A new regulation in Poland explained: family foundations and their taxation
The purpose of a family foundation, which is a new structure for Poland, is to accumulate wealth and manage it in the interest of the beneficiaries.
As a rule, a foundation is exempt from corporate income tax (CIT) unless it carries on business which is not allowed. In that case, the profit will be subject to 25% CIT. This rate is significantly higher than the basic income tax rates (9%/19%), which unequivocally confirms its punitive nature.
In the remaining permitted scope, a family foundation will pay income tax only in relation to distributions to the beneficiaries. So until the assets are managed and if there is no distribution, there is no tax. Distribution triggers 15% CIT on the market value of the distribution, which may be in cash or in kind. If the distribution is made to close family members or to the founder, there is no personal income tax (PIT). If the distribution is made outside this group, 10% or 15% PIT is imposed.
Regardless of this, the foundation will be subject to the 0.035% wealth tax levied on buildings with a total value exceeding PLN 10 million (approximately $2.4 million) if they are rented by the foundation.
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