Main objectives

Intergenerational succession, family foundations will also act as a vehicle for investment and reinvestment in the economy. This will be possible due to the favourable taxation rules for family foundations – a family foundation is subjectively exempt from corporate and personal income tax.

A Family Foundation (FR) is a legal entity and operates under the Family Foundation Act.

Who can establish a family foundation

Any natural person. Only an individual can be the founder

How to set up a Family Foundation (FR)

Creation of a foundation act – a declaration of formation of the FR with a notary public (name, registered office, purpose – collection of property and its multiplication for the benefit of beneficiaries, method of determining beneficiaries and their powers, duration), statutes, inventory of assets, contribution of funds before registration with the National Court Register. The confirmation of the establishment of the FR is the entry in the register of the FR.

The Foundation does not hold shares

Minimum capital 

Pursuant to Article 17 of the Family Foundation Act, the founder (founder) contributes property to the family foundation to cover the founding fund with a value specified in the statutes, a minimum of PLN 100,000. Initially, the founder contributes property to the family foundation to cover the founding fund, but the foundation can also be equipped with additional property after the founding fund has been covered.

For example, the following can be contributed to a family foundation: real estate, cash, shares and stocks, as well as personal property: holiday homes, a car, a yacht, art collections.


The contribution of assets is not subject to CIT/PIT at the time of equipping the family foundation with these assets. Regardless of the market value of such assets and the costs incurred by the contributor, no tax liability will arise.


Family foundation and other taxes

Entity exemption for family foundations is only provided for on income tax grounds. These foundations may be taxpayers of other taxes, e.g. value added tax (VAT) and tax on civil law transactions (PCC) according to general rules.

What activities a family foundation may carry out

Article 5 of the Foundation Act provides for a catalogue of the permitted business activities (within the meaning of the Business Law of 6 March 2018) of a family foundation. It includes:

  1. The disposal of property, provided that it has not been acquired solely for the purpose of further disposal;
  2. Renting, leasing, making property available for use on another basis;
  3. Participation in commercial companies, investment funds, cooperatives and similar entities;
  4. Acquisition and disposal of securities, derivatives and similar rights;
  5. Granting loans to certain related parties (capital companies in which the family foundation holds shares; partnerships in which the foundation participates as a partner; beneficiaries);
  6. Trading in foreign means of payment for the purpose of making payments;
  7. The operation of an agricultural holding;
  8. Forest management.

FR can do nothing more

Income generated from activities in the above catalogue benefits from CIT exemption. This creates opportunities for investment and reinvestment of funds. For example, a family foundation acquires a property, which it then rents for a certain period of time. It then sells it and with the proceeds buys another one – also for rent. All of these events will be CIT-neutral (assuming that the disposal of the property was not made solely for the purpose of further disposal).

Similarly, it will be tax-neutral for a family foundation to dispose of shares held in incorporated companies. This thus creates opportunities for the neutral sale of part/all of the business and the subsequent reinvestment of the funds

Payment of benefits to beneficiaries

In the course of the operation of a family foundation, benefit payments to bneficiaries may occur.

Tax consequences of the benefit payment – CIT for the founding companies – at the moment of transferring the benefit to a given person (beneficiary), at the level of the family foundation there arises income taxed with 15% CIT rate, corresponding to the value of this benefit.

Tax consequences of the benefit payment – PIT for individuals – as a rule, the benefit to the beneficiary is taxed with personal income tax at a rate of 15% and qualified as income from other sources.

However, an exemption is provided for beneficiaries belonging to the so-called ‘zero group’ under the Inheritance and Gift Tax Act (i.e. spouse, descendants, ascendants, siblings, stepchildren, stepfather, stepmother).

FR books

FR must be audited once every 4 years, keeps full books of account, prepares SF annually.

Liquidation of a family foundation

Tax consequences of surrendering property after liquidation of a family foundation – CIT – a family foundation will be able to be dissolved or liquidated in the cases set out in Chapter 11 of the AIF. The liquidation of the foundation may be tax costly. This is because it will be necessary to pay CIT on the market value of the liquidated property. It will only be possible to reduce the income by the tax value of the contributed property, which in practice means comparing the market value of the property as at the date of liquidation with the historical value (often there may be a large difference in value here). The aforementioned 15% CIT rate will apply to the taxation of the property.

Tax consequences of the surrender of property after the liquidation of the family foundation – PIT – on the surrender of property the rules analogous to the rules on the payment of a benefit will apply. This means that the person who receives the property will pay 15% PIT. Alternatively, individuals may benefit from preferential rates. At the level of personal income tax, the tax base will be the value of the property received, with no deductible expenses.


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