Family Foundations
On 22 May 2023 the new provisions on a family foundation entered into force. They are intended to respond to the difficulties relating to the succession of enterprises in Poland. The family foundation, most of all, is to facilitate the continuity of business activity and the protection of the assets in the future, at the same time serving as a financial security e.g. for the closest family of the founder.
There are two entities within the family foundation, specifically:
- a founder who is a natural person setting up the foundation in the foundation deed or testament; and
- beneficiaries who may be natural persons, non-governmental organisations, as well as the founder himself. These are the entities that receive benefits from the foundation.
It should be pointed out that there is no obligation for family bonds to exist between the founder and the beneficiaries. However, they significantly influence the taxation method of the benefits paid out.
Is it possible for a foundation to carry out business activity?
The possibility of pursuing business by a family foundation has been limited in particular to the management over the assets. It may consist in, among other things, lease of a real estate, acquisition and disposal of securities and derivatives, as well of the rights of similar nature.
Taxation of family foundation
Below we present an outline of taxation of selected activities related to the family foundation:
Type of activity | Taxation |
Setting up a foundation | neutral in terms of CIT and PCC (tax on civil law transactions) |
Transfer of benefits onto the beneficiaries | 15% CIT |
Receipt of benefits by beneficiaries |
|
Income from permitted activity | CIT exempt |
Income from activity not stipulated for a family foundation | 25% CIT |
Family foundation audit
The provisions provide for a family foundation audit to be carried out every four (4) years, and in some cases - even annually. In particular, the audit shall cover the correctness and reliability of the asset management of the family foundation, the incurrence and fulfilment of commitments. The audit firm or team of auditors shall be appointed by the meeting of beneficiaries of the foundation. The team of auditors may be exclusively composed of an expert auditor, tax advisor, advocate and attorney-at-law. Moreover, an auditor must be independent of the foundation and must not participate in advisory processes for the foundation.
Should you have any questions regarding the family foundation or need our support in this regard, please feel free to contact TIAS Tax Department at:
office@tias.pl
Zobacz również
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Tax relief measures
Od 1 stycznia 2022 r. zarówno w podatku dochodowym od osób prawnych (CIT), jak i w podatku dochodowym od osób fizycznych (PIT) obowiązuje znacznie poszerzony katalog preferencji podatkowych. Obok już istniejących ulg pojawiło się wiele nowych. Dlatego też warto przeanalizować możliwość skorzystania z oszczędności podatkowych, jakie dają ulgi.
Restrictions related to application of the WHT preferences
As of January 2022, Poland finally implemented new regulations concerning the withholding tax (WHT). The aim of the changes was to impose new restrictions for application of the WHT preferences.
Introduction of the Global Minimum Tax in Poland (Pillar 2)
Starting January 1, 2025, regulations concerning the so-called global minimum tax (Pillar 2) are expected to come into effect in Poland.