Liability of the partner for tax arrears of the company

When considering the liability of shareholders (and former partners) for tax arrears of a passenger company, it is important to refer primarily to the content Article 115 Tax Ordinance (hereinafter: OP).

Under that provision:

section 1. A partnership of a civil, public, partnership and a subsidiary of a limited partnership or limited partnership shall be jointly and severally responsible for the company's tax arrears.

section 2. Provision section 1 it shall also apply to the liability of the former shareholder for tax arrears due to liabilities whose payment deadline expired at the time when he was a partner, and the arrears mentioned under Article 52 and Article 52a formed while he was a partner.

For tax liabilities arising under separate provisions after the company's dissolution, for tax arrears for liabilities whose payment deadline was after the company's dissolution, and for those arrears mentioned under Article 52 and Article 52a After the company is dissolved, the persons who are partners at the time of the company's dissolution are responsible.

section 3. (Repealed).

section 4. The decision on liability in question Under section 1, does not require prior decision-making on the matters in question under Article 108(2)(2), and the decision in those cases is taken in the decision on liability.

section 5. Provision section 4 shall also apply in the event of termination of the company.

Subject matter and scope

For categories of persons third covered by that provision (subject-range) include:

• partners of the following companies: civil, public, partnership, limited liability (except for a limited liability), limited liability (except for a shareholder) and
• former shareholders of the companies concerned Under point 1, except for the limited agent and shareholder.

As indicated in the letter in relation to the scope of the provision in question, the partner of the civil partnership, the public partnership and the subsidiary of the limited partnership or the non-shareholder limited partnership shall be jointly and severally liable to the company's entire assets and to the other shareholders for the company's tax arrears.

Since there are no exemptions as to the scope of the liability in question, it covers all the obligations in question under Article 107 OP[1]. Thus, in principle, the liability of the partner may extend not only to the tax arrears of the company, but also, for example, to interest on late tax arrears or costs of enforcement proceedings.

Despite point (e) the relative wording of the provision Article 115(1) PO, it is assumed in the doctrine that liability for tax arrears of a passenger company applies to a partner only when the execution of the company's assets proves to be wholly or partly ineffective[2].

Person's liability ruling third – the partnership's partner refers to the tax arrears incurred in the company at the time he was a partner. As is pointed out in the doctrine: (...) it is crucial to determine who was a partner at the time of the expiry of the deadline for payment of the tax liability and thus the tax arrears. However, only those persons who were shareholders at the time of the company's dissolution are liable for tax obligations. The recipients are all partners of the dissolved company[3].

With regard to a former partner, his responsibilities can be understood as being twofold.

After first, ex-partners are liable for tax arrears due to liabilities that were due at the time when they were partners, and this would mean that when the payment deadline, for example, of interest or enforcement costs occurred after the date on which those partners withdrew from the company, then they were not liable for them and that the liability of other partners for which that payment deadline would be valid is updated.

second the understanding would be that ex-partners are not only liable for tax arrears due to liabilities whose due date expired at the time they were partners, which would result in their liability for interest on those liabilities and enforcement costs on those liabilities by virtue of Article 107(2)(2)(4) The OP would always be updated as a consequence of responsibility for these obligations, regardless of when the deadline for their payment occurred, and no matter when they withdrew from the company.

As indicated in the literature: You should stand up for it. first the view that it is more related to linguistic interpretation Article 115(2) s.p. and takes into account the principle of strict interpretation of liability rules third[4].

Non-guilty liability cannot be limited by internal arrangements

The partnership is jointly and severally liable to the company and other shareholders for the company's tax arrears, regardless of whether it can be attributed to the company's tax arrears, or whether the company's tax arrears have occurred without its fault.

Since the liability of the partners is not based on the principle of guilt, it does not matter to determine the degree of contribution of the partner concerned to the tax arrears. This liability is of an objective nature (such as the WSA judgment in Warsaw dated 16 June 2004 reference no. III SA 447/03).

