The recently presented (29 August) government draft bill amending the Corporate Income Tax Act, which is currently at the stage of opinions and public consultations, introduces regulations significant from the perspective of the functioning of family foundations. The exemption of family foundations from corporate income tax is to be substantially limited. Planned changes concern, among others, the taxation of commercial and short-term leases as well as the disposal of assets. Importantly, despite the early stage of legislative works, certain amendments may affect assets already contributed to a family foundation.
 
Taxation of Commercial Lease
The main objective of the draft bill is to tighten the regulations regarding the taxation of family foundations. This is to be achieved, inter alia, by abolishing the exemption of family foundations from corporate income tax with respect to income derived from lease, tenancy, or similar agreements (including short-term lease, hotel, or guesthouse activities). Long-term lease for residential purposes carried out directly by a family foundation will continue to benefit from the exemption.
 
Tax-Free Disposal of Family Foundation Assets Only After 36 Months From Contribution
According to the explanatory memorandum to the draft bill, a common practice among entrepreneurs was contributing specific assets to a family foundation solely for the purpose of selling them without triggering tax liability. To put an end to such tax optimization practices, the government intends to introduce corporate income tax on revenues generated by a family foundation from the disposal of property contributed, gratuitously transferred, or acquired by the foundation, if the disposal takes place before the lapse of 36 months from the end of the calendar year in which the contribution, transfer, or acquisition occurred.
 
Taxation of Controlled Foreign Corporation Income
To prevent the transfer of profits through the use of family foundations to foreign tax jurisdictions, under the amended CIT regulations, profits generated by family foundations via controlled foreign corporations will be subject to taxation in Poland, under the same rules currently applicable to individuals and companies.
 
Taxation of Unrealised Gains (Exit Tax)
Family foundations are to be covered by the provisions on tax on unrealised gains (the so-called exit tax). In short, this means that the transfer of a family foundation’s assets abroad or a change in its tax residency would result in the obligation to pay tax on the increase in the value of assets, as if they had been disposed of. The aim of this measure is to prevent the transfer of a family foundation’s assets outside Poland without prior settlement of tax obligations.
 
Taxation of Income from Tax-Transparent Structures
The proposed wording of the provisions also excludes the possibility of applying tax exemption to revenues from participation in tax-transparent entities (and certain others) if such entities are not subject to income tax or enjoy an exemption from income tax on all of their income, regardless of the source. As a result, income derived from participation in tax-transparent entities (such as partnerships or funds) will be subject to taxation at the level of the family foundation.
 
Changes in the Catalogue of “Hidden Profits” of Family Foundations
The draft bill expands the catalogue of persons in relation to whom loans granted by a family foundation will be deemed “hidden profits.” Consequently, loans granted by a family foundation will be treated as hidden profits not only when made to a beneficiary (as is currently the case), but also when granted to the founder or natural persons related to the beneficiary, the founder, or the family foundation itself. Furthermore, written-off, expired, or unrecoverable receivables arising from such loans will also fall within the category of hidden profits.
 
Entry into Force – Rules on Non-Taxable Disposal of Assets to Apply Only to Property Contributed After 31 August 2025
The draft bill provides that it will enter into force on 1 January 2026. However, it also includes a transitional provision concerning the 36-month period during which the disposal of certain assets will not be exempt from corporate income tax. To prevent practices of artificially contributing assets to family foundations in anticipation of the upcoming changes, the government has decided that this period will also apply to assets contributed, transferred, or acquired by a family foundation after 31 August 2025.
 
This solution may come as a surprise to many individuals planning to contribute assets to a family foundation (even with the best succession-related intentions rather than for tax optimization) in the last four months of 2025. It is difficult to resist the impression that the Ministry’s action was fully deliberate, as the publication of the draft bill, which contains information that the proposed taxation rules are to apply to property acquired by a foundation after 31 August 2025, took place on Friday, 29 August 2025 (the last working day of August).
 
As a side note, it is worth mentioning that under the amendment to the Tax Ordinance, which is to enter into force on 1 January 2026, tax laws should be subject to a six-month vacatio legis. The currently initiated amendments to the CIT, however, are intended to take effect in less than four months.
 
Authors: Michał Krysik – Tax Advisor at SKP Law Firm, Tymoteusz Kwidziński – Paralegal at SKP Law Firm.