The tax authorities take a harder line - what is changing in the Tax Ordinance?
The Ministry of Finance has published a new version of the draft amendment to the Tax Ordinance (reference UC 138), which fundamentally changes the rules on the liability of those managing companies for their tax obligations. The scale of the changes is unprecedented, and their consequences will affect hundreds of thousands of managers across Poland.
The draft is of key importance for those managing more than 600,000 companies - that is how many limited liability companies (sp. z o.o.) alone are now operating. Data for 2024 show the scale of the problem: almost 60,000 managers are held liable every year for their companies' taxes. Once the new rules enter into force, this number could rise significantly.
Under the current law, freeing yourself from liability for a company's tax debts is already extremely difficult. However, the amendment is heading towards even stricter regulation, which in practice means that management board members and persons who actually manage a company will have to take even greater care over the tax position of the entities they run.
It is worth stressing that the changes do not apply solely to formal board members. The rules also cover people who actually make decisions in a company, even if they do not hold official positions in its management bodies.
Three key changes to the conditions for avoiding liability
The latest version of the draft amendment introduces three significant modifications to the remedial-action conditions that a company manager can rely on to avoid liability for its tax debts. As tax law experts agree, each of these changes narrows the room for manoeuvre of those managing companies.
The existing exculpatory conditions
Under the current law, a manager can avoid liability for a company's tax obligations if they show that certain conditions are met. The most important of these are:
- Timely filing of a bankruptcy petition - the manager must show that they took action in good time to initiate bankruptcy proceedings.
- Opening of restructuring proceedings - as an alternative to bankruptcy, showing that remedial action was taken as part of a restructuring.
- No fault for failing to file a petition - the manager may try to show that they are not at fault for failing to act on time.
- Identifying company assets that would allow a substantial part of the tax arrears to be satisfied.
After the planned changes, each of these conditions will be modified to the detriment of those managing companies. The new wording will mean that an effective defence against claims by the tax authorities will require even greater diligence and a proactive approach to managing tax risk.
Freezing managers' assets - a new tool for the tax authorities
One of the most controversial changes in the draft is giving the tax authorities the power to freeze managers' personal assets. In practice, this means the tax authorities will be able to block funds in the bank accounts of those managing companies - and for a period of many years.
This mechanism is particularly dangerous from a manager's perspective, because asset security measures can be applied even before a final decision on liability has been issued. This means that even a person who is ultimately cleared may be without access to their funds for a long time.
A freeze may cover not only bank accounts but also other assets, such as real estate, vehicles or shares in other companies. This is a real threat to the financial stability of people in management roles, and it should prompt appropriate preventive steps before the new rules take effect.
Experts stress that this kind of solution, although known in other jurisdictions, may in Polish conditions lead to abuse by the tax authorities, particularly where there are insufficient mechanisms for judicial oversight of the security process.
Widening the circle of persons held liable
The draft amendment also provides for widening the circle of persons who may be held liable for companies' tax obligations. This change should concern not only formal board members, but also operations directors, holders of a commercial power of attorney (prokurenci) and people who actually make strategic decisions in companies.
Under the new law, liability for a company's tax arrears may be imposed on people who are not listed in the National Court Register (KRS) as board members but who in reality influence the entity's financial and tax decisions. This is a significant paradigm shift, and it requires everyone involved in managing a company to reassess their legal risk.
It is worth noting that the widening of liability goes hand in hand with a Europe-wide trend of tightening tax systems. Polish regulations are increasingly moving towards a model in which no decision-maker can effectively hide behind a corporate structure to avoid liability for public-law obligations.
How to protect yourself from liability - practical tips
In the face of the coming changes, managers should take specific preventive action now. The key is proactive management of tax risk, rather than reacting only once a problem arises. Below are the most important recommendations.
- Regular tax audit of the company - ongoing monitoring of tax obligations allows irregularities to be detected early and remedial action to be taken.
- Documenting decision-making processes - in a dispute with the tax authorities, it is crucial to be able to show that the manager acted with due care.
- Monitoring tax deadlines - delays in paying taxes may provide grounds for initiating proceedings against those managing the company.
- Legal advice when taking up a role - before accepting a position on the board, it is worth examining the company's tax health.
- Preparing an exit strategy - an action plan in case the company's financial situation deteriorates, including restructuring scenarios.
It is also extremely important to keep track of the legislative work on draft UC 138. The rules may still change during the legislative process, so it is worth keeping up to date with every new version of the draft.
Don't wait for the rules to take effect - act now
The planned changes to the Tax Ordinance pose a serious threat to those managing companies in Poland. The tightening of the exculpatory conditions, the widening of the circle of persons held liable and the possibility of freezing managers' personal assets create a new legal reality, and it is worth preparing for it in advance.
If you are a board member, a holder of a commercial power of attorney (prokurent) or you actually manage a company - do not put off analysing your risk. Every day of delay may mean losing the chance to take effective protective action.
Contact our firm to discuss your situation and work together on a strategy to minimise the risk of liability for the company's tax obligations. Our tax and corporate law experts will help you get through the coming changes safely and with full awareness of your rights.
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