Severe tightening of the responsibility of collective entities (including companies) for general and fiscal offences | TAX Alert

The Ministry of Justice presented its draft of the new regulations tightening the principles of responsibility of collective entities, including commercial partnerships (both corporations and partnerships) for general and fiscal offences. According to the Ministry of Justice’s proposals, a collective entity shall be able to suffer a severe fine for any offence committed not only by any member of its organization, but also an employee or even a counterparty.

A vital change is the intention to make a collective entity responsible without the previous judgment pronounced against the natural person who committed the respective offence.

While making a decision on the responsibility of a collective entity, the court will be able to impose a fine from PLN 30,000 to 30,000,000. In special cases, the court will be allowed to go as far as to dissolve or liquidate the collective entity and, as a result, the company’s assets shall be transferred to the State Treasury. The draft includes a wide range of penal measures such as:

• property forfeiture,
• closing of a company branch,
• prohibition to use subsidies or subventions,
• prohibition to apply for public contracts,
• prohibition to run business activities of a specific type.

The factor which shall enable a collective entity to avoid the aforementioned responsibility will be to prove that all of the bodies and individuals authorized to act on behalf or in the interests of the collective entity acted with due diligence required under specific circumstances for organization of the entity’s activities and supervision over those activities. The burden of proof with this respect shall however lie on the collective entity.

If the draft becomes effective as it is, effective internal procedures regarding the organization and supervision over the organization of each company’s activities which help it to demonstrate the observance of due diligence shall be of particular importance.

If you are interested in discussing the impact of the new regulations on your business as well as in the possibilities to implement in your organization adequate solutions which make it possible to limit the risk of your company’s responsibility under the new regulations, you are invited to contact us.

Patrycja Goździowska – Partner, Tax Advisor