Contents
Judgment of the Court (Ninth Chamber)30 April 2025note(Reference for a preliminary ruling — Common system of value added tax (VAT) — Directive 2006/112/EC — Article 273 — Measures to ensure the correct collection of VAT — VAT debt of a taxable person — National legislation providing for the joint and several liability of the former chair of the board of directors of the taxable person — Exemption from joint and several liability — Absence of fault — Application for a declaration of insolvency — Existence of only one creditor — Proportionality — Equal treatment — Right to property — Legal certainty)In Case C‑278/24 [Genzyński],noteREQUEST for a preliminary ruling under Article 267 TFEU from the Wojewódzki Sąd Administracyjny we Wrocławiu (Regional Administrative Court, Wrocław, Poland), made by decision of 31 January 2024, received at the Court on 22 April 2024, in the proceedingsP.K.vDyrektor Izby Administracji Skarbowej we Wrocławiu,THE COURT (Ninth Chamber),composed of N. Jääskinen, President of the Chamber, A. Arabadjiev and R. Frendo (Rapporteur), Judges,Advocate General: M. Campos Sánchez-Bordona,Registrar: A. Calot Escobar,having regard to the written procedure,after considering the observations submitted on behalf of:– the Dyrektor Izby Administracji Skarbowej we Wrocławiu, by E. Chojnacki and B. Rogowska-Rajda,– the Polish Government, by B. Majczyna, acting as Agent,– the European Commission, by M. Herold and B. Sasinowska, acting as Agents,having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,gives the following
Judgment
1This request for a preliminary ruling concerns the interpretation of Articles 193, 205 and 273 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1), as amended by Council Directive (EU) 2018/1695 of 6 November 2018 (OJ 2018 L 282, p. 5, and corrigendum OJ 2018 L 329, p. 53) (‘the VAT Directive’), read in conjunction with Article 2 TEU, Article 325 TFEU, and Articles 17, 20, 21, 41 and 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’), as well as the principles of proportionality, legal certainty and the protection of legitimate expectations.
2The request has been made in proceedings between P.K. and the Dyrektor Izby Administracji Skarbowej we Wrocławiu (Director of the Tax Administration Chamber in Wrocław, Poland) concerning the incurrence by P.K. of joint and several liability for the value added tax (VAT) debt of a company whose board of directors had been chaired by P.K.
Legal context
European Union law
3Article 193 of the VAT Directive provides:‘VAT shall be payable by any taxable person carrying out a taxable supply of goods or services, except where it is payable by another person in the cases referred to in Articles 194 to 199b and Article 202.’
4Article 205 of that directive states:‘In the situations referred to in Articles 193 to 200 and Articles 202, 203 and 204, Member States may provide that a person other than the person liable for payment of VAT is to be held jointly and severally liable for payment of VAT.’
5The first paragraph of Article 273 of that directive is worded as follows:‘Member States may impose other obligations which they deem necessary to ensure the correct collection of VAT and to prevent evasion, subject to the requirement of equal treatment as between domestic transactions and transactions carried out between Member States by taxable persons and provided that such obligations do not, in trade between Member States, give rise to formalities connected with the crossing of frontiers.’
Polish law
The Tax Code
6The ustawa – Ordynacja podatkowa (Law establishing the Tax Code) of 29 August 1997, in the version applicable to the facts in the main proceedings (Dz. U. of 2023, item 2383) (‘the Tax Code’), provides, in Article 107 thereof:1. In the cases and to the extent provided for in this Chapter, third parties shall also be jointly and severally liable with the taxable person, in respect of their entire assets, for the taxable person’s tax arrears.…2.Unless otherwise provided, third parties shall also be liable:…(2) in respect of default interest on tax arrears;…’
7Article 108 of the Tax Code provides, in paragraph 1 thereof:‘The tax authorities shall rule on the tax liability of a third party by way of a decision.’
8Under Article 116 of that code:1.The members of the board of directors of a limited liability company, a limited liability company being formed, a simplified limited company, a simplified limited company being formed, a public limited company or a public limited company being formed shall be jointly and severally liable, in respect of their entire assets, for the tax arrears of those companies, where enforcement against the assets of the company has proved unsuccessful in whole or in part and where members of the board of directors:(1) have not demonstrated that:(a) an application for a declaration of insolvency has been filed in due time or a decision to initiate restructuring proceedings … or to approve an arrangement in the context of an insolvency plan … has been issued at the same time, or;(b) the absence of an application for a declaration of insolvency is not due to fault on his or her part;(2) have not identified the assets of the company, the execution of which would make it possible to cover, to a large extent, the company’s tax arrears.…2. The liability of the members of the board of directors shall extend to the tax arrears in respect of the outstanding debts during the performance of their duties and to arrears … arising during the performance of those duties.…4. The provisions of paragraphs 1 to 3 shall also apply to former members of the board of directors and to former representatives or members of the company being formed.…’
The Law on Insolvency
9The ustawa – Prawo upadłościowe (Law on Insolvency) of 28 February 2003, in the version applicable to the facts in the main proceedings (Dz. U. of 2024, item 794) (‘the Law on Insolvency’), provides, in Article 1 thereof:1.This Law shall govern:(1) the principles of collective enforcement of creditors’ claims against insolvent debtor undertakings;…’
10Article 11 of that law provides:1. The debtor is insolvent when he, she or it has lost the capacity to meet his, her or its financial commitments.1a. It shall be presumed that the debtor has lost the capacity to meet his, her or its financial commitments when the delay in fulfilling the financial commitments exceeds three months.…’
11Article 20 of that law states:1. An application for a declaration of insolvency may be filed by the debtor or by one of his, her or its creditors.…’
12Under Article 21 of the Law on Insolvency:1. The debtor shall be required, at the latest within thirty days of the date on which the grounds for the declaration of insolvency occurred, to file an application for a declaration of insolvency with the court.…’
The dispute in the main proceedings and the questions referred for a preliminary ruling
13P.K. was the chair of the board of directors of the company E. sp. z o.o. [(‘Company E’)] from January 2014 to September 2017.
