萬國法律事務所

Before the enterprise proceeds with the legal liquidation procedure, if the tax authority finds that the enterprise commits tax evasion and reports to the competent court as a creditor, the tax authority has the power to request the enterprise to pay the tax amount the enterprise has evaded. The tax authority emphasizes that if the enterprise commits any violation of laws/regulations and has not corrected such violation, the company remains responsible for its tax obligation and under such circumstance, and the company despite dissolved and completed the liquidation shall be deemed as existing entity.

In practice, X Company sold leather to Y Company; however, X Company neither issued invoice(s) nor reported the business tax return of this transaction. The tax authority found out such behavior of X Company was involved in violation of applicable laws/regulations. The tax authority, therefore, imposed a fine on X Company and further required X Company to repay the tax amount. This case was appealed to the Administrative Court by X Company on the basis that X Company had been liquidated and reported to the competent court in this regard (“Report”).

Nonetheless, the Administrative Court decided that the nature of X Company’s Report was only a notice. The liquidation should be completed after X Company actually repaid the tax amount which X Company had evaded.