Tax Authority Wins a Civil Lawsuit Against a Creditor Participating in Distribution with Fictitious Claims to Obstruct Execution

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The National Taxation Bureau of the Northern Area（NTBNA）, MOF stated: In order to ensure the smooth execution of tax arrears cases, if it is found that a third party has participated in distribution with fictitiously claimed debt to obstruct execution, the Bureau will actively use civil litigation procedures to exclude them and collect taxes.

The Bureau provided an example: Taxpayer A, who owed over NT$60 million in individual income tax, had been subject to compulsory execution. The Yilan Branch of the Administrative Enforcement Agency of the Ministry of Justice auctioned the capital contribution in Company A made by Taxpayer A's guarantor B, for a bid amount of NT$30 million. C, a creditor entitled to a share of the distribution according to debt proportions, claimed a distribution of NT$20 million based on a ruling promissory note without providing proof of the debt's origin or the loan funds' flow. Suspecting collusion between C and Taxpayer A to fictitiously claim debt, the Bureau raised and won a civil lawsuit and successfully obtained a court judgment to correct the distribution table by excluding C's distribution.

The Bureau urges taxpayers and third parties not to collude in fictitious debt claims to obstruct tax collection. Upon discovery, the Bureau will actively use civil litigation procedures to remove obstacles. If taxpayers are found to intentionally conceal or transfer assets to evade tax collection, the Bureau will also exercise various tax preservation measures to ensure tax collection. 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/singlehtml/f48d641f159a4866b1d31c0916fbcc71?cntId=b05414b95df44717ab08fe17796eb7b3