14Because that company failed to pay the amounts due by way of VAT for the period from May 2017 to August 2017, those amounts became tax arrears.
15The Naczelnik Dolnośląskiego Urzędu Skarbowego we Wrocławiu (Head of the Lower Silesia Tax Office, Wrocław, Poland) (‘the NDUS’) issued enforcement orders against Company E. and took certain enforcement measures. Having found that the assets of that company did not allow the full amount of the tax arrears to be discharged, the NDUS abandoned those enforcement proceedings.
16On the basis of Article 107(1) and (2)(2) and Article 108(1) of the Tax Code, read in conjunction with Article 116 thereof, the NDUS initiated proceedings seeking to establish the joint and several liability of P.K. for the tax arrears of Company E.
17By decision of 15 June 2022, the NDUS held P.K. jointly and severally liable for those arrears.
18P.K. challenged the decision referred to in the preceding paragraph before the Director of the Tax Administration Chamber in Wrocław, which confirmed, by decision of 18 October 2022, that the first decision was well founded.
19P.K. has brought an action for annulment of that second decision before the Wojewódzki Sąd Administracyjny we Wrocławiu (Regional Administrative Court, Wrocław, Poland), which is the referring court.
20To that end, P.K. has relied on an infringement of Article 11, Article 20(1) and Article 21(1) of the Law on Insolvency, as well as Article 116(1)(1) of the Tax Code.
21P.K. has claimed, in particular, that, during the period in which he performed his duties as chair of the board of directors of Company E., there were no legal or factual reasons for filing an application for a declaration of insolvency with respect to that company, which constitutes a requirement for the application of Article 116(1)(1) of the Tax Code. Consequently, the filing of such an application would have been premature and unjustified. According to P.K., the Polish tax authorities established his liability for Company E.’s tax debts solely on the basis of a general presumption that, because that company’s tax liability arose during the period referred to above, he was, as a matter of principle, liable for that debt. However, the fact that a debt arises at a given time does not, in itself, mean that the debtor’s insolvency occurred at the same time.
22In addition, P.K. has submitted that, according to the relevant provisions of the Law on Insolvency, as interpreted by national case-law and academic legal literature, insolvency proceedings may be initiated only if the debtor concerned fails to meet his, her or its commitments with respect to at least two creditors. A request to initiate those proceedings where there is only one creditor, although formally possible, would have no legal effect.
23The referring court explains that, in the Polish legal system, the question of the joint and several liability of a third party, such as a member or former member of the board of directors of a company, is governed by the provisions of Article 116 of the Tax Code.
24That court remarks that a member or former member of the board of directors of a company is jointly and severally liable for the tax debts of that company where, first, the tax authorities demonstrate that certain positive conditions are satisfied and, second, that member or former member fails to demonstrate that he or she may be exempted from that liability.
25In particular, according to that court, the positive conditions for a member or former member of the board of directors of a company to incur joint and several liability (‘the positive conditions’) are as follows:– the company concerned has a tax debt resulting, in particular, from a tax decision establishing that liability in a binding manner;– that debt arose during the period in which that member or former member performed a management function within that company;– enforcement against that company has been unsuccessful.
26According to the referring court, a member or former member of the board of directors of a company obtains exemption from joint and several liability only if the following conditions are satisfied:– that member or former member demonstrates that he or she has filed an application for a declaration of insolvency in due time or that a decision to initiate restructuring proceedings or to approve an arrangement in the context of an insolvency plan has been issued at the same time, or– that member or former member demonstrates that the failure to file an application for a declaration of insolvency is not due to fault on his or her part, or– that member or former member identifies the assets of the company in respect of which enforcement will make it possible to cover, to a large extent, that company’s tax arrears.
27In that regard, that court states that the expression ‘in due time’, in Article 116(1)(1)(a) of the Tax Code, refers to the time when, by exercising reasonable diligence, the managing director of the company could have been aware of the fact that that company had become insolvent, that it had permanently ceased to pay its debts, and that its assets were not sufficient to discharge those debts.
28That court adds, in essence, that, as regards the failure to file an application for a declaration of insolvency, fault may be intentional or unintentional. It specifies that there is no fault if a member or former member of the board of directors of the company, while exercising all due diligence in the conduct of his or her affairs, has not filed such an application for reasons beyond his or her control.
29The referring court considers that, in the light of its characteristics, the Polish system of joint and several liability of a member or former member of the board of directors of a company with a tax debt may be incompatible with EU law.
