On 29 August 2025 a draft bill amending the Corporate Income Tax (CIT) Act was published on the website of the Government Legislation Centre.
The draft focuses on curtailing the tax preferences that family foundations have enjoyed to date, and the proposed measures include, among others:
- clarification of the rules on the disposal of assets by a foundation,
- bringing foundations within the scope of the rules on controlled foreign companies (CFC) and exit tax,
- changes to the taxation of rental income (including short-term rentals), and
- an extension of the catalogue of “hidden profits”.
Below we discuss each of the issues covered by the draft.
Disposal of assets by family foundations – the end of freedom?
The Ministry of Finance proposes that, from 1 January 2026, the exemption from tax on the disposal of assets by a family foundation should be available only where the disposal takes place after the expiry of 3 years, counting from the end of the calendar year in which the assets in question were contributed, transferred or acquired.
Crucially, these rules are to apply to assets acquired by a foundation as early as after 31 August 2025. This change may prove particularly painful for those entities that had planned an asset restructuring for the second half of 2025.
Given the short interval between the publication of the draft (29 August 2025) and the cut-off date (31 August 2025), transitional arrangements are expected to be introduced (e.g. moving the cut-off date or extending the vacatio legis) to allow the management of family foundation assets to be planned rationally.
Family foundations, CFC and exit tax
The draft provides that the tax exemption for family foundations will NOT cover tax on:
- controlled foreign companies (CFC),
- unrealised gains (exit tax).
The aim of these changes is to limit the scope for shifting assets and income to entities in preferentially taxed jurisdictions and to curb potential practices leading to the avoidance of CIT in Poland.
Short-term rentals and accommodation services – new restrictions
Revenue earned by a family foundation from rental, lease or other agreements of a similar nature relating to residential buildings, mixed-use buildings, residential premises or parts thereof is to be excluded from the exemption, unless they are let directly by the family foundation exclusively for residential purposes.
This is to apply in particular to revenue from short-term rentals and from accommodation-related services.
It is worth noting that the burden of proving that a given building, premises or part thereof is let exclusively for residential purposes will rest with the family foundation. In practice, this means that the foundation must hold documentation and evidence confirming the nature of the rental if it wishes to demonstrate that the rental is exclusively residential in character.
To date, the Provincial Administrative Courts have held unequivocally that there are no grounds for differentiating the tax consequences of rental within a family foundation solely on the basis of the duration of the agreement. Even if short-term rental is not a “classic” rental, it still falls within the statutory concept of “making assets available for use on another basis” (e.g. WSA judgments, case nos. I SA/Gd 219/24, I SA/Wr 807/24 and I SA/Bd 107/25).
You can read more about this in our article:
Family foundations and short-term rentals – courts side with taxpayers
Hidden profits – an extended catalogue and a greater burden
The draft also provides for the following changes to the catalogue of hidden profits (taxed at the 15% CIT rate):
- widening the circle of parties to whom the granting of loans by a family foundation will constitute a hidden profit (not only a beneficiary, but also the founder and individuals related to a beneficiary or the founder),
- including in the catalogue of hidden profits the value of receivables under loans granted by a family foundation that have been waived, have become time-barred or have been written off as uncollectible.
The above applies to loans granted by a family foundation:
- to the extent that they fell due for repayment in a given tax year and were not repaid by the deadline for the family foundation to file its tax return,
- for a term of at least 10 years, or for a term shorter than 10 years where the ultimate term of the agreement amounted to at least 10 years.
Transparent entities, funds, cooperatives – no exemptions
The draft also excludes the application of the exemptions to revenue from participation in tax-transparent entities, as well as in other entities (e.g. funds, cooperatives or commercial companies) where these are not subject to income tax or enjoy an exemption from that tax on all of their income, irrespective of its source.
The aim is, among other things, to prevent transparent entities from being used to generate preferential tax outcomes on the part of the family foundation.
Summary
The published draft contains no changes favourable to family foundations. On the contrary – the proposed regulations are designed to tighten the system and will, in practice, limit flexibility in wealth management. They concern both the rules on the disposal of assets and the scope of the tax exemptions. At this stage, much suggests that the bill could materially change the way family foundations operate in Poland. It is therefore worth considering now how the proposed changes would affect existing structures, and preparing for possible adjustments to the wealth-management model.
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