The draft amendment to the income tax laws announces significant changes to the tax regime for family foundations. The Ministry of Finance plans for the changes to take effect on January 1, 2027. The proposed solutions largely replicate those vetoed by the President in the previous draft. According to the Ministry, the primary goal of the changes is to prevent potential abuses. However, an analysis of the proposed provisions raises questions about the extent to which these proposals align with the original assumptions of the Polish family foundation regulation.
When drafting the Family Foundation Act, one of the key goals was to create a preferential legal and tax environment that would encourage Polish entrepreneurs to transfer assets from foreign succession structures, such as foundations in Liechtenstein or Austria, back to Poland. A key element of this incentive package was a lower, 15% income tax rate on benefits paid to beneficiaries, representing a clear preference over the standard 19%. While the proposed tax increase aligns taxation with general principles, in the context of repatriation objectives, it could significantly reduce the competitiveness of the Polish jurisdiction and impact the assessment of the stability of the regulatory environment.
Another issue requiring analysis is the planned exclusion of short-term rentals and commercial accommodation from the CIT exemption, by limiting the preference primarily to long-term rentals for residential purposes. This approach raises considerable doubts in the context of current market practice. Previous case law and tax interpretations have been inconsistent, and a significant portion of them, under the current legal framework, have classified short-term rentals as permitted business activities of foundations, covered by the subjective exemption. The introduction of a rigid exclusion resolves this issue to the detriment of taxpayers, disregarding the founders' legitimate expectations. Furthermore, a family foundation is intended to protect and effectively multiply family assets for future generations, and short-term rentals and real estate asset management are, in many cases, a justified and commercially viable form of capital formation.
Another disadvantage is the introduction of a 36-month asset "freezing" period, calculated from the end of the calendar year in which the contribution, transfer, or acquisition occurred. If the foundation disposes of its assets before this period expires, it loses its corporate income tax exemption, and its income will be taxed under general rules. This solution arbitrarily limits the foundation's liquidity and management flexibility. In a rapidly changing economy, the requirement to hold assets for longer than three years can lead to economic losses, preventing it from responding to market changes.
The proposed amendment also applies the regulations on controlled foreign entities to family foundations and the tax on income from unrealized profits. Furthermore, the list of hidden profits has been expanded to include loans granted to founders and related entities, as well as the value of receivables written off, expired, or written off as uncollectible. Furthermore, taxation of income from participation in tax-transparent entities has been added, which in many cases will paralyze the international investment structure of Polish family businesses.
A positive aspect of the proposed changes is the extension of the group of people exempt from PIT to include descendants of the founder's siblings, for example nieces and nephews, which better reflects the realities of multi-generational family relationships and facilitates joint succession planning by siblings.
The proposals presented by the Ministry of Finance aim to tighten the system, but impose restrictions on family foundations that could impact the performance of their core economic functions. Balancing the state's fiscal goals with the need to ensure attractive conditions for capital accumulation in Poland remains a key challenge during further legislative work.
This article is for informational purposes only and does not constitute legal advice.
The law is current as of August 31, 2026.
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