Family foundations – draft tax changes from 2026

The Ministry of Finance has published draft amendments to the Family Foundation Act, which are to come into force on January 1, 2026.

Key changes concerning family foundations

1. Taxation of the sale of assets within 36 months of acquisition
   The foundation will pay 19% CIT on income from the sale of property donated by the founder or acquired from a related entity, regardless of the nature of the investment. The exemption will only apply after 36 months from the end of the year in which the acquisition took place.

• • The change will only apply to assets acquired after August 31, 2025.
  • The sale of assets contributed to the foundation earlier should still be exempt, although the regulations do not explicitly state this.

2. Exclusion from the exemption of income from participation in tax transparent entities and entities exempt from CIT
   Income derived from tax transparent entities, as well as tax exempt one will be taxed with 19% CIT – if these entities carry out business activity.

• • The regulation may also cover Polish open-ended investment funds (FIO, SFIO) that are subjectively exempt from CIT.
  • There are no transitional provisions – the changes will also apply to existing investments.

3. CFC tax
   Family foundations are to be subject to the controlled foreign corporation (CFC) tax. That will make the foundations to pay the tax e.g. on the value of assets held indirectly via a holding company seated outside Poland or income earned by such non-Polish entity (even if that income will be transferred to Poland).

4. Short-term rentals outside the scope of exemption
   Income from the rental of residential premises for purposes other than residential (e.g., accommodation services) will be taxed.

Ministry of Finance justification for the taxation of family foundations

The ministry points out that the aim of the changes is to limit “aggressive tax optimization” and counteract circumvention of the law through the use of transparent companies or funds exempt from CIT. According to the Ministry of Finance, it is necessary to “tighten” the system and restore the principle of tax fairness.

Impact on family foundations

• • Less legal certainty – this is not the first change in the taxation of family foundations since the legislation was enacted, which is not desirable from the perspective of the stability and predictability of the succession vehicle.
  • Freezing of selected assets for 3 years or acceptance of the cost of income tax in the event of earlier disposal.
  • Risk of additional CIT – especially for investments in investment funds, holding companies, and transparent companies, unless their role is purely passive (no business activity).
  • CFC tax – complex regulations and the need for costly verifications, as well as the inability to reduce the CFC tax base by payments from a foreign company and the inability to credit CFC CIT towards the 15% CIT paid by a family foundation on the value of statutory benefits, may increase the foundation’s operating costs and affect its financial liquidity.

The proposed regulations will come into force on January 1, 2026 (with the proviso that the 36-month lock-up period will also apply to assets acquired from September 1, 2025). Family foundations and their founders therefore have limited time to analyze the structure of their assets and possibly adjust the way in which the family foundation manages its property.