Deadline for filing for bankruptcy and the management board's liability for tax debts

What do the latest CJEU judgments show?

For members of management boards of capital companies, filing a bankruptcy petition on time is not only a statutory obligation – it is also a key element of protection against personal liability for tax liabilities. The latest judgments of the European Court of Justice underscore the importance of this action and reinforce position of the tax authorities.

CONTENTS

A few words about the article - Listen

Presumption of guilt of a management board member

Article 116 of the Tax Ordinance Act states that a management board member is jointly and severally liable for the company's tax arrears. The key defense against charging a management board member for the company's liabilities is proof of timely filing of a bankruptcy petition or no fault in failing to submit it.
CJEU judgment of April 2025 in the case C-278/24 (Genzyński) confirmed that failure to submit an application on time may be treated as a presumption of guilt of a management board member, giving the tax authorities a strong argument in the dispute.

The application as a protective shield

The Court clearly stated that filing a bankruptcy petition even ineffective (e.g., dismissed by the court) protects a management board member from liability. What matters is the fact that actions were taken and steps were taken to protect creditors, not the final outcome of the bankruptcy proceedings. The aforementioned ruling concerned a rather specific case where the company had only one creditor – the State Treasury – and thus did not have a plurality of creditors, which, according to Article 11 of the Bankruptcy Law, is a basis for declaring bankruptcy.

Delayed action – risk of liability

If the bankruptcy petition is filed after the deadline, there is no liability protection. The CJEU emphasized that the management board's duties are professional in nature, and the lack of timely action is tantamount to negligence.

How to rebut the presumption of guilt?

Despite its strict interpretation, the Court left a loophole for a defense. A management board member can demonstrate that the failure to submit the application was due to circumstances beyond their control and that they acted with due diligence. However, this requires detailed documentation of the decision and the company's financial situation.

Conclusions for business practice

The new line of jurisprudence sends a clear signal to management boards: monitoring a company's financial liquidity and timely filing for bankruptcy should be standard corporate practice. No response to financial problems almost automatically exposes management board members to personal liability for tax liabilities.

Summary

The CJEU's rulings strengthen the position of tax authorities and increase requirements for company managers. A timely bankruptcy petition is becoming a fundamental tool for protecting management, and failure to do so poses a serious financial and legal risk.