# BFH on Liability for VAT After Insolvency

> The BFH denies the insolvent debtor’s liability with non-insolvency assets for VAT arising from the administrator’s acts.

Source: https://www.mtrlegal.com/en/bfh-on-liability-for-vat-after-insolvency/ · Language: en · Updated: 2026-10-25

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**[BFH, Beschluss vom 6. Oktober](https://www.bundesfinanzhof.de/de/entscheidung/entscheidungen-online/detail/STRE202650171/) 2026 – IX B 40/26**: The Bundesfinanzhof (BFH, Federal Fiscal Court) dismissed the appeal lodged by the Finanzamt (tax office) against the Finanzgericht Düsseldorf’s refusal to allow an appeal on points of law. At the center of the case was the question of whether an insolvent debtor, after termination of the insolvency proceedings pursuant to § 211 InsO (German Insolvency Code), must be liable with assets not subject to the insolvency estate for VAT liabilities that arose as liabilities of the insolvency estate solely as a result of acts by the insolvency administrator. The decision is recorded as a decision of the IXth Senate not intended for official publication and was published online on 22 October 2026.

## Limited residual liability for liabilities of the insolvency estate

The BFH confirmed that the legal question raised by the Finanzamt does not require further clarification in appeal proceedings on points of law. According to already settled case law, liability of the insolvent debtor with assets not subject to the insolvency estate during the insolvency proceedings is out of the question if VAT liabilities arise as liabilities of the insolvency estate solely due to acts by the insolvency administrator.

According to the decision, this limitation of liability also remains decisive where the insolvency proceedings have been terminated after notification of insufficiency of the insolvency estate pursuant to § 211 InsO. The BFH thus relied on the existing line of supreme court case law and saw no reason to allow an appeal on points of law due to fundamental significance.

### Starting point of the proceedings

The proceedings were preceded by a judgment of the Finanzgericht Düsseldorf (Düsseldorf Fiscal Court) of 23 April 2026 – 11 K 548/22 AO. The defendant and appellant, the Finanzamt, challenged the refusal to allow an appeal on points of law. The appeal was unsuccessful.

The Finanzamt considered it to be of fundamental significance whether the insolvent debtor may rely on a defense of limited liability under § 80 Abs. 1 InsO. This referred to tax claims that had been established after the opening of the insolvency proceedings through acts by the insolvency administrator and had not been settled after the insolvency proceedings were terminated pursuant to § 211 InsO.

## No admission of an appeal on points of law due to fundamental significance

An appeal on points of law must be allowed under § 115 Abs. 2 Nr. 1 FGO (German Fiscal Court Code) if a legal question material to the decision has significance beyond the individual case, requires clarification, and can be clarified in the intended appeal proceedings. The BFH denied that these requirements were met.

In the court’s view, the relevant principles had already been sufficiently clarified by the case law of the BFH and the Bundesgerichtshof (BGH, Federal Court of Justice). Liabilities of the insolvency estate are indeed not covered by the discharge of residual debt under § 301 Abs. 1 InsO. However, it does not follow from this that the insolvent debtor is liable with assets not subject to the insolvency estate for VAT liabilities that are exclusively attributable to acts by the insolvency administrator.

### Continuation of the line on § 301 InsO and § 211 InsO

The BFH referred in particular to its judgment of 14 May 2025 – XI R 23/22. This decision bears the official title “On discharge of residual debt pursuant to § 301 InsO and on the debtor’s limited residual liability for VAT liabilities after termination of the insolvency proceedings pursuant to § 211 InsO”.

In this leading decision, the BFH had stated that the limitation of liability for VAT liabilities continues to have effect if the insolvency proceedings are terminated after notification of insufficiency of the insolvency estate and the insolvent debtor has been granted discharge of residual debt. The [Beschluss IX B 40/26](https://www.rechtsprechung-im-internet.de/jportal/portal/page/bsjrsprod?feed=bsjrs-bfh&showdoccase=1&paramfromHL=true&doc.id=jb-STRE202650171#focuspoint) follows this case law without expanding it substantively.

## Distinction from income tax liabilities in the realization of estate assets

The BFH also refused to allow an appeal on points of law to ensure uniform case law under § 115 Abs. 2 Nr. 2 Alternative 2 FGO. The Finanzamt had relied on a decision which, in its view, diverged from the present case. However, the BFH did not see the same or a comparable set of facts.

The cited decision of 28 November 2017 – VII R 1/16 concerned income tax that had arisen through the realization of assets of the insolvency estate in insolvency proceedings. In such a realization, hidden reserves or hidden liabilities may be uncovered that were already embedded in the debtor’s assets before or at the time the insolvency proceedings were opened.

### VAT is linked to the individual transaction

According to the BFH’s reasoning, the VAT relevant in the proceedings IX B 40/26 differs from this. It relates to the individual transaction, as follows from § 1 Abs. 1 UStG (German VAT Act). According to the decision, the inclusion of hidden reserves embedded in business assets is alien to it.

The BFH therefore saw no divergence that would have required a decision to preserve legal uniformity. The requirements for admission of an appeal on points of law were not met in this respect either.

## Significance of the cited leading decision XI R 23/22

The decision XI R 23/22 cited by the IXth Senate likewise concerned VAT liabilities in the context of insolvency law. The lower court in that case was the Finanzgericht Düsseldorf with its judgment of 13 July 2022 – 4 K 1280/21 AO, meaning a different proceeding from the lower-court case 11 K 548/22 AO referred to in Beschluss IX B 40/26.

In the proceedings XI R 23/22, the insolvency administrator had continued the business and had already notified impending insufficiency of the insolvency estate in September 2008. The matter in dispute concerned VAT liabilities for the years 2008 to 2010, including interest and late-payment surcharges.

There, the BFH clarified, among other things, that a tax may have been paid without legal basis if it is paid under protest and its assertion is barred by a permanent defense. In such a case, a refund claim under § 37 Abs. 2 AO may be considered because residual liability is limited to the insolvency estate.

## Key statements of Beschluss IX B 40/26

The decision can be summarized in several points:

- Liabilities of the insolvency estate are not covered by the discharge of residual debt under § 301 Abs. 1 InsO.
- VAT liabilities as liabilities of the insolvency estate do not result in liability of the insolvent debtor with assets not subject to the insolvency estate if they are based solely on acts by the insolvency administrator.
- This limitation of liability also applies after termination of the insolvency proceedings pursuant to § 211 InsO following notification of insufficiency of the insolvency estate.
- The BFH denied fundamental significance within the meaning of § 115 Abs. 2 Nr. 1 FGO because the legal question has already been clarified.
- In the BFH’s view, there was no divergence from the case law on income tax in the realization of estate assets.

## Costs decision against the Finanzamt

Since the appeal against the refusal to allow an appeal on points of law was unfounded, the BFH dismissed it. The Finanzamt must bear the costs of the appeal proceedings. The basis for this is § 135 Abs. 2 FGO.

For companies, investors and high-net-worth individuals, the distinction between liabilities of the insolvency estate, discharge of residual debt and limited residual liability can be of considerable significance. MTR Legal Rechtsanwälte advises clients on insolvency-law issues and on the classification of tax claims in the insolvency context. Further information can be found under [Legal advice in insolvency law](https://www.mtrlegal.com/rechtsberatung/gesellschaftsrecht/restrukturierung-insolvenz/).

ECLI:DE:BFH:2026:B.061026.IXB40.26.0