POLAND Trends and Developments Contributed by: Piotr Augustyniak, Nash Concept Ltd
availability of the regime to a taxpayer electing jointly with a family member, but prudent applicants will con - tinue to secure their position by way of an individual ruling before the election is made.
On 27 November 2025 the President of the Repub - lic vetoed the amending statute. The stated grounds are of more than episodic interest: when the family foundation was introduced, the legislator had given an assurance that the rules would remain stable for three years, and the imposition of less favourable rules upon foundations already endowed in reliance on the exist - ing law was held to offend the principle of the citizen’s trust in the State. The veto was returned to the Sejm, where the three-fifths majority required to override it is not currently in prospect. The practical consequence is that the 2023 regime continues to apply in 2026 without alteration. The matter is, however, unlikely to rest there. The Act itself mandates a review of its functioning after 22 May 2026, and it must be assumed that measures of a similar orientation will return in some form. Found - ers and boards are therefore well advised to conduct the affairs of existing foundations on the footing that a holding-period requirement and a narrowed rental exemption may yet be enacted: contemporaneous documentation of the succession purpose of con - tributions, and restraint in transactions with a short investment horizon, considerably reduce exposure both to future legislation and to the general anti-avoid - ance clause, which the Head of the National Revenue Administration has already applied to arrangements employing family foundations primarily for tax ends. Trusts and Foreign Structures Poland is not a party to the Hague Trusts Conven - tion and its civil law does not recognise the trust as an institution of domestic law. The fiscal treatment of foreign trusts and foundations is accordingly derived from provisions of general application: the rules on controlled foreign entities may attribute the income of a foreign foundation or trust to a Polish-resident founder or beneficiary, while distributions received by Polish residents raise unresolved questions at the boundary between income taxation and the tax on inheritances and donations. The availability since 2023 of a domestic foundation with a statutory and predictable regime has, in practice, resolved much of this uncertainty by substitution: structures previously anchored in Liechtenstein, Austria or the Channel Islands are increasingly re-domiciled into, or replicat - ed alongside, Polish family foundations, with foreign
The Family Foundation: an Attempted Recalibration and a Presidential Veto
The Act on the Family Foundation of 26 January 2023, in force since 22 May 2023, supplied Polish law with its first domestic vehicle for intergenerational succes - sion of a foundation-based nature. The essentials of the regime are by now familiar: the foundation enjoys a subjective exemption from corporate income tax within the scope of its permitted economic activity; tax of 15% arises upon the distribution of benefits to beneficiaries and upon so-called hidden profits; and beneficiaries belonging to the founder’s immediate family receive distributions free of personal income tax. Registrations before the registry court have grown continuously since the Act entered into force, and the family foundation has displaced foreign foundations and trusts as the default succession vehicle for Polish entrepreneurial families. In 2025 the Ministry of Finance sought to recalibrate the fiscal treatment of the institution. A draft pub - lished on 29 August 2025, enacted by Parliament on 17 October 2025, provided in particular for: • a 36-month holding period (a so-called lock-up), under which the disposal of assets contributed to, or acquired from related parties by, the foundation within 36 months would attract corporate income tax at 19%, applicable to assets contributed after 31 December 2025; • the confinement of the rental exemption to long- term residential letting, to the exclusion of short- term accommodation and commercial letting; • the taxation of income derived through fiscally transparent entities; • the extension to family foundations of the provi - sions on controlled foreign companies and on exit taxation; and • an enlargement of the catalogue of hidden profits, notably in respect of loans made to founders, ben - eficiaries and related parties.
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