30As a preliminary point, that court remarks that, according to the guidance provided, inter alia, by the judgment of 13 October 2022, Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’ (C‑1/21, EU:C:2022:788), it is true that a system of joint and several liability of a third party for a company’s tax obligations contributes to ensuring the correct collection of VAT for the purposes of Article 273 of the VAT Directive, read in the light of Article 325(1) TFEU. However, the discretion which Article 273 of the VAT Directive confers on the Member States with regard to the methods of achieving the aims pursued by that article must be exercised in compliance with EU law, in particular its general principles, including the principle of proportionality.
31In that regard, according to that court, it is apparent from that judgment that Article 273 of the VAT Directive and the principle of proportionality must be interpreted as not precluding a piece of national legislation which provides, where certain circumstances are present, for a system of joint and several liability for the VAT debts of a legal person. Nevertheless, it follows from that judgment that national measures under which a person other than the taxable person becomes liable for the payment of VAT, without the possibility of proving that he or she has no connection with the taxable person’s actions, cannot be accepted.
32In the present case, the referring court considers, in the first place, that the system provided for in Article 116 of the Tax Code does not require an assessment of the conduct of a member or former member of the board of directors of a company in respect of which joint and several liability is sought, in order to determine whether that conduct is characterised by bad faith or lack of diligence in his or her management of that company’s affairs. The existence of fault appears in only one of the conditions for exemption from such liability, that is to say, where no application for a declaration of insolvency has been filed in due time.
33Therefore, according to that court, even if that member or former member were to show that he or she had acted with due diligence, he or she would not be exempted from his or her liability, unless he or she were to prove that he or she satisfied the conditions for exemption.
34In that context, that court has doubts as to whether Article 116 of the Tax Code is consistent with the principle of proportionality and the right to property, enshrined in Article 17 of the Charter and in Article 1 of Protocol No 1 to the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Paris on 20 March 1952.
35The referring court adds that, according to the case-law of the European Court of Human Rights (ECtHR), in order to be compatible with Article 1 of that protocol, interference with the right to property must strike a ‘fair balance’ between the demands of the public interest and the requirements of the protection of the individual’s fundamental rights (ECtHR, 5 January 2000, Beyeler v. Italy, CE:ECHR:2000:0105JUD003320296, § 107, and ECtHR, [16] July 2014, Ališić and Others v. Bosnia and Herzegovina, Croatia, Serbia, Slovenia and the former Yugoslav Republic of Macedonia, CE:ECHR:2014:0716JUD006064208, § 108).
36In the second place, the referring court refers to Polish practice and case-law according to which a member or former member of the board of directors of a company is required to file an application for a declaration of insolvency for that company in order to be able to be exempted from his or her joint and several liability. Under Articles 10 and 11 of the Law on Insolvency, such an application must be filed where the conditions for the debtor’s insolvency laid down by those provisions are satisfied, that is to say, where the debtor has lost the capacity to meet his, her or its financial commitments, which is presumed to be the case when the delay in fulfilling those commitments exceeds three months. According to national case-law, the debtor is required only to assess whether he, she or it is able to discharge his, her or its debts, whereas the assessment of the conditions for a declaration of insolvency can be carried out only by a court having jurisdiction in insolvency matters.
37That court thus emphasises that, according to Polish practice and case-law, the fact that a debt is not discharged with regard to only one creditor does not relieve a member or former member of the board of directors of a company of his or her obligation to file an application for a declaration of insolvency. However, according to that court, where there is only one creditor, that application would necessarily be rejected by the court having jurisdiction in insolvency matters and would thus be deprived of all effectiveness.
38On the basis of those considerations, the referring court considers that the condition for exemption relating to the filing of an application for a declaration of insolvency cannot be of any benefit to a member or former member of the board of directors of a company having the public exchequer as its sole creditor. This results in a breach of the principles of legal certainty (the corollary of which is the protection of legitimate expectations), sound administration, and respect for the rule of law. That member or former member would also be deprived of the right to an effective remedy, as all his or her arguments relating to the impossibility of effectively filing an application would be ignored by the Polish courts.
39In the third place, the referring court considers that the condition for exemption relating to the obligation to file an application for a declaration of insolvency raises questions as to whether it is consistent with the principle of equality before the law, enshrined in Articles 20 and 21 of the Charter. In that regard, that court emphasises, in particular, that a member or former member of the board of directors of a company having the public exchequer as its sole creditor does not have the possibility of effectively filing an application for a declaration of insolvency, as that application would necessarily be rejected by the court having jurisdiction in insolvency matters simply due to the absence of multiple creditors. By contrast, a member or former member of the board of directors of a company having several creditors would have his or her application for a declaration of insolvency examined on the merits by that court.
