New Guidance on Directors’ Personal Liability for Corporate Tax Debts in Poland

CJEU Judgments on the Liability of Company Directors

In 2025, the Court of Justice of the European Union (CJEU) delivered two judgments in cases C-277/24 (Adjak) and C-278/24 (Genzyński) concerning the liability of company directors for a company’s tax arrears.

Both rulings strengthened the procedural rights of directors, emphasizing the need for an individual assessment of fault, the right to an effective defense, and the limitation of automatic enforcement of tax liabilities.

Judgment in Case C-277/24 (Adjak)

This judgment was issued in response to a preliminary question from the Voivodeship Administrative Court in Wrocław, which was examining the case of a former company president who had been refused participation in the company’s tax proceedings regarding VAT settlements.

In Poland, members of management boards are jointly and severally liable for a company’s tax obligations incurred during the period they held office.

Such liability arises when tax irregularities are found, enforcement against the company’s assets proves ineffective, and the management board failed to file for bankruptcy within the statutory deadline.

One of the main issues for directors is that, in proceedings concerning joint and several liability, they have no procedural right to challenge the tax authority’s findings made in prior assessment proceedings against the company.

They also cannot participate in those proceedings as parties.

In its judgment, the CJEU held that refusing a person who may potentially be held jointly liable for a company’s tax debt participation in the company’s tax proceedings does not, in itself, breach EU law.

However, a violation of EU principles would occur if the director were denied the opportunity, in subsequent liability proceedings against them, to challenge the factual and legal findings made by the tax authority in the earlier proceedings against the company.

In other words, the CJEU emphasized that a company director must have an effective opportunity to challenge the findings concerning the company’s tax arrears, even if they were not a party to the original tax assessment proceedings.

Judgment in Case C-278/24 (Genzyński)

In the Genzyński case, the CJEU ruled that the national mechanism imposing joint and several liability on current or former company directors for tax debts incurred during their term of office is compatible with EU law.

However, the Court set out several key guidelines that must be observed when applying the national provisions on directors’ liability for corporate tax debts.

• Fault in failing to file for bankruptcy must be assessed individually; it cannot be presumed automatically from the fact of liability.

• Liability depends, in particular, on the director (current or former) being able to prove that the bankruptcy petition was filed in due time or that the failure to file was not attributable to their fault, provided that they can demonstrate that they exercised due diligence in managing the company’s affairs.

• The argument that the State Treasury (tax office) is the company’s only creditor cannot be relied upon as a defense by directors.

The judgment in C-278/24 (Genzyński) affects ongoing proceedings in which directors will now have the possibility to invoke due diligence in managing the company and justify the failure to file for bankruptcy as a valid defense.

This thus provides an additional means of protecting their rights in liability proceedings.

What Do the CJEU Rulings Change?

At this stage, no legislative amendments have been introduced.

However, in response to the CJEU rulings, the Minister of Finance and Economy issued on 29 August 2025 the General Interpretation No. DTS2.8012.5.2025, clarifying how Article 116 of the Polish Tax Ordinance (Ordynacja podatkowa) should be applied.

Under this provision, members of the management board of a capital company are jointly and subsidiarily liable with all their personal assets for the company’s tax arrears incurred during their term of office.

A director can be released from such liability if they:

• indicate company assets from which enforcement can cover the arrears, or

• prove that the bankruptcy petition was filed on time, or that the failure to file was not their fault.

The CJEU confirmed that the Polish provisions are consistent with EU law, provided they are interpreted correctly.

The key consequences for company directors are:

1. Right to challenge the tax authority’s findings regarding the company’s arrears – the director may contest factual and legal findings, though not the company’s own final decision.

2. Right of access to the company’s case file – limited only to the materials necessary for their defense in liability proceedings.

3. Right to demonstrate lack of fault in failing to file for bankruptcy – a director may be released from liability if they exercised due diligence and the failure was caused by objective obstacles.

What Does This Mean in Practice for Directors?

The interpretation emphasizes that a director is liable only to the extent that they had actual control over the company’s affairs.

The right of defense does not entail repeating the entire tax proceedings against the company — it concerns only challenging findings directly affecting the director’s liability.

The presumption of a director’s fault in relation to the company’s tax arrears remains strong but rebuttable — it is possible to avoid liability by proving that due diligence was exercised.

For Entrepreneurs and Company Directors, the New Interpretation Means:

• the need for careful documentation of management decisions and actions within the company,

• preparedness for potential personal financial liability for the company’s tax arrears,

• and the ability to actively exercise defense rights and raise objections in liability proceedings.

In practice, the interpretation increases clarity and legal certainty for company directors, outlining how to effectively defend themselves against liability for a company’s tax debts.