Business insights

Family foundations in Poland in 2027: proposed tax changes for distributions, rent and asset sales

Przemysław Szot 28.10.2026

Ilustracja koncepcyjna w stylistyce Tax Legal Partner.

Planning a Polish family foundation’s taxes for 2027 requires distinguishing income from assets, the sale of those assets and distributions to beneficiaries. The pending legislation changes rules at each stage. Foundations holding residential property, planning to sell recently contributed assets or regularly funding family needs should review their arrangements particularly carefully.

Distribution tax: proposed increase from 15% to 19%

The Sejm text would raise the tax under Article 24q of the Polish Corporate Income Tax Act from 15% to 19%. It covers benefits transferred or made available to beneficiaries, property distributed on dissolution and hidden profits. It does not impose a single 19% rate on every receipt of the foundation.

A budget should show separately what the beneficiary receives and the tax paid by the foundation. The beneficiary’s personal income tax is a separate assessment, including their relationship to the founder and the proportion of property attributed to individual founders. Proposed Article 21(1)(157) and (49) of the Polish PIT Act would extend the family exemption, including descendants of siblings and stepchildren. A family relationship alone does not replace the required proportion calculation.

Budget example. On a distribution tax base of PLN 100,000, the foundation’s tax is PLN 15,000 at 15%, compared with PLN 19,000 at the proposed rate. The PLN 4,000 difference concerns this distribution and this tax alone. It is not a complete calculation of the foundation’s and beneficiary’s combined liabilities.

Residential letting: actual use will matter

Proposed Article 6(8)(1)(b) and (c) of the CIT Act would not remove the exemption for every residential letting. The dwelling must be let directly by the foundation and exclusively for residential purposes. The foundation would bear the burden of establishing that condition.

Review operator agreements, short-term accommodation and arrangements involving an onward letting. A contract’s title does not determine the tax outcome. Evidence is needed about actual use, the parties to the settlement and the operator’s rights. The proposal also covers other premises intended for round-the-clock accommodation.

Loss of an exemption must also be distinguished from carrying on activities outside the foundation’s legally permitted business scope. These are different tax grounds. It would be incorrect to assign the 25% rate automatically to every problematic receipt.

Contributed assets: two years from the end of the contribution year

Proposed Article 6(8)(2) would exclude the exemption on a sale of property contributed or transferred free of charge to the foundation before two years have elapsed from the end of the calendar year of contribution or transfer. This is longer than 24 months after the agreement.

Date example. For shares contributed in March 2027, the two-year period measured from that year-end would expire on 31 December 2029. A sale from 1 January 2030 would fall outside this particular restriction. That would not establish compliance with all other exemption conditions.

Article 3(2)(1) of the amending bill links this test to property contributed or transferred from the foundation’s tax year beginning after 31 December 2026. Do not treat the whole existing portfolio as subject to a new waiting period without checking the relevant dates.

Loans and foreign investments also need a review

The bill includes changes concerning controlled foreign companies, exit taxation and income from fiscally transparent entities. The Senate clarified the last category and exceptions for certain investments. Its amendment does not remove the proposed distribution-tax increase or the rental and asset-sale changes.

The definition of loans and receivables treated as hidden profits also changes. The governing body should examine repayment dates, extensions and debts waived or written off. Signing a loan agreement before 2027 does not by itself determine the treatment of subsequent events.

Why the government proposes narrower preferences

In the explanatory memorandum to print 3148, the government refers to the review required by Article 143 of the Polish Family Foundation Act. It identifies the use of foundations for rapid sales of contributed assets and current business operations instead of long-term succession. It also justifies the distribution-tax increase by comparing taxation of an individual’s and a foundation’s passive income. These are the proposer’s arguments; they do not mean that every foundation acts contrary to the statutory purpose.

The practical implication is to document purpose and chronology. Succession plans, distribution policies and evidence of how dwellings are used should reflect actual arrangements. The new two-year test would not replace other exemption conditions. Loans require a separate review against proposed Article 24q(1a)(5)–(7), including due dates, actual repayment and subsequent waiver or write-off.

What to prepare before deciding on foundation assets

An asset register showing dates, acquisition titles and planned sale dates.
Letting and operator agreements, with evidence of residential use.
A beneficiary distribution plan with separate CIT and PIT calculations.
A record of loans, repayment dates and related-party receivables.
The foundation’s tax-year dates and a budget scenario for the proposed rules.

A non-calendar tax year requires a separate commencement analysis. The bill also provides a limited transitional arrangement for returning certain residential properties to their former owners. This is not a general entitlement to withdraw any asset tax-free.

Family-foundation property, rental and benefits: how does KIS tax them?

Does selling previously rented property trigger CIT for a family foundation?

In the ruling of 24 September 2026, 0111-KDIB1-2.4010.342.2026.1.END, KIS accepted an exemption for the sale of a co-ownership interest in real estate. The founder had rented out the property, contributed the interest to the foundation, and the foundation continued renting before selling to unrelated individuals. Rental income was a real acquisition purpose: the asset was not acquired exclusively for resale. The analysis applied Article 5(1)(1) of the Family Foundation Act and Article 6(1)(25) and (7) of the CIT Act.

The rental history explained the outcome. The asset generated genuine rental income before and after its contribution, so a later sale did not turn its original purpose into acquisition exclusively for resale. Rental agreements and actual asset management therefore matter when assessing a planned disposal.

