On August 29, 2025, the Ministry of Finance unveiled a draft amendment to the Polish Corporate Income Tax Act that will introduce new rules for taxing family foundations. Only recently politicians had been promising stability and predictability in the system. Today, however, we are faced with a tightening package. In practice, it means fewer tax exemptions and more obligations. What is more, some provisions will apply retroactively, covering transactions carried out as early as September 1, 2025.

Limits on tax exemptions

The draft points to two main directions of change, namely a narrowing of the general exemption for family foundations and a broader catalogue of events that will trigger corporate income tax.

Although the overarching principle of exemption remains, the list of exceptions will grow considerably. One major area is short-term rentals. Income from renting out a building, apartment, or part thereof on a short-term basis without a residential purpose will no longer qualify for exemption. In practical terms, this spells the end of the tax-favoured Airbnb and aparthotel model for foundations.

Another significant change concerns the sale of assets. A foundation will now pay tax if it sells property received as a gift from the founder or acquired from a related party, provided less than three years have passed since the end of the calendar year in which the property was acquired. In other words, lawmakers are introducing a holding period which – most controversially – will cover assets contributed from September 1, 2025 onwards, even though the new rules formally take effect on January 1, 2026.

A broader definition of hidden profits

The amendment also expands the concept of hidden profits. Until now, taxation applied mainly to loans granted to beneficiaries if they were not repaid on time, or loans issued for at least 10 years. The new rules cast a wider net, namely loans to founders and persons related to the foundation, the founder, or a beneficiary will now fall within this regime.

Hidden profit will also include the value of loans that are written off, time-barred, or deemed uncollectable.

Consequences for family foundations

The consequences are clear: fewer exemptions, greater tax risk in transactions with founders and beneficiaries, and additional evidentiary burdens for long-term leases. All of this may cool enthusiasm for family foundations as a convenient succession planning tool.

When do the changes take effect?

As a rule, the new regulations will apply from January 1, 2026. However, for assets contributed or acquired after August 31, 2025, the three-year holding period will already apply.

This means that a foundation receiving a gift from its founder today will not be able to sell it tax-free until three full years have passed from the end of the calendar year in which it was acquired.

Is there a way forward?

While the draft paints a restrictive picture, it does not necessarily mean that family foundations will lose all their appeal. With careful planning – especially during the transition period – it may still be possible to mitigate some of the adverse effects of the amendment. Now is the time to take a closer look at the assets intended for contribution and consider the right strategy for managing them.