Joint and several liability of a tax representative – judgment of the General Court of the European Union

The General Court of the European Union[1] examined whether a tax representative may be held jointly and severally liable with the taxable person for the payment of VAT where the representative’s role is limited to filing VAT returns and paying the tax. Although the case concerned Greek tax legislation, similar provisions are contained in the Polish VAT Act. Accordingly, the General Court’s judgment of 8 July 2026 in Case T-356/25, Rapera, is also of considerable relevance to Polish entities acting as tax representatives.

Background to Case T-356/25

The case concerned the Italian company O, which was engaged in the pulp trade and also carried on business in Greece, where it was registered for VAT purposes. The company’s VAT compliance in Greece was handled by its tax representative, the Greek customs agency AY. Acting on behalf of company O, AY filed VAT returns, represented the company before the tax and customs authorities, and made VAT payments. However, it did not maintain the company’s accounting records, issue its accounting documents, or participate in its operational activities.

Following a tax audit covering the years 2020–2022, the Greek tax authority identified VAT arrears of approximately EUR 3.3 million and held that AY, as the company’s tax representative, could also be held liable for their payment. AY challenged that position, arguing that it had performed only formal VAT-related obligations and had not participated in company O’s business activities. Having doubts as to whether the Greek legislation was compatible with the VAT Directive, the national court referred a request for a preliminary ruling to the General Court of the European Union. In particular, the General Court was asked to determine whether a tax representative performing exclusively formal VAT compliance obligations may be regarded as a person liable for payment of VAT, or held liable for the VAT arrears of a foreign taxable person, despite having no involvement in that person’s economic activity.

Tax representative according to the General Court

AY challenged its classification as company O’s tax representative already at the stage of appealing against the decision of the Greek tax authority.

Against that background, the General Court of the European Union first examined the concept of a “tax representative” referred to in Article 204 of the VAT Directive. It is this provision that allows Member States to designate a tax representative as the person liable for payment of VAT. The General Court held that Member States may introduce legislation under which a tax representative is regarded as a person liable for payment of VAT on the basis of an assessment of the nature of the activities performed by that representative:

„Although the VAT Directive does not lay down criteria for classifying a tax representative as a person liable for payment of VAT on the basis, inter alia, of the nature of the activities carried out on behalf of his or her principal, it also does not preclude national legislation from providing that that classification is based on an assessment of the nature of those activities. Indeed, it is for the Member States to lay down the conditions and procedures of such an appointment, which necessarily entails determining its scope in their national legislation.”

Moreover, the General Court held that Member States may regard a tax representative as a person liable for payment of VAT even where that representative does not participate in the transactions carried out by the represented entity, provided that the taxable person has designated that representative as the person liable for such payment. According to the Court, the opposite approach could undermine the effectiveness of tax collection.

Joint and several liability according to the General Court of the European Union

The General Court also addressed the situation of tax representatives who:

• are not designated as persons liable for payment of VAT;
• are merely responsible for fulfilling VAT reporting obligations on behalf of a taxable person established in another Member State;
• do not maintain accounting records or issue accounting documents relating to the transactions carried out by that taxable person.

With regard to such entities, the General Court held that — where neither the tax authority nor the competent court is empowered to verify whether the entity concerned was involved in the taxable person’s economic activity and had influence over, or knowledge of, the taxable person’s actions or omissions – it would be disproportionate for that entity to bear joint and several liability for payment of that VAT.

The General Court also stated that, if a given entity (a tax representative) is regarded as a person liable for payment of VAT under Article 204 of the VAT Directive, that entity cannot at the same time bear joint and several liability for payment of that tax.

Significance of the judgment in Case T-356/25 for Polish taxpayers

Under Polish legislation, a tax representative “is jointly and severally liable with the taxable person for the tax liability settled by the tax representative on behalf and for the benefit of that taxable person” (Article 18c(2) of the Polish VAT Act).

Therefore, under the Polish VAT Act, regardless of the extent of its involvement in the taxable person’s business activity, a tax representative bears joint and several liability for the tax liability settled on behalf and for the benefit of the taxable person. It therefore appears that the General Court’s judgment in Case T-356/25, Rapera, may provide tax representatives with an opportunity to avoid joint and several liability under Article 18c(2) of the VAT Act (provided that they have not been designated by the taxable person as persons liable for payment of VAT).

The key conclusion for Polish entities arising from the General Court’s judgment is therefore as follows: Under the principle of proportionality, joint and several liability cannot be imposed automatically on an entity that merely files VAT returns and performs formal administrative obligations, without verifying whether that entity was involved in the taxable person’s activity, whether it knew or should have known that VAT had not been paid, and whether it acted in good faith.

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[1] The General Court of the European Union now has jurisdiction to rule in VAT cases instead of the Court of Justice of the European Union (CJEU).