by adminIn the first half of 2025, the Court of Justice of the European Union (CJEU) issued two rulings on Polish cases that provide guidance on the conditions under which the joint and several liability of a manager for a company’s VAT obligations may be engaged.
Background
Case C-277/24 (M.B. – Adjak) of 27 February 2025
A former manager seeks to participate in tax proceedings regarding the obligations of a company he managed, in order to protect his rights in potential proceedings against him personally. However, this is not permitted by Polish law.
Case C-278/24 (P.K.) of 30 April 2025
The chairman of the management board of a company was held jointly and severally liable after unsuccessful collection of the company’s VAT debts. He objects that even if he acted in good faith, Polish law does not allow him to be released from liability.
Question referred to the court
- Is it permissible to engage joint and several liability without proving fault or bad faith on the part of the manager?
- Is the right of defense violated if the manager cannot participate in the proceedings against the company whose debt may be transferred to him?
CJEU conclusion
It is not mandatory for the manager to participate in the tax proceedings against the company, as long as, in the proceedings against the manager himself, he has an effective opportunity to challenge the facts and obligations of the first proceedings.
There are no obstacles to legislation providing for criteria, the non-fulfilment of which entails joint and several liability of the manager, insofar as his right of defense is guaranteed.
Practical significance
These decisions reinforce the CJEU’s position that the liability of managers can be engaged under clear and predictable conditions, ensuring effective protection of their rights. The question of the balance between the state’s interest in collecting taxes and the protection of bona fide managers remains key for national jurisprudence.
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