Responsibility of board members for tax liabilities of the company – general interpretation of the Minister of Finance and its consequences 

On 29th August 2025, the Minister of Finance and Economy published a general interpretation referring to the judgments of the Court of Justice of the European Union (CJEU) in cases C-277/24 (Adjak) and C-278/24 (Genzyński). These judgments addressed the interpretation of Polish provisions on the liability of board members for the tax obligations of companies in light of EU law. 

Previous legal framework 

Article 116 of the Tax Ordinance stipulates that when a capital company is in arrears with tax payments and its assets are insufficient to cover these arrears, the tax authorities can pursue the claims from individuals who were board members at the time the tax obligation arose. Liability can only be avoided in three situations: 

• if the assets of the company are indicated that can (to a significant extent) cover the company’s arrears;
• if the board member files a bankruptcy petition in a timely manner;
• if the board member demonstrates a lack of fault in failing to file bankruptcy petition. 

In itself, this regulation is not controversial. However, in practice, it often led to situations where former board members found themselves in a procedurally difficult position. Why did this happen? 

Limited opportunities to defend against allegations 

In proceeding determining the amount of the company’s tax liability, the company is represented by its current governing bodies. However, these proceedings often concern events from the past. 

As a result, it frequently happens that the individuals who were board members during the period under review are no longer part of the company’s management. Consequently, these former board members could not participate in the proceedings. Nevertheless, they remained liable for the company’s tax obligations as former board members. If the proceedings against the company concluded with a final decision, former board members were unable to challenge its findings afterward. However, liability could still be imposed on them, and the obligation could be enforced in the amount determined during the proceedings. 

Since former board members were no longer part of the company’s governing bodies, they also lacked access to the case files. This prevented them from obtaining information about the basis on which the liability they were held accountable for was determined. 

Due to the recurrence of such situations and taxpayers’ complaints, the issue was eventually brought before the CJEU. The Court ruled that while the provisions of the Tax Ordinance themselves do not violate EU standards, in certain situations, they effectively deprive former board members of the right to a defense, which is unacceptable. 

Presumption of board member’s fault 

Another issue concerned the possibility of avoiding liability in case of failure to submit a bankruptcy petition on time. As mentioned above, a board member can avoid liability by submitting such a petition or proving there was no fault in failing to do so. In practice, fault in relation to board members was often presumed, as who else could be responsible for poor management of the company if not the management board? 

According to the CJEU, however, lack of fault can be demonstrated not only by proving innocence but also by making it probable that objective circumstances prevented the submission of the petition. However, the CJEU emphasized that such case should be examined individually. 

What the general interpretation says 

Following the conclusions from the CJEU rulings, the Minister of Finance and Economy issued a general interpretation aimed at standardizing the application of the Tax Ordinance provisions. 

The Minister stated that the right to defense for board members should be understood more broadly than previously. Although proceedings against the company are separate from proceeding against a board member, the former board member should, under certain conditions, have the right to challenge the finding contained in the decision addressed to the company. These findings could be contested by the former board member in the proceedings against them, which represents a complete change in approach compared to the previous practice in such cases. 

The Minister also acknowledged that former board members should have access to the company’s case files, and that the presumption of guilt of the board member for improper management of the company, resulting in late submission of the bankruptcy petition, is rebuttable. Thus, the board member’s fault should not be assumed “automatically”. 

Summary 

The interpretation adjusts the interpretation of Article 116 of the Tax Ordinance to the case law of the CJEU. It is likely to contribute to greater protection of former board members from liability for the tax obligations of companies. However, it is important to note that a general interpretation is not the same as a change in the law but is merely a guideline for understanding the provisions of the Tax Ordinance. In the near future, it will probably lead to a change in the approach of tax authorities, but time will tell how much this will affect the way proceedings concerning board members’ liability are conducted.