Your OÜ (a private limited company) has a tax debt. Could this put your own apartment at risk? Estonia’s Supreme Court (Riigikohus) has confirmed that, in certain circumstances, a court may authorise restrictions on the disposal of a board member’s property before a decision on their personal liability has been made.
The actual case concerned an apartment owned by two board members and a company’s suspected tax debt of at least €63,100. We explain why the court allowed the restriction, when personal liability for an OÜ’s taxes arises and what business owners should check in advance.
Why the tax authority sought to restrict the disposal of an apartment
On 1 October 2026, Estonia’s Supreme Court considered case No. 3-25-3867. Raamatupidaja.ee reported on the ruling on 5 November.
Two people were members of the management board of an OÜ which, according to the tax authority, had failed to declare €322,504 in revenue from its parking business for 2023. The authority also identified concealed cash revenue and payments unrelated to the company’s business. The suspected tax debt amounted to at least €63,100.
The company had no assets from which the debt could be recovered. The Estonian Tax and Customs Board (EMTA) therefore asked the court to restrict the disposal of an apartment jointly owned by the two board members.
The measure was an entry prohibiting disposal in the land register (käsutamise keelumärge). While it remains in force, the owners cannot sell, give away or transfer ownership of the apartment.
Tallinn Administrative Court initially rejected the tax authority’s application, finding its arguments insufficiently substantiated. The circuit court then authorised the restriction, and the Supreme Court upheld it while clarifying which circumstances must be considered in such a decision.
At the time of the circuit court’s decision, the tax authority had not yet determined the company’s final tax debt. EMTA issued its tax assessment later, on 27 January 2026.
The tax authority began recovering the debt from the company in March, but by the end of April had collected only €160.
The key point of the Supreme Court’s ruling: a court may authorise temporary restrictions on a board member’s property even before the company’s tax debt has been assessed. However, the measure requires specific justification and does not mean that the person has already been found personally liable for the debt.
When a board member is personally liable for an OÜ’s tax debt
If an OÜ has a tax debt, it must be paid from the company’s funds and assets. As a general rule, the owner’s and board members’ personal funds, apartments and other property are not used to pay the company’s debt.
The law nevertheless provides an exception. Under section 40 of Estonia’s Taxation Act (Maksukorralduse seadus, MKS), a board member may be jointly and severally liable for a company’s tax debt if they intentionally or through gross negligence breached their duties and that breach caused the taxes to go unpaid.
To recover the debt from a board member, EMTA issues a separate liability decision (vastutusotsus). As a general rule, this is possible if recovery from the company itself has been unsuccessful for three months or the company has been declared bankrupt.
The existence of a tax debt, even a large one, does not by itself establish a board member’s personal liability. The nature of the breach, its consequences and the board member’s own actions matter. Filing returns on time is therefore not enough: you also need to understand how the accountant records the company’s transactions.
Why the court allowed restrictions on a board member’s assets before a liability decision
Tax audits and disputes can last for months. During that time, an apartment could be sold, a car transferred to someone else or assets otherwise disposed of.
EMTA may therefore ask the administrative court to authorise a restriction in advance to preserve the possibility of recovering the debt in the future. This is a temporary measure: at this stage the tax authority is not yet entitled to recover the debt from the board member’s assets.
The Supreme Court stressed that such a restriction requires particularly compelling grounds. Until the tax authority has determined the company’s final tax debt, it remains uncertain whether the board member will become personally liable. EMTA must therefore explain to the court why the audit cannot be completed first and why the restriction is needed immediately.
Although the tax authority did not separately explain why the prohibition was needed before the audit was completed, the Supreme Court upheld it. The court considered several circumstances:
- The suspected tax debt amounted to at least €63,100.
- The company had no assets from which the debt could be paid.
- The tax audit report had already been prepared.
- The apartment was mortgaged to a bank for €191,000 and, according to EMTA’s estimate, was worth between €163,000 and €196,000.
- The company’s tax assessment was issued shortly after the court’s authorisation.
In the Supreme Court’s view, these circumstances, taken together, justified keeping the prohibition in place despite shortcomings in the tax authority’s reasoning.
How to protect a board member’s personal assets
An OÜ’s tax debt does not in itself mean that a board member is liable with their personal assets. The risk arises if the board member breaches their duties and the company cannot pay the debt. It is therefore important to monitor timely tax returns and payments. Regular support from an accountant helps identify accounting errors before they lead to debt.
If the company already has a tax debt and insufficient funds to pay it, it can apply to EMTA for payment in instalments over 2 to 24 months. The tax authority decides whether to grant the application.
For more on how tax debt grows, when the tax authority can freeze a bank account and how to apply for payment in instalments, read “Company tax debt in Estonia: consequences and ways to resolve it”.
Important: a board member may learn about a restriction on the disposal of their property only after the prohibition has been entered in the land register. The court may allow its order to be enforced before serving it on the person concerned. The order can be appealed, but deadlines apply. Obtain the court order and contact a lawyer as soon as possible.
Accounting services in Estonia: how to reduce an OÜ’s tax risks
Tax problems do not always begin with a large debt. The first signs are often visible earlier: revenue does not match the returns, expenses are unsupported by documents or payments to the owner are incorrectly recorded. Regular accounting checks help identify and correct these discrepancies before the situation becomes more difficult.
Finance PRO has provided accounting services in Estonia since 1998. We will review your OÜ’s accounts and tax returns, identify discrepancies and help prepare corrections.
If the company already has a tax debt, an experienced accountant can help clarify how the debt was calculated and prepare information for an instalment application. Court disputes and questions of personal liability require a lawyer’s involvement.
Do you have a tax debt or an ongoing EMTA audit? We will review the accounts and explain which issues can be addressed through accounting support. The initial assessment of your situation is free.
Phone: +372 5366 6674
Email: info@fpro.ee
Learn more about our accounting services in Estonia.
Read also
Information current as of 6 November 2026. This article is for information only and does not replace individual tax or legal advice.
International Accounting & Tax Expert
Order a paid consultation
By clicking the button, you agree to the Privacy Policy.
Your personal data will not be disclosed to third parties