Short-term rental by a family foundation: why did the CIT exemption cause a dispute?

The ruling of 2 September 2026, 0111-KDIB1-3.4010.662.2023.13.AN, concerned apartments donated to a foundation. KIS initially refused the exemption. Following court judgments, it accepted the described rental as permitted activity under Article 5(1)(2), exempt from CIT rather than subject to Article 24r’s 25% rate. The separate related-party business-use exclusion in Article 6(8) did not apply to the stated facts.

The dispute concerned whether the short duration itself moved the activity outside permitted rental. Following litigation, KIS accepted the rental described. The practical distinction concerns what the customer buys: use of premises or a wider package of accommodation services. The content of the service explains its tax treatment.

Free accommodation from a family foundation: how is the beneficiary’s PIT calculated?

In the ruling of 10 June 2026, 0114-KDIP2-1.4011.18.2026.3.KS, a house was made available to the founders and its running costs were paid. The founders were spouses; beneficiaries also included their daughters. KIS accepted the PIT exemption given the specified family relationships and contribution proportions. The starting point was nevertheless non-cash benefit income under PIT Article 20(1g), followed by the exemption in Article 21(1)(157)(b) and (49). The question concerned beneficiaries’ PIT. It did not establish that the foundation owed no CIT.

The analysis first identified the benefit and then applied the exemption. Use of the house and payment of its running costs created a benefit without a cash transfer to the family. Family relationship and contribution proportions determined its exempt part; the foundation’s CIT is assessed separately.

Does a family foundation deduct its CIT from the beneficiary’s payment?

The ruling of 20 May 2026, 0111-KDIB1-2.4010.133.2026.1.EKB, confirms that the foundation bears CIT on the benefit rather than subtracting it from the benefit’s value. KIS accepted the stated accounting reclassification of donations as part of the facts, but expressly did not decide whether that reclassification or distribution of the resulting profit was lawful.

The budget has two outflows: the benefit and the foundation’s own CIT on its value. Funding must cover both. The donation reclassification formed part of the stated facts, whereas KIS answered the tax calculation question. The payment itself also needs a basis in the foundation documents and accounts.

Family-foundation short-term rental and property sales in court

In its final judgment of 18 February 2026, II FSK 1010/25, the Supreme Administrative Court (NSA) dismissed KIS’s cassation appeal. Buying apartments to rent for ten years and subsequently sell was permitted activity. Planning an eventual sale did not eliminate the genuine rental purpose. Ten years was a fact of the case, not a minimum holding period imposed by the court. The judgment does not decide the proposed separate test for sales of contributed assets received free of charge.

In the short-term rental dispute, the Gdańsk Provincial Administrative Court (WSA) quashed the ruling on 19 June 2024, I SA/Gd 219/24. The NSA dismissed the authority’s cassation appeal on 16 January 2026, II FSK 1136/24, making the first judgment final. This procedural history and implementation of both judgments are recorded in the reissued official KIS ruling. A future statutory restriction can still alter the treatment prospectively despite a favourable result under earlier law.

The final Warsaw WSA judgment of 5 December 2024, III SA/Wa 2232/24, concerned contributed profit rights under participatory loans. The court quashed the ruling because KIS had failed first to establish whether receiving the proceeds constituted economic activity at all. Rights to decide on the investment were relevant. A ruling quashed because of defective examination is not a blanket tax exemption for participatory loans. Financing requires review of the contract, the parties and, separately, hidden-profit rules.

PLN 200,000 benefit: foundation CIT and beneficiary PIT

Our illustrative model uses no client data. A foundation validly grants a PLN 200,000 cash benefit. Assume no other settlement affecting the calculation and a beneficiary whose entire benefit meets the present PIT-exemption conditions, including the relevant contribution proportion. Merely describing someone as close family is insufficient.

Identical benefit: current settlement and proposed scenario
Item	Current: 15%	Proposal: 19%
Beneficiary’s benefit	PLN 200,000	PLN 200,000
Foundation CIT on benefit	PLN 30,000	PLN 38,000
Cash for benefit and CIT	PLN 230,000	PLN 238,000

The difference is PLN 8,000 for the same benefit. In the current column PIT is zero only because of the assumed exemption conditions. The proposed column isolates the CIT increase assuming the beneficiary remains fully exempt. Multiple founders, more distant family relationships and benefits in kind require separate contribution-proportion and valuation work. Budget for tax even where the foundation provides use of assets instead of cash.

These rulings and judgments identify present risks.

Questions from business owners

Will a family foundation lose its entire CIT exemption?

The pending bill contains specific exclusions and an increase in tax on certain distributions. Examine the income category, transaction and transitional provisions.

Would 19% replace the beneficiary’s PIT?

No. The foundation’s tax and the beneficiary’s personal tax are separate. A PIT exemption has its own conditions.

Should residential property be sold or withdrawn immediately?

An announced change alone does not justify that decision. Compare tax scenarios with succession objectives, transaction costs and the final legislation.

For a contribution or a change to rental arrangements, discuss the sequence of events and tax scenarios with TLP.

Family foundations and succession planning

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Starting points for our discussion

An asset register showing dates, acquisition titles and planned sale dates.
Letting and operator agreements, with evidence of residential use.

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Sources and scope

This article concerns Polish law and documents available on 31 October 2026. All examples are hypothetical. Actual amounts and consequences depend on the transaction documents and transitional provisions.