40In those circumstances, the Wojewódzki Sąd Administracyjny we Wrocławiu (Regional Administrative Court, Wrocław) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:(1) Must the provisions of [the VAT Directive], including Articles 193, 205 and 273 thereof, [read] in conjunction with Article 325 [TFEU] and Article 17 of [the Charter], [as well as] the principle of proportionality, be interpreted as precluding national legislation which provides for a mechanism whereby a member of the board of directors of a legal person is jointly and severally liable for the VAT debts of that legal person without it having first been established whether that member of the board of directors acted in bad faith or whether his or her conduct could be found to constitute a culpable error or negligence?(2) Must the provisions of the VAT Directive, including Articles 193, 205 and 273 thereof, [read] in conjunction with [Article ]325 TFEU, [as well as] the principle of legal certainty, the principle of legitimate expectations, and the principle of the right to sound administration derived from Article 41 of the Charter, [read] in conjunction with Article 2 [TEU] (the rule of law and respect for human rights) and Article 47 of the Charter (effective remedy, right to a court), be interpreted as precluding a national practice which, in order to escape joint and several liability for the VAT debts of a legal person with [only one] creditor, requires a member of the board of directors to [file an application for a declaration of insolvency], which is [devoid of purpose] under national insolvency law and practice and consequently infringes the essence of the right to property (Article 17 of the Charter)?(3) Must the provisions of Articles 193, 205 and 273 of the VAT Directive, [read] in conjunction with Article 325 TFEU, [as well as] the principle of equality before the law and the principle of non-discrimination (Articles 20 and 21 of the Charter), be interpreted as precluding national legislation [cited in point 1] which allows unequal treatment of members of the board of directors of legal persons, such that a member of the board of directors of a legal person with more than one creditor may escape liability for the company’s debts by [filing an application for a declaration of insolvency], whereas a member of the board of directors of a legal person with only one creditor does not have the possibility of effectively [filing] such an application, with the result that he or she is deprived of the possibility of escaping joint and several liability for the legal person’s VAT debts and of the right to an effective remedy (Article 47 of the Charter)?’
Consideration of the questions referred
Preliminary observations
41According to settled case-law, in the procedure laid down by Article 267 TFEU providing for cooperation between national courts and the Court of Justice, it is for the latter to provide the national court with an answer which will be of use to it and enable it to decide the case before it. To that end, the Court should, where necessary, reformulate the questions referred to it (judgment of 26 October 2021, PL Holdings, C‑109/20, EU:C:2021:875, paragraph 34 and the case-law cited).
42As can be seen from paragraph 40 of the present judgment, the questions referred for a preliminary ruling concern the interpretation of Articles 193, 205 and 273 of the VAT Directive, read in conjunction with Article 2 TEU, Article 325 TFEU, and Articles 17, 20, 21, 41 and 47 of the Charter, as well as the principles of proportionality, legal certainty and the protection of legitimate expectations.
43In the first place, as regards the VAT Directive, it should be borne in mind that Articles 193 to 200 and 202 to 204 of that directive determine the persons liable for payment of VAT, in accordance with the purpose of Section 1, entitled ‘Persons liable for payment of VAT to the tax authorities’, of Chapter 1 of Title XI thereof, of which those provisions form part. Although Article 193 of that directive provides, as the basic rule, that VAT is payable by any taxable person carrying out a taxable supply of goods or services, the wording of that article states that other persons may or must be liable for payment of VAT in the situations referred to in Articles 194 to 199b and 202 thereof (see, to that effect, judgment of 13 October 2022, Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’, C‑1/21, EU:C:2022:788, paragraph 48 and the case-law cited).
44In addition, under Article 205 of the VAT Directive, in the situations referred to in Articles 193 to 200 and 202 to 204 of that directive, Member States may provide that a person other than the person liable for payment of VAT is to be held jointly and severally liable for payment of VAT.
45It is apparent from the context formed by Articles 193 to 205 of the VAT Directive that Article 205 of that directive is part of a set of provisions aimed at identifying the person liable for payment of VAT in various situations (judgment of 13 October 2022, Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’, C‑1/21, EU:C:2022:788, paragraph 49 and the case-law cited).
46In principle, therefore, Article 205 of the VAT Directive allows Member States to adopt, for the efficient collection of VAT, measures pursuant to which a person other than the person normally liable for that tax under Articles 193 to 200 and 202 to 204 of that directive is held jointly and severally liable for payment of that tax (judgment of 13 October 2022, Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’, C‑1/21, EU:C:2022:788, paragraph 50 and the case-law cited).
47In the present case, it is not apparent from the request for a preliminary ruling that P.K. is a taxable person for VAT purposes or another person liable for payment of VAT for the purposes of Article 193 of that directive; nor is it apparent that the purpose of the system of joint and several liability provided for in Article 116 of the Tax Code is to designate a person liable for payment of VAT on one or more specific taxable transactions for the purposes of Articles 193 and 205 of that directive, read together. Under that system, the members or former members of the board of directors of a company may, under certain conditions, be regarded as jointly and severally liable for all or part of the VAT debts of that company, without those debts being related to one or more specific taxable transactions.
48Consequently, Articles 193 and 205 of the VAT Directive are not relevant in the circumstances of the dispute in the main proceedings.
49In the second place, as regards the principles and fundamental rights referred to by the referring court, it must be stated, first of all, that Article 41 of the Charter, relating to the right to good administration, is not applicable in the context of the dispute in the main proceedings, because it is addressed not to the Member States but solely to the institutions, bodies, offices and agencies of the European Union (judgment of 17 July 2014, YS and Others, C‑141/12 and C‑372/12, EU:C:2014:2081, paragraph 67). It is true that the right to good administration, enshrined in that provision, reflects a general principle of EU law (judgment of 17 July 2014, YS and Others, C‑141/12 and C‑372/12, EU:C:2014:2081, paragraph 68). However, there is nothing in the request for a preliminary ruling that could lead the Court to rule on the right to good administration as a general principle of EU law.
