Taxes of the family foundation and its beneficiaries – who pays, when and how much

Legal status: the provisions in force on 8 November 2026 and the act passed on 22 October 2026, which awaits the President's decision. Wherever I write about 2027, I mean this act. Current status: law monitor.

1. The foundation: exempt as long as it stays within the Act

A family foundation is subjectively exempt from corporate income tax (CIT) (Article 6(1)(25) of the CIT Act) within the scope of the activity permitted by Article 5 of the Family Foundation Act. In practice, this means that the foundation pays no tax when it:

• receives dividends from companies and sells shares;
• lets and leases real estate to third parties;
• invests in funds, securities and derivatives;
• grants loans to companies in which it holds shares, and to beneficiaries;
• sells assets, unless it acquired them solely in order to sell them.

Income from activities outside this catalogue – for example, trading in goods bought for resale – is taxed at a penalty rate of 25%. That is why the foundation does not run a business itself but is a shareholder in the company that does (more).

2. Tax "on exit": 15%, from 2027 19%

The foundation pays CIT in three situations: when it makes a distribution to a beneficiary or the founder, when it transfers assets on dissolution and when it confers a benefit that the Act treats as a hidden profit (Article 24q of the CIT Act). The rate is currently 15%. The act passed in October 2026 raises it to 19% from the foundation's first tax year beginning after 31 December 2026. What counts is the moment the distribution is paid or made available, not the year in which the foundation earned the money. A dividend received in 2025 and paid to a son in 2027 will be taxed at 19%.

The tax is borne by the foundation's assets, not by the amount the beneficiary receives.

3. The beneficiary: zero, 10 or 15 per cent

The PIT exemption works proportionally. Assets contributed by way of gift or inheritance by the founder's spouse, descendants, ascendants or siblings count as contributed by the founder; assets from other persons count as contributed by the foundation itself, and in that part the exemption does not apply (Article 28 of the Family Foundation Act). Where the founders are two unrelated persons, for example business partners, a distribution to one partner's son is exempt only in the part corresponding to the assets contributed by his father. That is why the inventory of assets and the question of who is formally the founder matter so much.

4. Example: a distribution of PLN 100,000

Simplification: the 2027 amounts assume that the act passed enters into force and that the foundation's tax year is the calendar year. Foundations with a different tax year apply the old rules until the end of the year that began before 2027.

5. Hidden profits – where mistakes are easiest

A hidden profit is a benefit that the foundation confers on the founder, a beneficiary or related parties outside a formal distribution. Typical examples from practice:

• a foundation flat occupied by a daughter rent-free or at below-market rent;
• an interest-free loan to a beneficiary or one without a realistic repayment plan;
• a foundation car used privately by the family;
• a family member's remuneration on the management board clearly above market level.

A hidden profit is taxed like a distribution. From 2027 the catalogue widens: a hidden profit will also include a loan to the founder or a related company not repaid on time, and a receivable from the founder, a beneficiary or a related party that is waived, becomes time-barred or is written off as uncollectable.

6. Contributing assets

As a rule, contributing assets to the foundation triggers no PIT, CIT, inheritance and gift tax or tax on civil-law transactions (PCC). Two traps:

• VAT – when you contribute items from a business, e.g. real estate recorded as a fixed asset, the transfer may be taxable.
• Holding period from 2027 – if the foundation sells assets contributed or transferred to it free of charge before two years have passed from the end of the year of contribution, the income from the sale will be taxed (new Article 6(8)(2) of the CIT Act). Assets contributed in 2027 – in January or in December – can be sold free of this tax on 1 January 2030 at the earliest. Assets contributed by the end of 2026 are not covered by the holding period, although the Ministry of Finance warns that the anti-avoidance rules still apply to artificial arrangements.

7. Rental, partnerships, foreign structures – from 2027

• Residential rental remains exempt only where the foundation lets directly and exclusively for residential purposes. Rental through an operator and units for short-term accommodation lose the exemption – also for property the foundation already holds.
• Tax-transparent partnerships (e.g. limited partnerships) – the exemption is lost for the part of the income that would not be exempt if the foundation earned it directly.
• CFC and exit tax – foundations become subject to the controlled foreign company rules and to the tax on unrealised gains.

Details and transitional provisions, including the window until the end of 2027 for the tax-free return of flats to their previous owner: law monitor.