Aggressive tax optimisation or transparent succession? Poland’s “family foundation”

Tax optimisation

Initially, family foundations in Poland benefited from favourable tax treatment, allowing effective management and transfer of family assets with significant tax exemptions on reinvested profits and certain rental incomes. This made them attractive not only for succession planning but also for aggressive tax optimisation. Founders frequently transferred assets to foundations to defer tax liabilities and used preferential corporate income tax regimes. The transfer of shares into a foundation before their sale was a common method to minimise immediate tax burdens. However, tax authorities recognised that foundations were in some cases used more as tools for tax benefits than genuine mechanisms for family wealth protection.

Curbing abuse

In response, Poland’s Ministry of Finance proposed significant legal changes aimed at limiting aggressive tax planning involving family foundations. These changes are scheduled to take effect from 01 January 2026. Key proposals (may) include:

• A mandatory three-year holding period (lock-up) for assets contributed to foundations to qualify for tax exemptions. Sales of assets transferred to the foundation before the expiry of this period would trigger immediate taxation.
• Exclusion of income from short-term and commercial rentals from tax exemptions.
• Application of Controlled Foreign Company (CFC) rules to tax income generated by foreign companies controlled by the foundation, regardless of profit distributions.
• Clarification that income earned through tax-transparent foreign entities, such as certain US LLCs, will be subject to Polish corporate income tax even without actual distributions.
• Introduction of an “exit tax” on transferring assets abroad to prevent erosion of the Polish tax base via offshore structures.

Auditing requirements

The reforms also emphasise stronger auditing requirements. Although periodic audits are currently required, the new rules may oblige foundations to undergo more frequent, or earlier, audits to ensure compliance with tax obligations, and proper asset management aligned with foundation documents and the law.

Conclusion

Family foundations have rapidly become a critical element in Polish family business structuring, addressing important needs in succession planning, asset management, and tax strategy. Their growing popularity reflects trust in the legal framework and the desire among Polish entrepreneurs to secure long-term stability for family assets. However, the proposed regulatory changes indicate a move towards limiting aggressive tax optimisation and enhancing transparency. As of the date of this article (17 November 2025), it is not known whether the proposed amendments will be introduced in 2026.

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Piotr Prokocki specialises in comprehensive services for mergers and acquisitions (M&A), and develops effective structures for financing transactions, capital withdrawal, and profit distribution.