50Next, as regards Article 47 of the Charter, relating to the right to an effective remedy and to a fair trial, as can be seen from paragraph 38 of the present judgment, the referring court considers that a member or former member of the board of directors of a company having the public exchequer as its sole creditor is deprived of that right, as none of the arguments relating to that impossibility of that member or former member effectively filing an application for a declaration of insolvency would be taken into account.
51However, it is apparent from the order for reference that that consideration concerns, in fact, the question whether Article 273 of the VAT Directive, read in conjunction with Article 325 TFEU, as well as the right to property, enshrined in Article 17 of the Charter, the principle of equal treatment, resulting from Articles 20 and 21 thereof, and the principles of proportionality and legal certainty, precludes the system provided for in Article 116 of the Tax Code, in so far as it does not exempt such a member or former member from filing an application for a declaration of insolvency. If it were concluded that that system, while not providing for such an exemption, is consistent with those provisions and those principles, the fact that the arguments referred to in the preceding paragraph of the present judgment are not taken into account would not be contrary to Article 47 of the Charter. By contrast, if it were considered that those provisions and those principles preclude that system, it would not, in any event, be compatible with EU law, without it being necessary to enlist Article 47 of the Charter.
52Lastly, although the referring court also refers to Article 2 TEU, which sets out the values on which the European Union is founded, there is nothing in the request for a preliminary ruling to permit the inference that that court seeks the interpretation of that article independently of the fundamental rights and principles to which it refers in the questions referred. Similarly, as can be seen from paragraph 38 of the present judgment, the referring court referred to the principle of the protection of legitimate expectations only as a corollary of the principle of legal certainty.
53In the third and last place, it appears that there is a close connection between the three questions raised by the referring court.
54Consequently, it must be held that, by its questions, which it is appropriate to examine together, the referring court asks, in essence, whether Article 273 of the VAT Directive, read in conjunction with Article 325 TFEU, as well as the right to property and the principles of equal treatment, proportionality and legal certainty, is to be interpreted as precluding a national system which makes it possible to establish the joint and several liability of a member or former member of the board of directors of a company for the VAT debt of that company, where that system, first, does not require a finding of fault on the part of that member or former member and, second, provides, as a condition for exemption, for the filing in due time, by that member or former member, of an application for a declaration of insolvency with respect to that company, including where that company has the public exchequer as its sole creditor and such an application is, therefore, according to national practice and case-law, bound to be rejected.
Substance
55In accordance with the first paragraph of Article 273 of the VAT Directive, Member States may impose obligations, other than those provided for by that directive, if they consider such obligations necessary to ensure the correct collection of VAT and to prevent evasion (judgments of 19 October 2017, Paper Consult, C‑101/16, EU:C:2017:775, paragraph 49, and of 11 January 2024, Global Ink Trade, C‑537/22, EU:C:2024:6, paragraph 41).
56In addition, Article 325(1) TFEU requires the Member States to counter fraud and any other illegal activities affecting the financial interests of the Union through effective measures which will act as a deterrent.
57It follows, in particular, from the provisions referred to above that the Member States are required to take all legislative and administrative measures appropriate for ensuring collection of all VAT due on their territory and for preventing tax evasion (judgment of 13 October 2022, Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’, C‑1/21, EU:C:2022:788, paragraph 60 and the case-law cited).
58A system of joint and several liability such as that established by Article 116 of the Tax Code contributes to the collection of amounts of VAT which have not been paid by a taxable legal person within the mandatory time limits laid down by the VAT Directive. Such a system thus helps to ensure the correct collection of VAT within the meaning of Article 273 of that directive, in accordance with the obligation laid down in Article 325(1) TFEU (see, to that effect and by analogy, judgment of 13 October 2022, Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’, C‑1/21, EU:C:2022:788, paragraph 61).
59It follows from the case-law that, outside the limits laid down therein, Article 273 of the VAT Directive does not specify either the conditions or the obligations which the Member States may impose. That article therefore gives the Member States a margin of discretion with regard to the means of attaining the objectives of ensuring the collection of all the VAT and preventing tax evasion. Nevertheless, the Member States must exercise that power in accordance with EU law and its general principles and, consequently, in accordance with the principle of proportionality (see, to that effect, judgment of 13 October 2022, Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’, C‑1/21, EU:C:2022:788, paragraphs 69 and 72).
60Therefore, while it is legitimate for the measures adopted by the Member States to seek to preserve the rights of the public exchequer as effectively as possible, they must not go further than is necessary for that purpose (judgment of 14 November 2024, Herdijk, C‑613/23, EU:C:2024:961, paragraph 24 and the case-law cited).
61In that regard, according to case-law, national measures which bring about a system of strict joint and several liability go beyond what is necessary to preserve the public exchequer’s rights. Imposing responsibility for paying VAT on a person other than the person liable to pay that tax, without allowing him or her to escape liability by providing proof that he or she had nothing whatsoever to do with the acts of the person liable to pay the tax must, therefore, be considered contrary to the principle of proportionality. It would clearly be disproportionate to hold that person unconditionally liable for the shortfall in tax caused by acts of a third party over which he or she has no influence whatsoever (judgment of 14 November 2024, Herdijk, C‑613/23, EU:C:2024:961, paragraph 25 and the case-law cited).
