A family foundation in 2026 – who it makes sense for, how it is taxed and what it costs
When a family foundation pays off, how it is taxed (15% CIT on benefits paid to beneficiaries), what it costs to set up and run, and what the alternatives are. A practical guide.
The family foundation has existed in Poland since 22 May 2023, introduced by the Act of 26 January 2023. It is an instrument that combines an attractive CIT rate of 15% with organisational requirements and running costs.
This article explains how the foundation is taxed, who it still makes sense for, and what its real alternatives are. We describe the general rules – check the details of the provisions before you make a decision.
What a family foundation is
A family foundation is a legal entity (not a company), created by a founder, whose purpose is to accumulate and manage family assets for the benefit of beneficiaries. The construction is modelled on the German Familienstiftung and the Austrian Privatstiftung – typical tools for protecting the assets of multi-generational families.
Key features:
- Legal personality – the foundation is an independent entity, with assets separate from the founder’s assets
- Beneficiaries – the people who receive benefits from the foundation (usually family members)
- The founder – the person who sets up the foundation (may also be a beneficiary)
- The foundation board – manages day to day, usually the founder and trusted people
- The supervisory board – oversight (compulsory above 25 beneficiaries)
Changes in the rules – check the current position
Taxation – how the 15% CIT works
The key rule: the foundation itself is exempt from CIT (Article 6(1) point 25 of the CIT Act) on income from activity falling within the catalogue of Article 5 of the Family Foundation Act. That income includes:
- Disposal of property – selling shares, real estate, movable property
- Rental, lease – renting out real estate and movable property
- Holding shares in companies – dividends, profits from partnerships and capital companies
- Bonds and deposits – bank interest and interest on debt securities
- Securities – gains from trading in shares and stock
- Loans granted – interest on loans to its own companies
The foundation starts paying tax only when it pays a benefit to a beneficiary – then 15% CIT. From the beneficiary’s point of view the benefit is exempt from PIT (Article 21(1) point 157 of the PIT Act), so this is the real, final rate.
The 25% penalty rate – a warning
Activity of the foundation going beyond the catalogue of Article 5 is subject to CIT at 25% (Article 24r of the CIT Act). Examples of activity outside the catalogue:
- Trade in goods (retail, wholesale)
- Services (consulting, construction services, IT)
- Production
- Tourism services
If the foundation carries on such activity, it pays the penalty CIT of 25% on the income it earns from it. What is more, it loses the exemption for all income if activity outside the catalogue exceeds certain thresholds.
In practice foundations work as holding companies – they hold shares in operating companies that carry on the business activity. The foundation receives dividends and disposes of them.
Who it makes sense for
A family foundation is a tool for families with assets – with a multi-generational plan. Typical profiles for which a foundation can make sense:
| Profile | Situation | Benefit | |--------|----------|---------| | A business owner | 3 children of different ages and interests | Keeping the business in the family, dividing benefits, not assets | | An investor | Real estate + shares + ETFs | One management centre, tax optimisation | | A group of companies | Operating companies + real estate | A family holding, separating the spheres | | A multi-generational family | Grandparents + children + grandchildren | Long-term succession of assets |
Who it does NOT make sense for
A foundation is a cost – not only a tax cost, but above all an operating one (bookkeeping, audit, board).
- Sole trader (JDG) owners with modest business assets – a limited company (sp. z o.o.) or a limited partnership is better
- Stock market investors with a small portfolio – a classic brokerage account is enough
- Families without a succession plan – a foundation requires a long-term plan
Alternatives
For families that have not yet “grown into” a family foundation but are looking for asset protection:
- A holding of capital companies – a limited company (sp. z o.o.) with shares in other companies, a simpler start
- A foreign trust – in a jurisdiction with trust law – expensive, but flexible
- A will + succession management – for smaller assets, cheaper
- Managed gifts – passing assets to children during one’s lifetime, while keeping control
Not all the options are equivalent for tax – a foreign trust may be subject to CFC rules (controlled foreign company), which eat up the benefits.
The procedure for setting up
- Needs analysis – consultation with a legal and a tax adviser, at least 1 month
- Draft statute – sets out the purpose, the catalogue of beneficiaries and the rules for benefits
- Notarial deed – establishing the foundation before a notary
- Contributing the fund – at least PLN 100,000 (cash or assets in kind)
- Entry in the register – the Register of Family Foundations at the Regional Court in Piotrkow Trybunalski
- Obtaining a NIP and a REGON (tax identification and statistical business numbers)
- Starting activity – opening an account, contributing further assets
Summary
A family foundation is a tool for wealthy families with a multi-generational plan, not for day-to-day “optimisation”. The decision to set one up is worth discussing with a tax adviser or a lawyer. An accounting firm keeps the books and prepares returns, but tax advice and opinions are provided by tax advisers and legal advisers (in line with the Tax Advisory Act). See our full bookkeeping service and the articles on converting a sole trader business into a company and on business succession.
Sources: the Act of 26 January 2023 on the family foundation (Journal of Laws 2023, item 326), Articles 24q and 24r of the CIT Act, gov.pl/web/fundacja-rodzinna.