A Warsaw-based technology company receives a notice from the National Revenue Administration (Krajowa Administracja Skarbowa, KAS) announcing a fiscal criminal investigation. The board is given 48 hours to produce documentation. No one on the team has faced this before. The managing director's first instinct is to call the company's regular commercial lawyer – who has no experience in fiscal criminal proceedings.
Under Polish fiscal criminal law – governed by the Kodeks karny skarbowy (Fiscal Penal Code, KKS) – board members bear personal criminal liability for tax offences committed in connection with company affairs. Liability attaches to individuals who manage the company's tax affairs, sign declarations, or exercise actual control over financial decisions, regardless of formal title. Penalties range from fines to deprivation of liberty of up to 5 years for the most serious offences, and proceedings can run in parallel with civil tax assessments.
This page explains the KKS framework as it applies to board members: how liability arises, which procedural instruments are available, where defence strategies typically fail, and what foreign-parent companies must understand when their Polish subsidiary faces a KAS inquiry. A self-assessment checklist at the close helps boards evaluate their current exposure before a notice arrives.
How does personal liability arise under the KKS for board members?
Polish fiscal criminal law does not require proof of personal enrichment. It requires proof that the accused managed tax affairs, had decision-making authority, and that a fiscal offence occurred. The National Revenue Administration (KAS), the prosecutor, and the fiscal court each play distinct roles. The KAS conducts the initial investigation; the district prosecutor may take over; the sąd rejonowy (district court) adjudicates. Proceedings move faster than ordinary criminal cases – preparation and defence must begin immediately.
Two categories of offence matter most for board members. A przestępstwo skarbowe (fiscal criminal offence) carries the heaviest consequences, including imprisonment. A wykroczenie skarbowe (fiscal petty offence) results in fines only. The boundary between the two is monetary: offences involving amounts below twice the minimum wage threshold qualify as petty offences. Above that threshold, criminal offence rules apply. In 2026, the dividing line sits at approximately PLN 9,200 – a figure boards should internalise.
Liability is not limited to the formal CEO. Under the KKS, any person who "handles financial affairs" of a legal entity may be prosecuted. (This is the provision that catches deputy directors, CFOs, and tax managers most frequently.) Courts look at who signed VAT declarations, who authorised payments, and who corresponded with the tax authority. A board member who delegated tax matters entirely – but signed declarations without review – remains exposed.
- Signing VAT or CIT returns without verifying underlying data
- Authorising payments that reduce the tax base without proper documentation
- Failing to register for VAT when turnover thresholds are met
- Issuing or accepting invoices that do not reflect real transactions
- Failing to remit withheld tax (WHT) within statutory deadlines
The KKS also operates alongside restructuring proceedings. A board that files for restructuring under the Prawo restrukturyzacyjne (Restructuring Law) does not thereby extinguish criminal liability for past periods. Understanding how insolvency and criminal exposure interact is essential – see our analysis of cross-border insolvency involving Poland and the Czech Republic for context on parallel proceedings.
What procedural instruments does the KKS defence toolkit include?
The KKS defence toolkit is broader than most board members realise. Three instruments stand out: voluntary disclosure (czynny żal), conditional discontinuation of proceedings, and the separation of criminal proceedings from tax reassessment. Used correctly and in sequence, they can eliminate criminal liability entirely, reduce charges to petty offence level, or at minimum contain the personal exposure of individual board members while the company contests the underlying tax assessment.
Voluntary disclosure – czynny żal – is the single most powerful instrument available. A board member who notifies KAS of a fiscal offence before the authority becomes aware of it, and who pays the outstanding tax with interest, is shielded from criminal prosecution. The notice must be filed before KAS formally documents its suspicion. Timing is everything: a filing made after KAS sends the first inquiry letter is too late. We secured a withdrawal of KKS charges for a manufacturing client in the Mazowieckie region (autumn 2025) by filing voluntary disclosure within 36 hours of the client identifying an undisclosed VAT adjustment.
Conditional discontinuation of proceedings (warunkowe umorzenie postępowania) applies where guilt is not in serious doubt but the social harm is minor. The court may discontinue proceedings for a probationary period of up to 2 years, imposing conditions such as payment of a compensatory sum. No conviction is entered. This matters enormously for board members who hold directorships in multiple companies: a KKS conviction triggers automatic disqualification from board service under the Commercial Companies Code (KSH).
