Latvia's Supreme Court reviews attempt to collect tax debt from ex-board member's personal assets

Latvia's Supreme Court Senate has recently examined a case addressing whether tax debts left behind by a bankrupt and subsequently liquidated company can be collected from a former board member's personal assets.

The dispute originates from an attempt by the State Revenue Service (VID) to direct debt collection against the private property of a company board member, after the company itself had become insolvent and was later liquidated. VID argued that, under these circumstances, recovering the debt from the board member's personal assets was justified.

Regional Court ruled otherwise

However, in the lower-instance proceedings, the Regional Court (Apgabaltiesa) issued a ruling that did not support VID's position. Disagreeing with that decision, VID appealed it to the highest judicial instance, the Senate, which has now reviewed the case.

Disputes of this kind are considered significant, as they touch on a broader principle: to what extent company executives can be held personally liable for a company's unpaid obligations once it is liquidated. The Senate's approach to this case could serve as a reference point for other similar situations in which the tax administration seeks to recover debts from companies that no longer exist.

The source report does not specify the company's name, the identity of the board member, the size of the debt, or the Senate's final ruling in the case.