A manufacturing company in the Silesia region received a tax authority decision holding its two former board members personally liable for the company's unpaid VAT arrears exceeding PLN 800,000. The board members had resigned over a year earlier. They believed their resignation protected them. It did not.
Under the Ordynacja podatkowa (Tax Ordinance), board members of a limited liability company may be held personally liable for the company's tax arrears if enforcement against the company proves ineffective. Liability attaches to the period during which a given person served on the board – not the date when arrears were assessed. A board member who fails to demonstrate that insolvency proceedings were filed on time, or that no fault attaches to the omission, faces full personal exposure to the outstanding tax debt.
This case study follows the matter from the initial tax authority decision through administrative appeal to final resolution. It illustrates how the statutory exculpation conditions work in practice, what documentary evidence matters most, and where board members most commonly lose their defence. Three transferable lessons close the analysis.
What was the background to the liability decision?
The company operated in the automotive supply chain. Over three years, it accumulated VAT arrears as its main customer delayed payments and cash flow deteriorated. The board filed for insolvency with the District Court (Sąd Rejonowy) in Katowice in the fourth year of operations. The National Court Register (Krajowy Rejestr Sądowy, KRS) recorded two board members as serving during the relevant VAT periods.
The tax authority – acting through the Silesia Tax Office (Śląski Urząd Skarbowy) – first attempted enforcement against the company's assets. Enforcement yielded less than PLN 12,000 against a total debt exceeding PLN 800,000. That shortfall triggered the subsidiary liability procedure under the Tax Ordinance. The authority issued separate decisions against each former board member for the full outstanding amount.
Both board members had resigned from the board approximately 14 months before the liability decisions were issued. One had resigned before the insolvency filing. The other had resigned after the filing but before the court declared insolvency. This distinction proved significant at the appeal stage.
The authority's position was straightforward: the arrears arose while both individuals served on the board, enforcement against the company failed, and neither had demonstrated that a timely insolvency filing had been made during their respective tenures. Our team was engaged after the first-instance decisions were issued.
How did we build the defence strategy?
Polish tax law provides three exculpation routes for board members facing personal liability. First: the board member filed for insolvency – or initiated court restructuring proceedings – at the proper time. Second: the failure to file was not the board member's fault. Third: the creditor could have satisfied the debt from assets over which the board member indicated a lien or charge. Each route requires specific documentary proof.
We secured a reduction of the assessed liability for a client in Silesia (winter 2025) by focusing on the precise timing of the insolvency filing relative to each board member's tenure. The first board member had resigned 30 days before the insolvency petition was filed. Under insolvency law, a filing is considered timely if made within 30 days of the company becoming insolvent. We obtained the company's management accounts, board minutes, and bank statements covering a 90-day window preceding the filing.
The evidence showed that the company's balance-sheet insolvency crystallised at a date falling within the first board member's tenure. However, the filing itself occurred after his resignation. The critical question was whether the 30-day filing window had already expired before he resigned – or whether it remained open. If the window remained open at the date of his resignation, he could not rely on the timely-filing defence personally.
For the second board member, the position was stronger. She had remained on the board through the filing date. The insolvency petition was lodged with the District Court within 28 days of the date on which the company's liabilities demonstrably exceeded its assets. That two-day margin was narrow – but it held. Her defence rested on the timely-filing ground, supported by audited accounts and a chronology of creditor demands.
What did the administrative process reveal?
The appeal was filed with the Tax Appeals Chamber (Izba Administracji Skarbowej) in Katowice within the statutory 14-day period. Two parallel tracks ran simultaneously: the administrative appeal for the second board member and a separate evidentiary challenge for the first.
The Appeals Chamber reduced the second board member's liability to zero. The timely insolvency filing, supported by court filing receipts and the audited balance sheet, satisfied the exculpation condition. The Chamber confirmed that once a valid insolvency petition is on file within the statutory window, the board member is released from personal tax liability for arrears accruing during that tenure.
The first board member's position required a different argument. We submitted that the precise date of balance-sheet insolvency could not be fixed with certainty on the basis of management accounts alone – the company's receivables included disputed amounts that a reasonable board would have treated as recoverable. That argument shifted the "proper time" for filing by approximately three weeks. Under that revised chronology, the 30-day window had not yet expired when he resigned.
We also obtained interim protection through the Regional Administrative Court (Wojewódzki Sąd Administracyjny, WSA) in Katowice, suspending enforcement of the first-instance decision pending appeal. That suspension prevented enforcement against the first board member's personal assets – including his family home – for the duration of the proceedings, which ran approximately 11 months.