Furthermore, the liability of the shareholders of a partnership for the company's tax arrears cannot be abolished as a result of the conclusion of an agreement between the shareholders or as a result of any other legal act. Nor can it be on this road, in any way, modified responsibilities of individual partners (such as the judgement of the WSA in Kraków). dated 17 August 2017 reference no. I SA/Kr 176/17.

In addition, the fact that partners have entrusted a certain person with the conduct of commercial matters of the company does not relieve the shareholders of liability for the company's tax arrears (e.g. NSA judgment dated 6 December 2016 reference no. I FSK 688/15).

Importantly – as the NSA ruled in Warsaw in its judgment dated 1 September 2000 reference no. III SA 1456/99: The tax liability of the shareholders of a civil partnership for the tax arrears imposed on it shall not depend on the amount of contributions of the individual shareholders. This means that the tax authority can rule on the liability of the shareholder for the full amount of the company's backlog. Consequently, even a minimum share in a personal company, e.g. 1%, prescribes application Article 115 OP.

A dimensional decision – may be, but need not

The absence of a separate ‘dimensional’ decision vis-à-vis the company does not matter to issue a shareholder's liability for the tax arrears. Both cases can be settled in the shareholder's tax liability decision (persons third).

Therefore, the proceedings by the tax authority in relation to Article 115 OP consists of two parts. It combines, on the one hand, activities aimed at determining the company’s obligation and, on the other, activities aimed at issuing a decision on the partner’s liability for those obligations (e.g.

NSA judgment dated 21 January 2020 reference no. I FSK 1722/17).

The tax authority may avail itself of a pre-issued dimensional decision setting out the amount of the tax liability, and only in the absence of such a decision will the proceedings combine elements of dimensional proceedings and proceedings aimed at deciding on the person's liability third.

Moreover, the limitation period for a public company's tax liability may be interrupted or suspended, as opposed to the possibility of making a decision on the liability of a shareholder for the public company's tax arrears[5].

What is a joint and several liability in the context of a decision to a partner

The tax authority cannot choose which of the shareholders of the company will address the decision. Each of the shareholders of a dissolved public company has the advantage of the party, since the decision concerns its legal interest defined under Article 115 OP (e.g. WSA judgment in Warsaw) dated 11 May 2007 reference no. III SA/Wa 1679/06.

According to Article 91 Tax Ordinance, the provisions of the Civil Code for Civil Liability shall apply to joint liability for tax obligations.

The concept of joint and several liability has been regulated under Article 366 Civil code. According to section 1 that provision may be required by several debtors in such a way that the creditor may require all or part of the benefit from all the debtors together, from several of them or from each of them separately, and the satisfaction of the creditor by any of the debtors relieves the others (solidity of the debtors).

According to section 2 the provision in question, until the full satisfaction of the creditor, all the debtors of the solidarity houses remain obliged.

Consequently, as the NSA expressed in the judgment dated 19 May 2009 reference no. I FSK 1810/07: (…) This is the right to choose a debtor who is required to pay the benefit, but only after taking steps to ensure that each of the entities with a statutory tax obligation becomes a taxable person following the delivery of a tax-fixing decision.

It should be pointed out here that if a partner of a partnership died before issuing a tax liability decision as a person third, the tax liability in this respect cannot be imposed on its heirs, as this obligation does not pass on them as a result of inheritance (such as the NSA judgment of 29 January 2019 reference no. I FSK 228/17).

In summary

As you can see, analysis Article 115 Tax Ordinance leads to the conclusion that the tax liability of the partnership's partner includes a number of aspects to be taken into account, representing customers in the course of tax proceedings or proceedings concerning the liability of a person third.

A separate issue, not covered by this Article, is the liability of a shareholder of a capital company regulated under Article 116 Tax Ordinance. We have experience in serving taxpayers on all the above issues, so we invite you to use the services of our law firm.