Liability of management board members for tax arrears of companies in Poland – key CJEU rulings
The Court of Justice of the European Union (CJEU) has once again addressed the issue of joint and several liability of management board members for tax arrears of companies in Poland. In its judgment of 30 April 2025 in case C-278/24 (Genzyński), the Court supplemented and expanded upon its earlier position expressed less than two months earlier – in the landmark ruling of 27 February 2025 in case C-277/24 (Adjak).
Together, these two rulings form a consistent line of case law that challenges key elements of Polish administrative and judicial practice regarding the liability of individuals who hold management positions. The CJEU emphasises not only the need to ensure genuine procedural safeguards, but also highlights that the liability of board members cannot be merely formalistic or automatic.
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Key issues in the Polish legal framework
The mechanism of joint and several liability of management board members – regulated in Article 116 of the Polish Tax Ordinance (Ordynacja podatkowa) – has long raised serious concerns in Poland.
In practice, board members may be held liable for the company’s tax debts in cases where:
- the company committed errors in its tax settlements,
- enforcement against the company’s assets proved wholly or partially ineffective,
- the board member failed to file for bankruptcy in a timely manner.
However, a key point of concern is that board members are not permitted to participate in the tax proceedings conducted against the company for the purpose of establishing its tax liabilities, nor can they challenge the findings made by the tax authorities – even though those findings form the basis of their own personal liability. The tax decision issued against the company becomes binding upon the board member as a prejudicial act, effectively depriving them of the right to a defence.
Furthermore, the current legal framework in Poland does not provide effective mechanisms to consider the good faith or due diligence of the board member. Liability is often imposed in an almost automatic manner, without any real analysis of their conduct or influence on the company’s financial position. Importantly, this liability is pecuniary in nature – it may involve the board member’s private assets. Additionally, Polish tax authorities often require that a bankruptcy petition be filed even in cases where this is legally impossible – for example, when the company has only a single creditor – which results in unequal treatment of board members based solely on the creditor structure of the company.
Preliminary questions referred to the CJEU
These legal gaps and formalistic practices prompted the Voivodship Administrative Court in Wrocław to refer preliminary questions to the CJEU in cases C-277/24 (Adjak) and C-278/24 (Genzyński). The questions primarily concerned the compatibility of the Polish model of liability with EU standards for the protection of individual rights – particularly the right to a defence and to equal treatment.
The Court raised concerns regarding the lack of genuine participation rights for board members, their inability to challenge the tax findings made against the company, and the excessively narrow and rigid conditions under which liability can be avoided. In response, the CJEU made it clear that the current Polish model requires reform, as it fails to provide board members with the procedural guarantees required by EU law.
CJEU Judgments
In the judgment of 27 February 2025 (C-277/24, Adjak), the CJEU found that the Polish provisions violate EU procedural standards by failing to guarantee board members the right to an effective defence. The Court stressed that a person facing personal liability for a company’s tax debt must be able to challenge the company’s tax assessment and have access to the relevant case files.
In the ruling of 30 April 2025 (C-278/24, Genzyński), the CJEU confirmed that the mechanism of joint and several liability for tax arrears does not, in itself, breach EU law. However, the Court emphasised that its application must take into account the individual circumstances of each board member. Liability may apply only in cases where enforcement against the company was unsuccessful. A board member must be allowed to defend themselves by showing that they filed for bankruptcy in due time or that the failure to do so was not due to their fault – particularly if they acted with due diligence in managing the company’s affairs. The CJEU also clarified that the fact that the State Treasury was the company’s sole creditor cannot, by itself, justify the failure to file for bankruptcy.
Together, these rulings establish a new interpretative standard which should guide both tax authorities and administrative courts, moving away from the previously prevailing overly formalistic approach.
What do these judgments mean for board members in Poland?
The CJEU’s judgments have practical significance for individuals serving on the management boards of Polish companies. Most importantly, they provide real tools for defending against tax liability in ongoing proceedings. Board members may now invoke not only their due diligence, but also demand access to the company’s tax case files and challenge previous determinations. As a result, they have an improved chance of avoiding personal liability, particularly if they can demonstrate that they acted in good faith and took responsible decisions within their role.
The judgments in the Adjak and Genzyński cases represent a significant step toward strengthening legal protections for board members in Poland. The CJEU not only highlighted systemic flaws in the current Polish practice, but also outlined specific standards that should be implemented into the national legal system. For business owners and executives, this means increased legal awareness and the need to closely monitor any proceedings involving management board liability. For Polish tax authorities and administrative courts, the rulings send a clear message: formalism cannot replace a fair, individualised assessment. Going forward, liability must not be imposed automatically but must be the result of a transparent and legally sound process that respects EU principles.
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