A family foundation is a legal entity introduced into Polish law in 2023. Its purpose is to secure, accumulate, and distribute assets for the benefit of the family. Legislators have limited the scope of business activities a family foundation can conduct. To the extent a foundation conducts its intended activities, it benefits from income tax exemption. If it conducts activities outside the permitted scope, not only does it not benefit from the exemption, but it must also pay a punitive tax rate of 25%.
One of the permitted activities for a family foundation is the rental and leasing of property. An exception, however, is the rental of a business, an organized part of a business, or assets used for the activities of the beneficiary, the founder, or an entity associated with them. In such a situation, the foundation will pay a 19% tax.
Short-term rental = 25% tax
Reading the regulations, everything seems clear. The problem arises when interpreting the term "lease." Tax authorities consider short-term leases to be non-tenancy. They rely on the custom that in the case of a (proper) lease, an agreement is concluded with the tenant, specifying the rights and obligations of each party, and a handover and acceptance protocol is prepared. A (proper) lease is concluded (customarily – according to the tax office) for a longer period, and settlements are made periodically. Another characteristic is the tenant's immutability. Short-term leases do not have these characteristics, and therefore, they are not permitted for family foundations. If they conduct such activities, they must pay 25% tax. This position is presented in tax interpretations, most recently on April 10, 2025, No. 0111-KDIB1-2.4010.71.2025.2.EJ.
Court's Position
The position expressed in tax rulings was challenged by the Administrative Court in Gdańsk in its judgment of June 19, 2024, case file I SA/Gd 219/24. The court found that the Family Foundation Act does not distinguish between short-term and long-term leases. While the former is not comprehensively regulated, the provisions on leases apply to short-term leases. In the Court's opinion, there is no basis for differentiating the tax consequences of leases and short-term leases for family foundations. Neither the Family Foundation Act nor the Income Tax Act stipulate that only leases are subject to tax exemption if an agreement specifying the rights and obligations of the parties has been concluded, a handover protocol has been prepared, and payments are made periodically. All leases, with the exceptions expressly provided for in the Act, will benefit from the exemption for family foundations.
The ruling is not final, and since its issuance, no tax ruling has been issued regarding short-term rentals. It is unclear whether it will change the approach of the National Tax Information Service.
Tax-free rental through an intermediary
Interestingly, while the tax office denies family foundations tax exemptions for short-term rentals, it confirms the right to exemption when the rental is made through an intermediary. The interpretation of May 21, 2025, 0111-KDIB1-2.4010.92.2025.1.BD, states that a family foundation renting an apartment to a company that will sublet it on a short-term basis will benefit from the tax exemption. The foundation will enter into a lease agreement with the company, and the rent will be paid monthly, although its amount will depend on the company's income from the short-term rental. It is irrelevant to the tax office that the effect is the same – the apartment will be used for short-term accommodation.
This article is for informational purposes only and does not constitute legal advice.
The law is current as of July 14, 2025.
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