The Appeals Chamber ultimately reduced the first board member's assessed liability from PLN 800,000 to PLN 140,000, covering only those VAT periods for which the evidentiary record clearly placed insolvency before his resignation. The residual amount is subject to further challenge at the WSA level.
What are the transferable lessons for board members?
Three lessons emerge from this matter. They apply to any board member of a Polish limited liability company operating under financial stress.
- Document the date of insolvency in real time. Management accounts, board resolutions noting financial condition, and external valuations of disputed receivables all fix the chronology that later determines whether a filing was timely. Reconstructing this record after the fact is far harder.
- Resignation does not reset the clock. A board member who resigns after insolvency has crystallised but before the filing deadline remains exposed for the period of their tenure. Resignation is not a liability shield – it is simply a fact that defines the temporal scope of exposure.
- Act within 30 days. Insolvency law sets a firm 30-day window from the moment the company becomes insolvent. Missing that window by even a few days forfeits the primary exculpation defence and shifts the argument to fault-based grounds, which are significantly harder to establish.
For foreign investors and group structures, the risk is compounded. A nominee board member who lacks access to the company's financial records cannot easily demonstrate timely awareness of insolvency. That gap in information flow can convert a procedural appointment into personal liability exceeding PLN 1m. Cross-border insolvency considerations add further complexity – for an analysis of how Polish and foreign insolvency proceedings interact, see our article on cross-border insolvency involving Poland and Sweden.
Board members in corporate groups face an additional dimension. Parent-company pressure to delay insolvency filings – to protect intercompany receivables or ongoing contracts – can place individual directors in direct conflict with their personal legal obligations. The liability under the Tax Ordinance does not follow the corporate group; it follows the individual. For a broader view of how liability flows within Polish corporate structures, see our analysis of subsidiary liability in Polish corporate groups.
One further point deserves attention. The Tax Ordinance liability procedure runs independently of any criminal or white-collar exposure. A board member who is also a signatory to VAT returns for the relevant periods may face parallel proceedings before the fiscal penal authorities. Those proceedings operate on different evidentiary standards and different timelines. Managing both tracks simultaneously – without allowing admissions in one to prejudice the other – requires careful coordination. For completeness, trade secret protection strategies under Polish law illustrate how information governance intersects with legal risk management more broadly.
We assisted a client in Małopolska (spring 2025) in coordinating exactly this dual-track defence, securing a stay of fiscal penal proceedings pending the outcome of the administrative appeal on personal tax liability. The two proceedings were resolved in sequence, with the administrative outcome informing the penal authority's assessment of culpability.
Specific situations require specific assessments. If your company is accumulating tax arrears, or if you are a board member who has recently resigned from a company in financial difficulty, the window for protective action may be shorter than you expect.
To receive an expert assessment of your exposure under the Tax Ordinance liability framework, contact info@kordeckipartners.com.
Frequently asked questions
Q: Does a board member's resignation before the tax arrears were formally assessed protect them from liability?
A: No. Liability under the Tax Ordinance attaches to the period during which the individual served on the board – not the date of the formal assessment decision. A board member who resigned two years before the decision was issued may still be fully liable if the arrears accrued during their tenure and enforcement against the company has failed. The timing of resignation is relevant only to the scope of the debt, not to whether liability arises at all.
Q: How long does the administrative appeal process typically take?
A: An appeal to the Tax Appeals Chamber (Izba Administracji Skarbowej) typically takes between three and nine months from the date of filing. If the matter proceeds to the Regional Administrative Court (WSA), total proceedings can extend to 18–24 months. Interim suspension of enforcement can be obtained at the WSA stage, preventing enforcement against personal assets during that period. Costs at the administrative level are modest; court proceedings involve standard administrative court fees.
Q: Is it a common misconception that filing for insolvency automatically eliminates board member liability?
A: Yes. Filing for insolvency eliminates liability only if the filing was made at the proper time – within 30 days of the company becoming insolvent. A late filing, even by a matter of days, does not satisfy the exculpation condition. The board member must then argue that the delay was not their fault, which requires demonstrating a specific and credible reason why timely filing was impossible. Courts and tax authorities apply that standard strictly.
KORDECKI & Partners is a law firm based in Warsaw and Krakow, advising business clients across 30 jurisdictions. Our team combines expertise in Polish and international law with a practical approach to restructuring, insolvency defence, and white-collar matters. We work with Polish entrepreneurs, foreign investors, and in-house legal teams. To discuss your situation, contact info@kordeckipartners.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. KORDECKI & Partners assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@kordeckipartners.com.