62Accordingly, exercise of the Member States’ power to designate a joint and several debtor other than the person liable for payment of the tax in order to ensure efficient collection of that tax must be justified by the factual and/or legal relationship between the two persons concerned in the light of the principles of legal certainty and of proportionality (judgment of 14 November 2024, Herdijk, C‑613/23, EU:C:2024:961, paragraph 26 and the case-law cited).
63The fact that a person other than the person liable to pay the tax acted in good faith, exhibiting all the due diligence of a circumspect trader, that he or she took every reasonable measure in his or her power and that his or her participation in abuse or fraud is excluded are points to be taken into account in deciding whether that person can be obliged to account for the VAT owed (judgment of 14 November 2024, Herdijk, C‑613/23, EU:C:2024:961, paragraph 27 and the case-law cited).
64In the present case, as can be seen from paragraphs 24 to 26 of the present judgment, the referring court explains that, under Polish law, Article 116 of the Tax Code provides for a system under which a member or former member of the board of directors of a company may be held liable for the tax debt of that company. To that end, first, the tax authorities must demonstrate that the following positive conditions are satisfied:– the company concerned has a tax debt resulting, in particular, from a tax decision establishing that liability in a binding manner;– that debt arose during the period in which that member or former member performed a management function;– enforcement against that company has been unsuccessful.
65Second, the member or former member of the board of directors of the company concerned may, for his or her part, prove that he or she satisfies the conditions for exemption from that liability, namely:– [he or she demonstrates] that an application for a declaration of insolvency has been filed in due time or that a decision to initiate restructuring proceedings or to approve an arrangement in the context of an insolvency plan has been issued at the same time, or– he or she demonstrates that the failure to file an application for a declaration of insolvency is not due to fault on his or her part, or– he or she identifies the assets of the company, the execution of which would make it possible to cover, to a large extent, the company’s tax arrears.
66It must be borne in mind that the referring court alone has jurisdiction to find and assess the facts in the main proceedings and to interpret and apply national law. However, the Court of Justice, which is called on to provide answers of use to that court in the context of the cooperation procedure established in Article 267 TFEU, may provide guidance to the latter based on the documents relating to the main proceedings and on the written observations which have been submitted to it, in order to enable the court in question to give judgment (judgment of 12 December 2024, Dranken Van Eetvelde, C‑331/23, EU:C:2024:1027, paragraphs 27 and 28 and the case-law cited).
67In that regard, as is apparent from the order for reference, one of the positive conditions for a member or former member of the board of directors of a company to incur joint and several liability for the tax debt of that company is that such a debt arose during the period in which that member or former member performed a management function within that company.
68It follows that, as can be seen from the case file before the Court, Polish law provides, in essence, for a presumption that a member of the board of directors of a company has, or should have, both direct knowledge of and influence over the activities of that company.
69Such a presumption does not appear, in itself, to be contrary to the principle of proportionality. It does not appear to establish strict liability.
70In that regard, it should be noted that fault may take different forms, including a lack of due care or supervisory negligence. In addition, it seems possible to infer from a company’s failure to discharge a tax debt that a member or former member of the board of directors of that company has failed to fulfil his or her duty of care in the management of that company’s affairs and that that failure to discharge the tax debt is the consequence thereof. Accordingly, the joint and several liability of that member or former member appears to result not from a fortuitous event over which he or she has no control, but from his or her actions or omissions.
71However, it is essential that a presumption such as that at issue in the main proceedings be rebuttable, in the sense that it is not practically impossible or excessively difficult for that member or former member to rebut that presumption with evidence to the contrary (see, to that effect, judgment of 14 November 2024, Herdijk, C‑613/23, EU:C:2024:961, paragraphs 33 and 41; see also, to that effect and by analogy, judgment of 12 December 2024, Dranken Van Eetvelde, C‑331/23, EU:C:2024:1027, paragraph 31).
72In the present case, it should be borne in mind that the presumption referred to in paragraph 68 of the present judgment may be rebutted by the member or former member of the board of directors of the company concerned. To that end, he or she may, in particular, demonstrate that he or she satisfies one of the conditions for exemption from joint and several liability, set out in Article 116(1)(1) of the Tax Code, namely:– that an application for a declaration of insolvency has been submitted in due time, or– that the failure to file such an application is not due to fault on his or her part.
73It follows from paragraph 27 of the present judgment that, according to the referring court, the expression ‘in due time’ in Article 116(1)(1)(a) of the Tax Code refers to the moment at which, by exercising reasonable diligence, the member or former member of the board of directors of the company concerned could have been aware of the fact that that company had become insolvent, that it had permanently ceased to pay its debts, and that its assets were not sufficient to discharge those debts.
74It must be held that the incurrence of a VAT debt at a given time does not, in itself, justify the filing of an application for a declaration of insolvency, even if the overall financial situation of the debtor company has deteriorated. Thus, the need to file an application for a declaration of insolvency could arise later, when that financial situation deteriorates further. Furthermore, it cannot be ruled out that, in the intervening time, a person who was then a member of the board of directors of that company has ceased to hold that office. However, such circumstances do not mean that the presumption referred to in paragraph 68 of the present judgment becomes irrebuttable. It remains open to that person to demonstrate that the failure to file an application for a declaration of insolvency in due time is not due to fault on his or her part, precisely because, as long as he or she performed his or her duties, the financial situation of the company concerned did not require such an application to be filed.
