Directors Restricted from Travel Abroad Due to Company’s Tax Debt
In an example given by the National Taxation Bureau of the Northern Area (NTBNA), MOF, that Mr. A, a director of Company A, took advantage of the consecutive holidays to arrange a long-awaited trip abroad as the epidemic subsides and borders reopen. To his surprise, as he was going through the departure procedures at the airport, he was restricted from leaving the Republic of China by Customs due to the company's unpaid taxes. Mr. A was furious and argued that although he serves as a director of the company, he is not the chairman, and the company's unpaid taxes should not be his concern. He questioned why he was restricted from leaving the ROC.
The Bureau explained that according to Paragraph 3, Article 24 of the Tax Collection Act, if a profit-seeking enterprise owes confirmed tax payments exceeding NT$2,000,000, or owes tax payments exceeding NT$3,000,000 before the conclusion of procedures for administrative remedies, and meets the conditions stipulated for "Restriction on Exiting and Lifting of Exit Restrictions on Tax Debtors or Responsible Persons of Profit-Seeking Enterprises with Tax Arrears", the responsible persons may be restricted from leaving the ROC. Company A, a company limited by shares, has accumulated about NT$21.18 million in unpaid profit-seeking enterprise income tax. The Bureau found that the conditions for restricting the responsible persons’ leaving the ROC were met. However, Company A's registration was nullified by the Ministry of Economic Affairs. According to Article 24 and Article 26-1 of the Company Act, Company A should undergo liquidation, during which the liquidators should act as the legal representative. If it is deemed necessary to restrict the responsible persons from leaving the country, the liquidators should be the subject of the travel restriction. Upon investigation, it was found that the Company's articles of incorporation did not specify a liquidator, and the shareholders' meeting did not pass any resolution to appoint a liquidator. Therefore, according to Paragraph 1, Article 322 of the same law, all directors should act as the liquidators. Mr. A serves as a director of the company, and in order to safeguard tax claims, the Bureau has the authority to restrict Mr. A from leaving the ROC.
The Bureau advises that if one holds a position as a director of a company limited by shares, he or she should not ignore the company's unpaid taxes simply because the company's registration has been nullified by the Ministry of Economic Affairs. Even if he or she does not serve as the chairman of the board of company, they could still be subject to travel restrictions due to their role as a director, which, according to the law, could entail acting as the liquidator. If there are any further questions, please dial the toll-free service number 0800-000321 for detailed consultation.
News contact: Ms. Wang, Head, Collection and Information Management Division.
Tel. No. 03-3396789, Ext. 1180
Reference URL：https://www.mof.gov.tw/Eng/multiplehtml/f48d641f159a4866b1d31c0916fbcc71