THE BOTTOM LINE
- Director Liability is Real: Directors can be held criminally responsible for their company’s failure to file tax returns, facing penalties like suspended prison sentences, even if they claim not to have personally seen the official notice.
- The Burden of Proof Shifts: If the tax authority can prove a notice was delivered to your registered business address, the legal burden shifts to you to disprove receipt. A simple denial is legally insufficient.
- Internal Controls are Crucial: This ruling highlights the critical need for robust internal procedures for receiving, logging, and actioning all official correspondence to prevent significant compliance failures and personal liability.
THE DETAILS
A director in Curaçao recently learned a hard lesson when his company failed to file profit tax returns for 2020, 2021, and 2022. The tax authority, after previous attempts, sent a final notice to the company’s registered address, setting a clear deadline for submission. Evidence showed the letter was delivered and signed for by an individual at that address. Despite this, the director argued in court that he never personally received the letter and did not know the person who signed for it. The company subsequently missed the filing deadline, triggering a criminal prosecution against the director personally.
The Court of First Instance of Curaçao swiftly rejected this defense. The court’s reasoning was grounded in a well-established legal principle: the tax authority’s duty is to ensure the notice reaches the taxpayer’s official address, not necessarily the director’s personal hands. By providing proof of delivery—that the notice was sent to the correct address and its receipt was confirmed with a signature—the authority created a strong legal presumption that the company had been properly notified. The court found the director’s simple denial, without any substantiating evidence, was not enough to challenge this presumption.
Ultimately, the court held the director personally liable under the principle of factual leadership (feitelijke leiding). As the managing director, he was deemed ultimately responsible for the company’s administrative and fiscal compliance. The failure to file was treated not as a mere administrative lapse but as a criminal offense committed by the company under his direction. The verdict serves as a stark reminder for all corporate leaders: the responsibility for tax compliance is absolute, and the “lost in the mail” defense will not stand up in court when faced with proof of delivery.
Source: Gerecht in eerste aanleg van Curaçao