A third instrument – the formal separation of criminal proceedings from the administrative tax dispute – prevents the criminal court from treating the tax authority's assessment as conclusive proof of an offence. This argument requires early intervention. Once the criminal court accepts the tax assessment without challenge, reversing that position is extremely difficult and forfeits one of the strongest defences available.
For boards of foreign-owned subsidiaries, the interaction between Polish KKS proceedings and the parent company's compliance obligations abroad adds another layer. A German parent whose Polish subsidiary faces fiscal criminal charges may have disclosure obligations under its own jurisdiction's corporate governance rules. Our team has navigated this interface for clients in Lower Silesia (spring 2026), coordinating between Polish defence counsel and German compliance officers to contain reputational and regulatory risk on both sides.
Where do board member defences most commonly fail?
The three most common failure points in KKS board-member defence are: acting too slowly, delegating without documenting, and conflating the tax dispute with the criminal case. Each failure is avoidable. Each, once entrenched, forecloses options that were available at the outset. Understanding these failure modes is the starting point for any effective defence strategy.
Speed is the dominant variable. The voluntary disclosure window closes the moment KAS formally records its suspicion. In practice, that can happen within days of an audit notice being issued. Boards that spend the first week consulting their commercial lawyer, then their accountant, then their tax advisor – before engaging criminal defence counsel – routinely miss the voluntary disclosure window. Personal liability that could have been extinguished entirely becomes a prosecution.
Delegation without documentation is the second failure mode. Polish courts have consistently held that a board member who delegates tax compliance to an employee or external advisor retains criminal exposure unless the delegation is formalised, the delegate had sufficient authority and expertise, and the board member exercised reasonable oversight. An informal instruction to "handle the VAT" does not constitute a defence. A written delegation agreement, combined with evidence of monitoring, does.
(A related misconception: some board members believe that resigning from the board before a tax period is audited removes liability for that period. It does not. KKS liability attaches to the period in which the offence occurred, not the period in which proceedings begin. Resignation after the fact changes nothing.)
The third failure mode is treating the tax dispute and the criminal case as a single proceeding. They are not. The tax authority reassesses; the criminal court adjudicates. A board member who makes admissions in the administrative tax proceedings – for example, by agreeing to a settlement to resolve the tax liability quickly – may inadvertently create evidence used against them in the criminal case. Coordinating both tracks from the outset is essential. The white-collar defence strategy must inform every statement made in the administrative phase.
What do cross-border structures mean for KKS exposure?
Foreign investors operating through Polish subsidiaries face a specific risk profile under the KKS. The parent company appoints directors, sets financial policy, and approves budgets – but the Polish board members sign the tax declarations. When KAS investigates, it investigates the signatories. The fact that a decision was made at group level does not transfer liability upward. Polish criminal law does not recognise group-level instruction as a defence unless the board member can show they were acting under duress or had no reasonable way to know the instruction was unlawful.
This creates a structural problem for nominee directors and executives seconded from the parent. They sign declarations for a company whose tax affairs they do not fully understand, in a language they may not speak fluently, under a system they were not trained in. KAS is well aware of this pattern. Investigations increasingly focus on seconded executives as the path of least resistance when reconstructing who "handled financial affairs."
Pre-pack restructuring (przygotowana likwidacja, pre-pack) is sometimes proposed as a way to transfer assets and leave KKS liability behind. This does not work. Criminal liability is personal and does not transfer with assets. A board member who participates in a pre-pack to frustrate KAS collection may face additional charges for obstructing proceedings. Understanding the boundary between legitimate restructuring and liability evasion is critical – our article on cross-border insolvency involving Poland and Sweden addresses how Swedish-parent structures have navigated this issue.
Transfer pricing adjustments made at group level are a particularly active area of KAS scrutiny in 2026. Where a Polish subsidiary's taxable base is reduced by related-party charges, and KAS reclassifies those charges as non-deductible, the resulting tax shortfall can cross the criminal offence threshold quickly. Board members who approved the intercompany agreements without obtaining a formal transfer pricing opinion carry personal exposure. Boards of Polish subsidiaries of multinational groups should treat transfer pricing documentation as a criminal defence instrument, not merely a compliance formality. (For context on tax structuring at the family-office level, see our guide on the family foundation in Poland.)
