Manager Liability for Company Tax Debts — Art. 19 DOPK (2026)

Legal framework and rationale of Art. 19 DOPK

The core principle of corporate law is that a limited-liability entity (LLC, single-member LLC, JSC) is liable for its obligations only with its own assets. Owners and managers bear no personal liability — that is the essence of “limited” liability.

Art. 19 DOPK creates an exception to this principle — but only for public liabilities (taxes and social security) and only upon intentional concealment or obstruction of collection. The purpose is to allow the NRA to reach personal assets when management has “hollowed out” the company, leaving a shell.

Statutory text (abridged)

Art. 19(1) DOPK: “A member of a management body or manager of an obligated legal entity who conceals facts and circumstances that by law he must notify the revenue body of..., and as a result liabilities for taxes or mandatory social insurance contributions cannot be collected, is liable for the unpaid liability.”

Art. 19(2) DOPK: analogous for majority partners and shareholders who have permitted concealment regarding the disposition of the company’s property.

Subsidiary nature (Art. 20 DOPK)

Liability under Art. 19 is subsidiary, not joint and several. This means:

• The NRA first pursues the assets of the company — the obligated person.
• Only when those assets are exhausted or insufficient is enforcement pursued against the third person’s assets.
• Among multiple liable persons (co-managers, multiple partners), liability is joint and several — the NRA may seek full performance from any.

Who can bear liability (subjects)

Art. 19 DOPK covers a broader range of persons than simply the “manager under Art. 141 CA”. Takeaways from Supreme Administrative Court (SAC) case law:

De facto manager — a special category

When a person de facto makes management decisions without being registered in the Commercial Register, the SAC holds that they too fall under Art. 19 liability. Indicators of de facto management:

• Signing operational documents (invoices, contracts, bank payments);
• Presenting to third parties as “owner” or “boss”;
• Access to bank accounts and seals;
• Correspondence with NRA and counterparties.

The four cumulative preconditions

The NRA cannot automatically extend liability to a manager. All four conditions must be proven simultaneously:

1. Capacity of the person

The person must have held one of the Art. 19 capacities (manager, member of organ, commercial attorney, de facto manager, majority partner) during the occurrence or existence of the public liability. No liability arises for obligations after the capacity ends.

2. Established unpaid liabilities

The company must have:

• Established public liabilities (via tax audit act, declaration or other instrument);
• Liabilities unpaid on time;
• Liabilities not extinguished by limitation (Art. 171 DOPK).

3. Wilful action or omission

This is the hardest to prove. Intent is required — not mere negligence. Typical actions:

• Transferring assets to related parties below market price;
• Draining bank accounts before enforcement proceedings;
• Concealing income (off-invoice sales, double books);
• Filing false declarations to reduce liabilities;
• Not remitting withheld taxes (VAT collected from clients, not paid to NRA);
• Using company funds for personal purposes.

Ordinary inability to pay due to business difficulties is not grounds for Art. 19 liability. The intent must aim at obstructing collection.

4. Causal link

The manager’s action/omission must have caused the inability to collect. If the company became insolvent due to objective market factors (loss of a key customer, pandemic, sanctions), the causal link is missing.

Procedure of establishment

Step 1: Audit of the company

The NRA first conducts a tax audit of the company and establishes the liabilities with an audit act under Art. 118 DOPK.

Step 2: Enforcement against the company

The public enforcement officer pursues the company’s assets. If results show insufficient or absent assets, the next step follows.

Step 3: Separate audit of the manager

The NRA begins a separate audit of the manager (or partner) as an individual to establish Art. 19 liability. The audit follows the general DOPK procedure, with the same rights — service of audit report, objections, supporting documents. See our article on NRA audits.

Step 4: Issuance of a tax audit act

Upon confirmation of preconditions, the NRA issues a separate audit act against the manager, establishing:

• Capacity of the person in the relevant period;
• Specific actions or omissions;
• Causal link;
• Amount (principal + interest);
• Liabilities covered (typically taxes and social contributions);
• Payment deadline.

Step 5: Enforcement against the manager

Upon non-payment, the public enforcement officer pursues the manager’s personal assets: bank accounts, salary, vehicle, real estate, shares in other companies.

Appeal of the Art. 19 tax audit act

An audit act establishing Art. 19 liability is appealed under the general DOPK procedure:

1. Administrative appeal to the director of the “ODOP” directorate at NRA HQ — 14 days from service.
2. ODOP issues a decision within 60 days.
3. Upon rejection — judicial appeal to the competent administrative court — 14 days.
4. Cassation to the Supreme Administrative Court — 14 days, limited cassation grounds (APC Chapter 12).

Grounds for annulment

Most frequently accepted by courts:

• No intent — non-payment due to objective factors, not the manager’s wilful act.
• Violation of subsidiary nature — NRA failed to exhaust company assets before pursuing the manager.
• No capacity in the period of liability (e.g. removed from register).
• No causal link — liabilities uncollectible regardless of management action.
• Procedural violations in the audit.
• Limitation — 5/10 years under Art. 171 DOPK.

Limitation

Art. 19 DOPK liability is subject to the general limitation rules for public receivables (Art. 171 DOPK):

• 5-year ordinary limitation — from 1 January of the year following the year of due date. May be suspended and interrupted by proceedings.
• 10-year absolute limitation — from the same starting date, not extendable.

Limitation runs on the original company liability — not on the establishment of manager liability. Extinction by limitation of the underlying liability terminates Art. 19 liability as well. See our article on limitation before NRA.

SAC case law — key principles

The Supreme Administrative Court has developed consistent jurisprudence on Art. 19 DOPK. Core principles:

• Intent must be proven by the NRA. It is not presumed — NRA must adduce concrete evidence of wilful conduct.
• Subsidiarity — strictly enforced. Premature extension to the manager without attempting collection from the company leads to annulment.
• Business failure is not grounds. Market loss, pandemic bankruptcy, sector crisis — do not justify liability.
• Non-involvement in operations. A formal manager who does not make operational decisions bears no liability.
• Withheld-unpaid taxes — aggravating. VAT collected from clients but not remitted to NRA is nearly presumptive of intent.
• Assets to related parties. Transfer to spouse, subsidiary or relatives creates a presumption of intent unless arm’s-length terms and documentation are in place.

Preventive measures for managers

Preventive defence is most effective. Recommendations:

1. Timely payment of withheld taxes. VAT, PIT on payroll, social contributions — the “red line”. Non-remittance is the most common basis for Art. 19.
2. Document business decisions. General meeting minutes, justifications for related-party pricing.
3. Arm’s-length related-party transactions. Transfer pricing — documentation, comparables, independent valuations.
4. Timely insolvency filing. Art. 626 CA requires the manager to file for insolvency on insolvency — failure is grounds for Art. 627 CA liability.
5. Avoid personal expenses from company accounts. Personal use of company assets/funds is a “hidden dividend” and may trigger Art. 19.
6. Timely deregistration. When leaving the role — insist on prompt removal from the Commercial Register.
7. Document GM decisions. When GM directs actions that could trigger Art. 19, the manager may refuse or request written instruction.
8. Professional accountant and lawyer. Regular consultations — especially before asset transfers or material operational decisions.

When receiving an Art. 19 audit act

• Immediate legal consultation.
• Administrative appeal within 14 days.
• Motion to suspend enforcement with collateral/bank guarantee.
• Systematic gathering of no-intent evidence.
• Parallel defence against the original company audit act.

DOPK text at lex.bg. NRA information on personal-asset liability — nra.bg.

Frequently asked questions