A new solution for Polish entrepreneurs was enacted by the Sejm (Lower Chamber of the Polish Parliament). The Polish Family Foundation is closer to coming into force than ever before. We will have a look at the basic assumptions of the Act on the family foundation.

The idea of implementing an institution into the Polish legal and tax system, which would be an attractive alternative for Polish entrepreneurs to foreign solutions in the field of structural planning, has existed for a long time. However, only at the end of 2022, did the Sejm pass the Act on the family foundation. As a result, the Polish legal order will receive a solution providing Polish entrepreneurs with new opportunities in the field of succession planning.

General assumptions of the Polish family foundation

The new solutions are intended for entrepreneurs running family businesses who would like to properly plan their succession. In order to avoid the organizational chaos associated with inheritance proceedings, entrepreneurs have long been looking for solutions to organize these matters, without prejudice to the business they run. 

According to the basic assumptions of the new draft Act, the family foundation is a separate legal entity that was established to accumulate property, manage it in the interest of the beneficiaries and to provide benefits to the beneficiaries.

In this context, a family foundation may conduct business activity, although its scope is limited by law to:

  1. the disposal of property, unless the property was acquired solely for the purpose of further disposal;
  2. renting, leasing or making the property available for use on any other basis;
  3. joining and participation in commercial companies, investment funds, cooperatives and entities of a similar nature having their headquarters domestically or abroad, as well as holding shares in these companies, funds, co-operatives and entities; 
  4. the acquisition and disposal of securities, derivatives and rights of a similar nature;
  5. granting loans:
  6. to capital companies in which a family foundation holds shares,
  7. to partnerships in which the family foundation participates as a shareholder,
  8. to the beneficiaries;
  9. the trade in foreign means of payment belonging to the family foundation in order to make payments related to the activities of the family foundation;
  10. running a business as part of a farm or agricultural holding.

The founder of a family foundation may only be a natural person, but the foundation may have more than one founder, unless it is established in a will. The law also allows for such a possibility, however in such a case there can be only one founder.

In addition to establishing a family foundation, the main role of the founder is also to contribute assets to it, which cannot be worth less than PLN 100,000 and, as a rule, they should not be non-refundable.

The founding act of the foundation defines its beneficiaries, which may be both natural persons and non-governmental organizations conducting registered charity activities, in accordance with separate regulations. Importantly, the founder themselves may also be a beneficiary.

The beneficiary of a family foundation receives the right to the benefits specified in its rules and regulations, but also has the right to inspect the entire documentation of the foundation. Moreover, the beneficiary may be entitled to participate in the assembly of beneficiaries. It is one of the statutory bodies of the family foundation, alongside the management board and the supervisory board. The assembly of the beneficiaries of a family foundation performs control and supervision functions over the operations of the foundation and deals with matters such as the examination and approval of the foundation’s financial statement, granting discharge to the members of the management board, or the distribution of the foundation’s financial result.

The tax issues of the Polish family foundation

The basic tax issue for a family foundation is the fact that the receipt of any benefits from the family foundation, including the ones received as part of its dissolution or liquidation, is not subject to the inheritance and donations tax. In this respect, we are not dealing with a tax exemption, as in the case of donations, but with the exclusion of such benefits from the regulations governing the inheritance and donations tax, i.e., there is no need to meet any additional conditions (including notification of the tax office).

In terms of personal income tax, both the founder and persons belonging to the so-called “0” tax group in relation to the founder for the purposes of the inheritance and donations tax are exempt from the taxation of benefits received upon the dissolution of the foundation. The group “0” is a spouse, ascendants, descendants, stepchild, siblings, stepfather and stepmother.

A similar exemption applies to the beneficiaries who receive benefits due to them from a family foundation if they remain within the same “0” group in relation to the founder.

At the same time, the above-mentioned benefits received by persons outside the “0” group in relation to the founder are subject to taxation at a fixed rate of 15%.

From the perspective of a family foundation, it is exempt from the taxation of the activity conducted by it, with the exception of activities that go beyond its permissible scope under the Act on the family foundation. The activities being outside this scope will be taxed at a CIT rate of 25%.

At the same time, however, a new tax was introduced, to which the family foundation is subject, separate from the basic CIT regulations. The value of the benefit or property transferred or left at the disposal, as a result of providing benefits to beneficiaries and other persons, as well as the dissolution and liquidation of the foundation, is subject to taxation. The tax rate in this respect is 15%.

In view of the above, a new tax on family foundations was introduced into the corporate income tax system, which is in fact a wealth tax. The taxable amount depends directly on the value of the assets (left after dissolution or liquidation or transferred through the provision of the benefits from the foundation). It is a questionable solution in terms of legislative correctness and consistency of the tax system in Poland, although not the only one with such characteristics, implemented recently by the legislator.


The Act on the family foundation was approved by the Sejm and is currently at the stage of further legislative process in the Senate. 

As I mentioned at the beginning, the family foundation is a solution that has been awaited in Poland for a long time. Nevertheless, the manner of preparing the Act, the general nature of its provisions, and in particular the lack of consistency with the Polish tax system raises many concerns. It remains to be hoped that in the course of further legislative work, legislative shortcomings will be refined, and entrepreneurs will soon be able to use an effective and efficient tool for business succession planning and asset management without having to seek it abroad.