Landmark Ruling on Board Members’ Liability for Tax Debts

Judgment in the Adjak Case

On 22 April 2025, an important judgement of the Court of Justice of the European Union (CJEU) dated 27 February 2025 was published in case C-277/24 (Adjak), marking a significant shift in the approach to board members’ liability for a company’s tax debts. The preliminary ruling was requested by the Provincial Administrative Court in Wrocław and concerned the compatibility of Polish regulations with EU law.

Violation of EU Standards

The CJEU ruled that Polish provisions, which automatically assign liability for a company’s tax debts to its board members, violate the rights of the defence guaranteed by the EU.

Specifically, the court criticised:

• denying board members access to relevant case files;
• preventing board members from challenging the tax authority’s findings.

According to the CJEU, these practices violate the rights to be heard and to access case files, both of which are essential components of the rights of the defence.

New Rights for Board Members

The ruling strengthens board members’ position in proceedings concerning their liability for a company’s tax debts. From now on, they will be able to:

• access the relevant case files;
• present their own evidence and arguments;
• effectively challenge the tax authority’s decisions.

This is a fundamental change from the previous practice of tax authorities, which often denied board members access to documentation.

Broader Scope of Application

Although the Adjak case concerned VAT, its implications may extend to other taxes, including corporate income tax, excise duties, and property tax – anywhere board members face joint and several liability.

Practical Challenges and Legal Reform

Until national legislation is amended, tax authorities and courts must apply the CJEU ruling directly. However, this could face resistance from officials unwilling to revise past decisions. In many cases, effectively asserting rights will require the support of experienced legal representatives.

What’s Next?

The Adjak case is just the beginning. On 30 April 2025, the CJEU is set to issue a judgment in case C-278/24 (Genzyński), which also concerns board members’ liability for tax debts. Further groundbreaking rulings are expected.

Key Takeaways

The CJEU’s judgment in the Adjak case:

• establishes new standards of protection for board members;
• guarantees the rights of the defence and access to case files;
• allows for the reopening of unfair proceedings.

This is a significant step toward a more just tax system that aligns with EU standards.

Key Deadlines and Legal Support

The publication of the CJEU judgment in the Adjak case means that the time limits for reopening past cases have now started to run.

• Applications to reopen tax proceedings must be submitted by 22 May 2025.
• Applications to reopen administrative court proceedings must be filed by 22 July 2025.

In both cases, it is up to the board member to initiate the process aimed at eliminating the unfavourable ruling from legal circulation. However, simply submitting an application is not enough to successfully navigate these proceedings. Legal representatives will play a crucial role in demonstrating that the conditions set out in the judgment are met.