A member of the management board may defend themselves against the Polish tax authorities – general interpretation by the Minister of Finance
A new general interpretation of the Polish Minister of Finance and Economy (DTS2.8012.5.2025) clarifies the rules for applying Article 116 of the Tax Ordinance following the CJEU judgments in the Adjak and Genzyński cases. Board members gain broader rights of defence – they may challenge the basis for the company’s arrears and obtain access to files. The interpretation confirms that the assessment of due diligence is individual in nature and must be carried out within the framework set out in Article 116 of the Tax Ordinance and CJEU standards (right of defence, proportionality).
In this article:
Rules governing the liability of management board members for tax arrears
In Poland, the rules governing the liability of management board members for tax arrears of capital companies are set out in Article 116 of the Tax Ordinance. This provision stipulates that if enforcement against the company’s assets proves ineffective, its management board members may be jointly and severally liable with all their assets for the tax arrears incurred. This liability covers obligations whose payment deadline expired during their term of office.
At the same time, the Tax Ordinance provides grounds for exemption from this liability. A member of the management board is not liable if they can prove that:
- a petition for bankruptcy was filed in a timely manner or restructuring proceedings were opened,
- the failure to file for bankruptcy was not their fault, or
- they indicated the company’s assets from which enforcement could satisfy a significant part of the arrears.
In practice, this provision has raised numerous doubts for years. Polish tax authorities have applied it rigorously, assuming the guilt of a management board member in advance and limiting their defence options. In many cases, a board member had no real opportunity to challenge the findings regarding tax arrears because he or she was not a party to the assessment proceedings against the company. As a result, decisions issued against the company were often treated as directly determining the liability of the board member, which effectively limited his or her right of defence. Currently, the interpretation clearly prohibits treating such a decision as a precedent in proceedings against a natural person.
Case law background – CJEU judgments in the Adjak and Genzyński cases concerning the liability of management board members
In the context of the application of Article 116 of the Tax Ordinance, doubts have arisen for years as to whether a management board member has a real right of defence in proceedings concerning his liability and how the authorities should assess his guilt in failing to file for bankruptcy. The practice of the tax authorities has so far been one-sided – a decision issued against a company automatically determined the liability of a management board member, without the possibility of challenging its factual and legal basis.
Against this background, two key judgments of the Court of Justice of the European Union were handed down:
- C-277/24 (Adjak) of 27 February 2025 – concerning the right of a management board member to challenge the findings of the tax authority regarding the existence and amount of the company’s arrears;
- C-278/24 (Genzyński) of 30 April 2025 – concerning the rules for attributing liability in the context of a management board member’s fault in failing to file for bankruptcy.
The CJEU confirmed that European Union law does not preclude the construction of a director’s liability under Article 116 of the Tax Ordinance, provided that its application ensures a real possibility of defence.
This means that a member of the management board should have the right to:
- challenge the factual and legal findings of the tax authority,
- obtain access to the files of the proceedings conducted against the company to the extent necessary for defence,
- prove that he or she is not at fault for not filing for bankruptcy if he or she exercised due diligence in conducting the company’s affairs.
The conclusions drawn from these rulings determined the need to change the existing practice of the authorities and became a direct impetus for the Minister of Finance and Economy to issue a general interpretation.
More on the Adjak and Genzyński judgments in the article: Liability of management board members for tax arrears of companies in Poland – key CJEU rulings.
General interpretation by the Minister of Finance in Poland – new rules for applying Article 116 of the Tax Ordinance
In response to the CJEU judgments of 2025, on 29 August 2025 the Minister of Finance and Economy issued a general interpretation (No. DTS2.8012.5.2025) aimed at ensuring the uniform application of Article 116 of the Tax Ordinance by tax authorities. This document specifies how the right of a management board member to defend himself in proceedings concerning his liability for the company’s tax arrears should be understood.
Key aspects of the general interpretation
The interpretation addresses three key issues:
1. The right of a management board member to challenge the findings of the Polish tax authority
The interpretation clearly states that a decision issued against a company does not determine the liability of a management board member, even if it has been upheld by an administrative court. It may constitute evidence in the case, but it is not binding on the tax authority when assessing the liability of a natural person.
A management board member has the right, as part of their right of defence, to challenge the factual and legal findings made by the tax authority against the company, which the authority refers to in proceedings concerning their liability. This right also applies when the company’s liability arises from a tax return.
At the same time, the interpretation indicates that this right is not unconditional. It cannot be exercised by members of the management board who have already had a real opportunity to present their arguments, e.g. who held a position during the assessment proceedings against the company or at the time of its tax return. In such cases, the authority may consider that the management board member had the opportunity to comment on the findings and waived it. In other situations, the right to defence remains fully preserved.
2. Right of access to files relating to proceedings against the company
The right of a management board member to access files relating to proceedings against the company is closely linked to the right of defence and complements it. Access to the files is not absolute – it should be limited to the extent necessary to challenge the factual and legal findings that affect the determination of the existence and amount of the tax liability for which the management board member is to be held liable.
In practice, this means that a management board member may only request access to those documents that are necessary to prepare their defence. At the same time, the tax authorities should protect the rights of the company and third parties, in particular trade secrets.
If the arrears result solely from a tax return (without any verification/control activities), access may in practice be limited to the tax return itself. However, if the tax return was preceded by verification activities, a tax or customs and fiscal audit, a member of the management board may request access to the relevant files of these activities to the extent necessary to prepare their defence.
