Family foundation – draft changes published

What the proposed amendments entail:

1. A 36-month lock-up period relating to the tax-free disposal of assets contributed/transferred free of charge to the FR or acquired from a related party (including those purchased from a related party). Exemption from CIT on the sale only after 36 months (calculated from the end of the year in which the FR received/acquired the assets – in extreme cases, almost 4 years);

According to the draft, the above will apply to assets contributed, transferred or acquired by the FR after 31 August 2025.

1. Renting/leasing of residential property. CIT exemption only if the FR rents directly and exclusively for residential purposes; the burden of proof lies with the FR. Short-term rentals/accommodation services (e.g. hotels, guesthouses) are excluded from the exemption;
2. No CIT exemption for income from holdings in tax-transparent companies and certain other entities if they are not subject to CIT or are exempt from taxation;
3. The FR will be subject to the rules on controlled foreign companies (CFCs);
4. FR is subject to the rules on Exit Tax;
5. Hidden profits – broader scope. Loans granted to a wider range of related entities and the write-off or expiry of such loans are to be treated as hidden profits.

Timeline:

most changes from 1 January 2026; the lock-up will apply to assets acquired after 31 August 2025 (i.e. effectively from 1 September 2025).

What this means in practice

1. Sales of assets

• Tax-free only after 36 months – if the assets were contributed to the FR free of charge or acquired from a related party.
• The clock starts ticking from the end of the year of acquisition/contribution – in reality, this amounts to a 36–48-month ‘grace period’ depending on the transaction date.
• Note the dates: the new rules apply to property acquired after 31 August 2025 (not to assets acquired earlier).

Rental of residential property

• The CIT exemption applies only where the taxpayer lets the property directly (without agents or letting operators) and solely for residential purposes.
• Accommodation (short-term lets) and hotel/guesthouse operations – excluded from the exemption.
• The FR must prove that the conditions for the exemption are met (residential purpose, direct letting).

Structures involving related entities

• Income from shares in partnerships and certain exempt/non-taxable entities – not exempt.

Financing and loans

• Loans granted to beneficiaries/the founder/related entities (including those related to the FR) and their write-off/statute of limitations – hidden profits (taxation on the part of the FR).

CFCs and exit tax

• CFC income attributed to the FR – taxed on the FR side.
• The exit tax is to apply to the FR on the terms set out in the draft (change of tax regime/transfer of assets abroad).

Link to the draft amendments:

https://legislacja.rcl.gov.pl/projekt/12401555/katalog/13152704#13152704

Author

Mateusz Kowalski

Radca prawny, Senior Associate

I specialize in Polish tax law, particularly income taxes, as well as international tax law. My experience includes, among others. providing ongoing tax advisory services, preparing legal and tax opinions, drafting requests for individual interpretations, conducting tax reviews. I gained professional experience in Warsaw law firms.

View profile →