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Comments on ECJ Case C-278/24: Joint and several liability – Member of board of directors following resignation

A member of the management board has the right to defend himself – another important judgment on joint and several liability

  • Ruling Overview: The Court of Justice of the European Union (CJEU) affirmed that while Polish regulations on the joint and several liability of management board members for tax arrears are permissible under EU law, they must ensure that individuals have a genuine opportunity to defend their rights in legal proceedings.
  • Interpretation of Liability: The CJEU emphasized that management board members should be able to demonstrate due diligence in managing the company and show that any failure to file for bankruptcy was not their fault. The obligation to file for bankruptcy should only arise when insolvency is clear and permanent, rather than based solely on tax arrears.
  • Implications of the Ruling: This judgment allows for the resumption of previous proceedings before tax authorities and administrative courts, providing management board members with new defenses against joint liability. It signals a need for changes in the application of these regulations in Poland, following a similar ruling in the Adjak case earlier in 2025.

Source MDDP


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  • Joint and Several Liability for VAT Arrears: The taxpayer P.K. was held jointly and severally liable for VAT debts of E. Sp. z o.o., despite having resigned from the company. Polish law requires a timely insolvency application to avoid such liability, raising questions about the treatment of directors in cases with a sole creditor, specifically the public exchequer.
  • Court’s Interpretation of Liability Conditions: The European Court ruled that the requirement for a former director to file an insolvency application is permissible under EU law, stating that it does not conflict with the VAT Directive or principles of equal treatment and proportionality. The court emphasized that liability could be rebutted by demonstrating due diligence in managing the company’s affairs.
  • Key Legal Findings: The Court concluded that national law can hold a director jointly liable for a company’s VAT debts during their term, provided they can prove timely insolvency application or lack of fault in failing to file. The ruling clarified that simply claiming the company had no creditors other than the public exchequer does not exempt directors from liability, reinforcing the need for directors to demonstrate diligence.

Source KPMG


EU Court Rules on Directors’ Liability for Company VAT Debts Under Polish Law

  • The European Court of Justice examined Polish legislation regarding VAT debts of companies.
  • The court reviewed Article 273 of Directive 2006/112/EU.
  • National legislation can hold a board member responsible for VAT debts incurred during their term.
  • This responsibility applies if the company’s debt enforcement is unsuccessful.
  • Directors can avoid liability by proving due diligence in managing company affairs.
  • It is not enough to show the tax authority was the only creditor at the time of insolvency.

Source: eutekne.info


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