What is the self-assessment checklist for board members?
Boards that identify their KKS exposure before KAS arrives are in a fundamentally stronger position. The following checklist covers the five areas where liability most commonly crystallises. It is not a substitute for legal advice, but it identifies the questions that defence counsel will ask on day one. A "no" answer to any item warrants immediate attention.
- Are all VAT, CIT, and WHT declarations signed by a board member who reviewed the underlying data – not merely countersigned as a formality?
- Is there a written delegation agreement for tax compliance functions, specifying the delegate's authority, qualifications, and reporting obligations to the board?
- Has the company obtained a formal transfer pricing opinion for all material intercompany transactions, updated for the current tax year?
- Does the board have a documented protocol for responding to KAS inquiries, including a clear instruction to engage criminal defence counsel within 24 hours of any KAS contact?
- Have all historic VAT adjustments, corrections, and voluntary disclosures been reviewed by tax counsel within the last 12 months?
Boards operating in restructuring Poland contexts face additional exposure. A company in financial difficulty is more likely to have delayed tax remittances, informal payment arrangements with KAS, or outstanding assessments under appeal. Each of these creates a potential KKS trigger. The interaction between board liability under the KSH and personal criminal exposure under the KKS is not theoretical – it is the daily reality of restructuring practice.
Specific figures to hold in mind: the voluntary disclosure filing must precede KAS's formal documentation of suspicion; the criminal offence threshold sits at approximately PLN 9,200 in 2026; a conviction results in automatic disqualification from board service; and proceedings can be initiated up to 5 years after the offence for fiscal criminal offences, and up to 10 years for the most serious category. These timelines mean that a board member who left a company in 2021 may still face proceedings in 2026.
A specific bridge for boards evaluating their position: the combination of insolvency risk and criminal exposure is not linear. Each track accelerates the other. A tax assessment under appeal increases restructuring pressure; restructuring decisions create new KKS triggers. The decision matrix is: current exposure level (assessed or unassessed) × procedural stage × available instruments × time remaining before voluntary disclosure window closes. That matrix must be evaluated by counsel who works across both tracks simultaneously.
Frequently asked questions
Q: Can a board member avoid KKS liability simply by resigning before the tax authority opens an investigation?
A: Resignation does not extinguish liability for the period during which the board member held office and the offence occurred. The Fiscal Penal Code attaches liability to the period of the offence, not the period of proceedings. A board member who resigned in 2023 may still be prosecuted in 2026 for a VAT shortfall that arose during their tenure. Resignation is not a defence instrument under the KKS.
Q: How long does a KKS investigation typically take, and what are the costs of defence?
A: Investigation phases vary considerably. A straightforward case handled entirely at the KAS level may resolve within 6 to 12 months. Cases referred to the prosecutor and then to the district court can run for 2 to 4 years. Defence costs depend on complexity, the number of board members involved, and whether the case involves parallel administrative and criminal tracks. Boards should budget for both tax counsel (to contest the underlying assessment) and criminal defence counsel (to manage the KKS track) – these are distinct mandates requiring distinct expertise.
Q: Is it a misconception that paying the outstanding tax automatically closes the criminal case?
A: Yes, this is one of the most common misconceptions. Payment of the outstanding tax and interest is a necessary condition for voluntary disclosure to succeed – but it is not sufficient on its own. The voluntary disclosure notice must be filed with KAS before the authority formally documents its suspicion. Payment made after that point, without a valid voluntary disclosure, does not prevent prosecution. It may, however, be considered a mitigating factor at sentencing. Boards should not pay first and ask questions later; they should engage criminal defence counsel before making any payment.
Specific situations require specific analysis. The KKS framework gives board members real options – but only if those options are identified and exercised before the procedural windows close.
To receive an expert assessment of your board's KKS exposure and available defence instruments, contact info@kordeckipartners.com.
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 fiscal criminal defence, restructuring, and board liability. 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.