The interpretation emphasises that making the files available to this extent does not violate tax secrecy, as it results directly from EU law. The tax authorities are obliged to ensure the effectiveness of this law through a pro-EU interpretation of Polish tax law.
3. Possibility of exemption from liability by proving lack of fault
Article 116 of the Tax Ordinance is based on the presumption of fault on the part of a management board member in the creation of the company’s tax arrears. This means that, as a rule, it is assumed that a management board member is liable for the liabilities incurred, unless he or she proves otherwise. However, this presumption is rebuttable – it can be refuted by presenting relevant evidence.
A management board member may be released from liability if they prove that:
- the bankruptcy petition was filed in a timely manner, or
- the failure to file the petition was not their fault, despite exercising due diligence.
In assessing the absence of fault, it is crucial whether the board member acted with due diligence – i.e. took actions appropriate to the company’s situation, responded to its deteriorating financial condition, attempted to restructure its operations or sought ways to avoid insolvency. It is not enough to simply refer to economic difficulties – it is necessary to demonstrate that there were objective obstacles that could not be overcome despite the proper performance of management duties.
The interpretation also emphasises that it is irrelevant whether the bankruptcy petition itself was successful – what is important is that it was filed in a timely manner and in a way that confirms that the board member acted in good faith and with due diligence in protecting the company’s interests.
The general interpretation confirms that the presented principles apply not only to taxes harmonised within the European Union (such as VAT), but also to all other tax liabilities. This means that Polish tax authorities should apply a uniform, pro-EU interpretation of Article 116 of the Tax Ordinance in each case.
From the point of view of board members, the interpretation provides an important clarification of current practice. Although it broadens the scope of the right of defence, it does not change the fundamental burden of proof – it is still up to the board member to prove that they are not at fault and that they have exercised due diligence in conducting the company’s affairs. In practice, this requires careful documentation of the actions taken, especially in situations of insolvency risk, and ongoing monitoring of the company’s tax proceedings.
What does it mean in practice for board members in Poland
The general interpretation of 29 August 2025 significantly changes the way tax authorities should conduct proceedings against board members. It does not introduce new regulations, but sets a new standard for their application – in line with CJEU case law and the principle of the right of defence.
For board members, this has several practical consequences:
- Greater defence options.
- Right to information.
- Greater emphasis on documenting actions.
- The significance of the date of filing for bankruptcy.
A board member can now more effectively challenge the tax authorities’ findings regarding the company’s arrears. The authorities can no longer treat the findings in a decision against the company as a precedent for a board member – they must allow the board member’s evidence and arguments regarding the existence and amount of the arrears. In practice, however, the scope of this right may be interpreted differently. If the authority considers that a board member has already had the opportunity to take a position, it may limit their rights to challenge the same findings again.
Allowing access to the files of proceedings against the company enables a member of the management board to prepare effectively for their defence. However, access to documents will still be limited – only to the extent that it is relevant to their liability. The lack of precise criteria may lead to an overly narrow interpretation of this right, so it is important that the request for access to the files be specific and well-reasoned.
It is still up to the board member to prove that they acted with due diligence. In practice, this means the need to document decisions and actions taken in connection with the company’s deteriorating situation on an ongoing basis, e.g. financial analyses, board resolutions, restructuring attempts or contacts with advisors. The lack of clear guidance on how the authorities will assess due diligence may lead to discrepancies in practice and the maintenance of the current restrictive approach. The interpretation does not specify the list of evidence confirming due diligence, therefore it is recommended to document all management actions taken in situations of liquidity risk.
The key factor is the moment when the management board filed (or should have filed) for bankruptcy. Acting too late will still be considered a sign of fault, even if the company’s financial situation was difficult to assess. At the same time, the interpretation does not define ‘the right time’ in detail, but refers to an objective assessment of the circumstances of the case (including the actual moment of insolvency and the deadlines resulting from the regulations).
The general interpretation does not therefore abolish the liability of board members, but makes it more transparent and better aligned with EU standards. At the same time, it leaves tax authorities with a wide margin of discretion in assessing the circumstances of a particular case, which is why board members should remain vigilant and actively exercise their rights.
The general interpretation of the Polish Minister of Finance of 29 August 2025 introduces a new standard for the application of Article 116 of the Tax Ordinance, adapting it to the principles resulting from CJEU rulings. For the first time, it has been explicitly stated that the liability of a management board member cannot be automatically adjudicated, and that the tax authorities must ensure that they have a real right of defence.
As a result, management board members in Poland have gained broader opportunities to challenge the findings of the authorities and inspect the case files, which allows them to actively participate in the process of clarifying the case. At the same time, the principle that it is the responsibility of the board member to prove that they acted with due diligence or that they are not at fault for not filing for bankruptcy has been maintained.
In practice, this interpretation does not weaken the liability of management board members, but makes it more balanced and consistent with the principles of fair conduct. For companies, this means that they must pay greater attention to the transparency of management activities and the proper documentation of decisions taken in situations of financial risk.
Legal basis:
General Interpretation No. DTS2.8012.5.2025 of the Minister of Finance and Economy of 29 August 2025 on the application of Article 116 of the – Tax Ordinance in connection with the judgments of the Court of Justice of the European Union of 27 February 2025 in case C-277/24 (Adjak) and of 30 April 2025 in case C-278/24 (Genzyński)
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