Changes to the taxation of family foundations are scheduled to take effect in 2026. The bill, prepared by the Ministry of Finance, has generated considerable controversy, particularly in the context of limiting foundations' freedom in managing their assets. A key element is the introduction of a so-called asset lock-up, but the new regulations also cover other important tax areas.
Paweł Turek, attorney, tax advisor, and partner at BTTP, points out that the 36-month lock-up is an "absurd" solution because it prevents foundations from selling assets at the most favorable market moment, even when they are at historic highs. In his opinion, this approach contradicts the very nature of a family foundation, whose mission is to build and protect assets for future generations. He also criticizes the inconsistency of this solution with other tax regulations—a 36-month lock-up (and in practice, up to 47) month does not align with the 24-month deadlines for holding shares in order to benefit from the dividend payment exemption specified in the bill's justification. He also argues that the proposal contains a retroactive element—it applies the lock-up to assets transferred from September 1, 2025, even though the regulations are not scheduled to take effect until January 1, 2026. He emphasizes that regulations limiting taxpayers' rights to reduced rates or tax exemptions cannot be applied retroactively. In his opinion, this is another example of how unstable tax law can be in Poland. He adds that if the bill on taxing family foundations is enacted in this form, its greatest beneficiaries will undoubtedly be foreign foundations and trusts.
What else is worth paying attention to:
• The three-year lock-up applies to assets contributed, transferred free of charge, or acquired from related entities. Sales during the lock-up period result in a 19% corporate income tax (CIT). However, the foundation will be able to deduct this tax (from premature exit) from the 15% corporate income tax it collects when distributing funds to beneficiaries.
• Due to the way the lock-up is calculated, the actual period of restrictions may reach up to almost 4 years.
• The CIT exemption will apply only to long-term rentals of apartments for residential purposes – short-term rentals, the provision of accommodation services (e.g., as part of daily apartments or so-called condo hotels), rentals for business or commercial purposes – will be subject to CIT. Income from any type of commercial property rental will continue to be exempt from CIT.
• Income generated by a family foundation through tax-transparent entities, such as partnerships, is to be taxed.
• Foundations will be covered by the provisions on CFC, exit tax and an extended catalogue of hidden profits of family foundations (forgiven, expired, uncollectible loans).
• The legislative schedule assumes that the regulations will enter into force on 1 January 2026 and will cover assets retroactively from September 2025, which requires urgent reactions from interested parties.
Are you ready for these changes? How will they impact investment flexibility and asset protection within family foundation structures? Learn how to prepare for the new regulations and avoid potential tax pitfalls.
We invite you to read the full article, which will dispel any doubts: https://businessinsider.com.pl/prawo/podatki/fundacja-rodzinna-projekt-zmian-w-podatkach-od-2026-r-budzi-kontrowersje/k96d6x7