75In that regard, a member or former member of the board of directors of a company with a VAT debt must be able to rely on any circumstance capable of establishing that the failure to file an application for a declaration of insolvency in due time is not due to fault on his or her part. The possibility of such a demonstration should not be purely theoretical owing to an unduly broad interpretation of the concept of ‘attributability’ by the national authorities or courts (see, to that effect, judgment of 14 November 2024, Herdijk, C‑613/23, EU:C:2024:961, paragraph 36).
76In the present case, as can be seen from paragraph 28 of the present judgment, the referring court states that fault may be intentional or unintentional.
77However, it specifies that there is no fault if the member or former member of the board of directors of the company concerned shows that, while exercising due diligence in the conduct of his or her affairs, he or she did not file an application for a declaration of insolvency for reasons beyond his or her control.
78Therefore, it does not appear that the exemption provided for in Article 116(1)(1) of the Tax Code is purely theoretical.
79It follows that the principle of proportionality does not preclude a system such as that provided for in that provision.
80As regards the principle of equal treatment, to which the referring court has also referred, it should be borne in mind that that principle, which is enshrined in Articles 20 and 21 of the Charter, requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified. A difference in treatment is justified if it is based on an objective and reasonable criterion, that is, if the difference relates to a legally permitted aim pursued by the legislation in question, and it is proportionate to the aim pursued by the treatment (judgment of 24 February 2022, Glavna direktsia ‘Pozharna bezopasnost i zashtita na naselenieto’, C‑262/20, EU:C:2022:117, paragraph 58 and the case-law cited).
81It is therefore necessary to determine whether the fact that a company has only one creditor may lead to an unequal application of the condition, set out in Article 116(1)(1) of the Tax Code, for exemption of a member or former member of the board of directors of a company.
82In that regard, the referring court specifies that a member or former member of the board of directors of a company having more than one creditor has the possibility of being exempted from his or her joint and several liability for the debts of that company by filing an application for a declaration of insolvency. By contrast, a member or former member of the board of directors of a company having only one creditor does not have the possibility of ‘effectively’ filing such an application. Thus, according to the referring court, in that second scenario, that member or former member may be in a less favourable situation, without there being a justification for that unequal treatment.
83In that context, the referring court emphasises that, according to Polish practice and case-law, the fact that a company has not discharged its debt with regard to its only creditor does not relieve a member or former member of the board of directors of that company of his or her obligation to file an application for a declaration of insolvency.
84It must be borne in mind that, for the purposes of exempting a member or former member of the board of directors of a company from his or her joint and several liability, Article 116(1)(1) of the Tax Code provides, in particular, that an application for a declaration of insolvency is to be filed in due time, without making a distinction based on the number of creditors of the company concerned.
85Admittedly, the referring court notes that a member or former member of the board of directors of a company having only one creditor does not have the possibility of being exempted from his or her joint and several liability following the ‘effective’ filing of such an application, in particular on the ground that that application would be rejected by the court having jurisdiction in insolvency matters. However, it seems to follow from Article 116(1)(1) of the Tax Code that the mere filing of the application for a declaration of insolvency, and not the outcome of the proceedings initiated by the filing of that application, is sufficient for it to be considered that the member or former member of the board of directors of the company concerned has fulfilled his or her obligations under that provision, irrespective of the number of creditors of that company.
86In those circumstances, it does not appear that the application of Article 116(1)(1) of the Tax Code results in unequal treatment between:– the members or former members of the board of directors of a company having only one creditor, on the one hand, and– the members or former members of the board of directors of a company having more than one creditor, on the other.
87Furthermore, the referring court appears to consider, in essence, that, where a company has the public exchequer as its sole creditor, observance of the principle of equal treatment requires that the view be taken that the failure to file an application for a declaration of insolvency is not due to fault on the part of the members or former members of the board of directors of that company, on the ground that such an application would in any event have been rejected.
88It should be noted that if such a consideration were to be accepted, there would be unequal treatment between:– the members or former members of the board of directors of a company which, faced with a deterioration in the financial situation of that company likely to lead to its insolvency, would pay off the creditors equally and proportionately, whether they be private or public, on the one hand, and– the members or former members of the board of directors of a company who, in such a situation, would pay off all the creditors except for the public exchequer, on the other.
89The disadvantage would arise from the fact that, in the first scenario, those members or former members would be required to demonstrate that an application for a declaration of insolvency was filed in due time or that the failure to file such an application was not due to fault on their part. By contrast, in the second scenario, the fact that the public exchequer is the sole creditor would suffice for those members or former members to be exempted from their joint and several liability.
90The judicial creation of such a condition for exemption could encourage members of the board of directors of a company to ensure, where the financial situation of that company deteriorates to such an extent that it risks becoming insolvent, that the company has debts in respect of only one creditor, namely the public exchequer. That could lead to instances of misappropriation, to the detriment of the public exchequer, in so far as a company would fail to retain sufficient funds to discharge its VAT debt, but would use its funds for other purposes. Such a result would clearly run counter to the objective of ensuring the correct collection of VAT.
