for defence, not a certainty.
NOTE, the red line. Challenging a decision imposing liability is a right and, often, a well-founded defence. Trying, however, to empty the company or to hide assets after learning of the risk, hoping that joint and several liability will not catch up with you, is exactly the conduct the law punishes.
Disposing of assets in bad faith, in the face of an inspection that has begun or a claim that has fallen due, does not just support the decision on joint and several liability, it can amount to a criminal offence: breach of trust by defrauding creditors (Article 239 of the Criminal Code) or, in insolvency, fraudulent bankruptcy (bancrută frauduloasă) (Article 241 of the Criminal Code). Transfers of this kind are, in addition, open to challenge through the actio Pauliana. A legitimate defence is conducted in the appeal and in court, with evidence, not by moving money on the eve of an inspection.
Joint and several tax liability and liability under insolvency law (Article 169 of Legea nr. 85/2014) are distinct routes. There is a nuance many people miss: in the Article 169 procedure, the tax authority cannot itself apply to the insolvency judge for liability to be imposed, that action belongs to the judicial administrator, the liquidator or, after the 2025 amendments, any interested creditor. The tax authority's own route remains the decision based on Articles 25 to 26.
Actual double recovery of the same loss is limited by the mechanism of joint and several liability and by the right of recourse. The relevant defence tool is res judicata: a final judgment that established the non-existence of the act, the fault or the causal link in one procedure can be relied on in the other.
Everything runs from it. Do not let it pass unverified, the 45-day time limit is a forfeiture period.
Neither unconditional payment (which can be construed as an acknowledgement), nor, still less, moving assets around (which makes the situation worse).
Analyse the documents on which the tax authority bases its finding of bad faith. That is where the case is won or lost.
Were you heard? Does the decision address your position? Was the principal debtor's insolvency established?
On the merits and on the form; if enforcement is threatening you, prepare the suspension request with security, and check the real limits of enforcement.
Not simply because the company did not pay. Joint and several liability requires bad faith, which the tax authority must prove, not mere non-payment or insolvency. If the decision rests on presumptions, not on concrete facts of bad faith, it is vulnerable. If, however, there were disposals of assets, their use for personal benefit, or intentional non-declaration, the situation is different and must be assessed on the evidence.
No. Joint and several means the tax authority can go after you directly for the whole amount, without splitting it. If you pay, you have a right of recourse against the other co-debtors and can lodge a proof of claim in the principal debtor's insolvency, but towards the state you are liable for all of it.
The administrative appeal does not suspend enforcement. Suspension is obtained separately, in administrative litigation, by proving a well-justified case and imminent harm and paying security calculated on a sliding scale under Article 278 of the Tax Procedure Code. It is achievable even for large amounts, precisely because of the sliding scale of the security, but it requires a separate application and attention to the 60-day and 6-month time limits.
This is a sensitive point. Under the Code, the tax obligations of struck-off legal persons are cancelled after the strike-off, if no other person's liability has been imposed for their payment. In practice, the principal debtor ceasing to exist before the decision is issued is raised as an argument against imposing joint and several liability, since it deprives the mechanism itself of substance. Order and timing matter, and the file must be assessed on its own facts.
Informative material, updated on 18 July 2026. It does not constitute legal or tax advice; individual situations must be assessed on their own facts. Legislation as at 18 July 2026.
If the appeal period is already running, the other analyses on this subject are grouped under tax litigation. For the concrete stages of a dispute, see tax disputes.
Time limits run from the date of communication. A first conversation clarifies what is being alleged, what you need to substantiate and how the defence is built, before an estimate becomes a tax assessment decision.