So far, Polish entrepreneurs have been transferring their assets to foreign foundations. The purpose of the new regulations is to comprehensively strengthen the legal tools for conducting succession processes by adding to the Polish legal system an institution for collecting family property, allowing capital to be retained in the country for many generations and increasing the potential of domestic investments.
The draft act on the family foundation was adopted by the Sejm and the Senate, and on December 15, 2022, it was signed by the President. The act will come into force after three months from the date of its promulgation, which means that the first family foundations can be established in the first half of 2023.
The family foundation will manage the assets based on the assets provided by the founder or other persons, as well as the profits earned, assets acquired in exchange for assets already owned, etc. The basic task will also be to protect the assets owned against loss or decrease in value. This means that, apart from the founder himself, other persons (e.g. family members) and also third parties and legal persons will be able to contribute property to the foundation.
There will be a possibility of conducting business activity by the foundation, to a limited extent, which will allow for the full achievement of the goals that the foundation is intended to serve for generations, i.e. the possibility of selling property owned by the foundation, renting, leasing property, joining and participating in commercial companies, investment funds and other entities both in Poland and abroad, purchasing and selling securities, as well as granting loans to both companies in which the foundation is a partner and beneficiaries.
A family foundation will be jointly and severally liable with the founder for its obligations arising before its establishment (this also applies to the founder’s maintenance obligation). With the reservation, however, that the liability of the family foundation will be limited to the value of the property provided by the founder as at the time of purchase, and according to prices at the time the creditor is satisfied.
In terms of taxation:
- the acquisition of benefits and property by natural persons from a family foundation in connection with the dissolution of a family foundation will be subject to personal income tax, in the amount depending on the degree of kinship between the beneficiary and the founder (exemption in the case of the founder and relatives belonging to the so-called “zero group” in relation to the founder, specified in the Inheritance and Gift Tax Act, i.e. spouse, descendant, ascendant, stepchild, siblings, stepfather and stepmother; 15% for other persons). Only a part of such benefit or property acquired by the founder or a person belonging to the “zero group” in relation to the founder, corresponding to the current proportion appropriate for this founder, included in the inventory of assets, will be exempt from personal income tax;
- as a rule, the foundation will be exempt from income tax, i.e. also with regard to the widely understood capital gains (e.g. from the amounts received from renting real estate or dividends).
More in this category
The global taxation act will come into force in Poland on 1.01.2025
On 15.11.2024, the President signed into law the Act on Compensatory Taxation of Component Units of International and Domestic Groups. The Act implements into the Polish legal order the provisions of Council Directive (EU) 2022/2523 of 14.12.2022 on ensuring the...
Postponement of the deadline for the implementation of the mandatory national e-invoice system
When will the new implementation date be known? On 19.01.2024 the Minister of Finance announced that the KSeF system will not be implemented in 2024. As the reasons for his decision, the Minister of Finance pointed to errors detected in the operation of KSeF. Let us...
The national e-invoice system will become mandatory from july 1, 2024
On August 4, 2023, the President signed the Act of June 16, 2023 amending the Act on Goods and Services Tax and certain other acts, which provides for the mandatory National e-Invoice System (hereinafter referred to as "KSeF").Now the act is just waiting for...