91Therefore, such unequal treatment cannot be justified.
92Accordingly, the principle of equal treatment would not be observed if a member or former member of the board of directors of a company having the public exchequer as its sole creditor were to be exempted from his or her joint and several liability for the VAT debt of that company on that ground alone.
93As for the principle of legal certainty, it must be borne in mind that, according to settled case-law, that principle requires that rules of law be clear and precise and that the application of those rules be predictable for individuals, especially where they may have negative consequences for individuals and undertakings. In particular, that principle requires that legislation enables those concerned to know precisely the extent of the obligations which are imposed on them, and that those persons are able to ascertain unequivocally what their rights and obligations are and take steps accordingly (judgment of 15 April 2021, Federazione nazionale delle imprese elettrotecniche ed elettroniche (Anie) and Others, C‑798/18 and C‑799/18, EU:C:2021:280, paragraph 41 and the case-law cited).
94The system provided for in Article 116 of the Tax Code is based on positive conditions, listed in paragraph 64 of the present judgment, and includes a possible exemption, under the conditions set out in paragraph 65 of the present judgment.
95The referring court does not submit that those positive conditions and that exemption are worded in such a manner as to exclude a member or former member of the board of directors of a company with a tax debt from foreseeing the circumstances in which his or her joint and several liability may be incurred.
96Consequently, it appears that the system provided for in Article 116 of the Tax Code is consistent with the principle of legal certainty.
97Regarding the right to property, it should be noted that, under Article 17(1) of the Charter, everyone has the right to own, use, dispose of and bequeath his or her lawfully acquired possessions. No one may be deprived of his or her possessions, except in the public interest and in the cases and under the conditions provided for by law, subject to fair compensation being paid in good time for their loss. The use of property may be regulated by law in so far as is necessary for the general interest.
98According to case-law, that right is not absolute and its exercise may be subject to restrictions justified by objectives of general interest pursued by the European Union (judgment of 10 September 2024, Neves 77 Solutions, C‑351/22, EU:C:2024:723, paragraph 85 and the case-law cited).
99However, in accordance with Article 52(1) of the Charter, any limitation on the exercise of the rights and freedoms recognised by the Charter must be provided for by law, respect the essence of those rights and freedoms and, subject to the principle of proportionality, be necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others.
100First of all, it follows from paragraph 96 of the present judgment that the system provided for in Article 116 of the Tax Code is consistent with the principle of legal certainty.
101Next, as has been stated in paragraph 79 of the present judgment, the principle of proportionality does not preclude that system. In addition, it should be added that that system makes it possible to strike a ‘fair balance’ between the demands of the public interest of the community and the requirements of the protection of the individual’s fundamental rights, resulting from the case-law of the European Court of Human Rights, to which the referring court has referred, as recalled in paragraph 35 of the present judgment.
102Lastly, it does not appear that the system provided for in Article 116 of the Tax Code undermines the essence of the right to property of the members or former members of the board of directors of a company with a VAT debt. Under the third positive condition which characterises that system, the personal assets of those members or former members may be affected only within the limit of the amount of that debt in respect of which enforcement previously carried out against the company concerned has been unsuccessful.
103In the light of all the foregoing considerations, the answer to the questions referred is that Article 273 of the VAT Directive, read in conjunction with Article 325 TFEU, as well as the right to property and the principles of equal treatment, proportionality and legal certainty, must be interpreted as not precluding a national system under which:– a member or former member of the board of directors of a company with a VAT debt is held jointly and severally liable with that company for tax arrears arising during his or her term of office,– that liability is limited to tax arrears, enforcement of which against that company has proved unsuccessful in whole or in part,– exemption from that liability depends, in particular, on proof adduced by the member or former member of the board of directors that an application for a declaration of insolvency in respect of that company has been filed in due time or that the failure to file that application is not due to fault on his or her part,in so far as that member or former member, in order to demonstrate that there was no such fault, may validly claim that he or she exercised all due diligence in the conduct of the affairs of the company concerned, it being specified that, for that purpose, that member or former member cannot merely claim that that company had the public exchequer as its sole creditor when its permanent insolvency was established.
Costs
104Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.
Operative part
On those grounds, the Court (Ninth Chamber) hereby rules: Article 273 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive (EU) 2018/1695 of 6 November 2018, read in conjunction with Article 325 TFEU, as well as the right to property and the principles of equal treatment, proportionality and legal certainty,must be interpreted as not precluding a national system under which:– a member or former member of the board of directors of a company with a value added tax debt is held jointly and severally liable with that company for tax arrears arising during his or her term of office,– that liability is limited to tax arrears, enforcement of which against that company has proved unsuccessful in whole or in part,– exemption from that liability depends, in particular, on proof adduced by the member or former member of the board of directors that an application for a declaration of insolvency in respect of that company has been filed in due time or that the failure to file that application is not due to fault on his or her part,in so far as that member or former member, in order to demonstrate that there was no such fault, may validly claim that he or she exercised all due diligence in the conduct of the affairs of the company concerned, it being specified that, for that purpose, that member or former member cannot merely claim that that company had the public exchequer as its sole creditor when its permanent insolvency was established.
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