The introduction of family foundations into the Polish system has attracted considerable interest, primarily due to the broad CIT exemption (Article 6(1)(25)). However, the practice of the Head of the National Revenue Administration shows that not every foundation structure will be accepted. In 2024–2025, a series of negative opinions on family foundations were issued, including DKP1.8082.3.2024, DKP1.8082.4.2024, DKP16.8082.14.2024). The conclusions from these decisions can be summarised in five practical “red flags”.
I will outline one of them, where the case concerned a plan to use a family foundation to sell shares in a tax-efficient manner.
Tax objective as the main motive
Ø The founders themselves indicated that if it were not for the Foundation’s CIT exemption and the tax neutrality of the sale, they would not have carried out the transaction in this form.
Ø This was sufficient to conclude that the tax benefit was the main purpose of the transaction.
Artificiality of the structure
Ø The Family Foundation acted as an intermediary and had no real economic justification.
Ø Profits in the company were deliberately retained for three years in order to later transfer them advantageously through the sale of shares to an investor via the Foundation.
Ø The head of the National Revenue Administration considered this to be a pre-planned tax mechanism rather than succession or long-term asset management.
Contradiction with the purpose of tax laws
Ø The Foundation was to be used not for family succession, but solely for a one-off sale of shares, which goes beyond the statutory scope of the Family Foundation’s activities (Article 5 of the Family Foundation Act).
Ø In the opinion of the authority, the action was contrary to:
– Articles 30b and 30h of the PIT Act (taxation of the sale of shares with PIT and solidarity tax),
– Article 6(1)(25) of the CIT Act (exemption for the Foundation, but not for transactions carried out “under the dictates” of the founders).
The decisive factor was that:
Ø The Foundation was treated as a tax vehicle (not a succession tool),
Ø The tax benefit was explicitly granted as the main objective,
Ø Artificiality and contradiction with the purpose of the statutes were demonstrated.
Therefore, the Head of the National Revenue Administration could not issue a positive opinion and referred to Article 119y § 2 of the Tax Ordinance → refusal.
The conclusions from these decisions can be summarised in five practical “red flags”.
1. Tax objective above all else
If the documentation and structure indicate that the main purpose of establishing a foundation is to avoid taxation (e.g. contributing shares just before the sale and quickly disposing of them in the foundation), the Head of the National Revenue Administration applies the GAAR clause and refuses to issue an opinion. This was emphasised in several refusals, pointing to the lack of real succession or protection objectives.
2. “Artificial” activities – an alarm signal
The Head of the National Revenue Administration draws attention to structures that have little economic logic and many technical elements for optimisation: quick contributions, short-term transfers of assets, lack of actual activity of the foundation apart from the sale of contributed assets. Such arrangements are classified as artificial.
3. “Off-catalogue” activities – 25% CIT instead of exemption
A foundation may only conduct activities within the scope of Article 5 of the Family Foundation Act. Going beyond this catalogue (e.g. classic trade in goods purchased solely for resale) means the application of a penalty rate of 25% CIT (Article 24r). The head of the National Revenue Administration consistently reminds of this risk.
4. Leasing to related parties – no exemption
Income from leasing to a beneficiary, founder or related company in which business activity is conducted does not benefit from the exemption (Article 6(8) CIT). The foundation must settle 19% CIT, although this tax may later be reduced by a 15% lump sum when benefits are paid (Article 24q(8)). The head of the National Revenue Administration accepts this mechanism, but warns that artificially transferring real estate solely to take advantage of the shield may be questioned.
5. Hidden profits and marketability of transactions
Payments “under the guise” (overstated rents, free benefits for beneficiaries, financing of private expenses) are treated as hidden profits and are subject to a 15% lump sum. The authorities require market documentation (rent benchmarks, cost agreements) to prevent the exemption from being challenged.
Practical conclusions
Ø The CIT exemption works, but under strict control – any deviation from the succession objective may be challenged by the tax authorities.
Ø Long-term residential leases to unrelated parties are a safe scenario – this is also confirmed by positive security opinions (e.g. DKP3.8082.5.2024).
Ø The greatest risk concerns “shortcut” contribution and sale transactions – especially when the foundation becomes only a tax vehicle.
Ø Market documentation and a transparent benefits policy are key to defending the exemption.
Summary
A family foundation remains an attractive tax and succession tool. However, the practice of the Head of the National Revenue Administration shows that “shortcut optimisations” will be rejected. The structure should be built on the basis of real family and business goals, well-documented marketability and in accordance with the catalogue of Article 5 of the Act. Otherwise, the risk of a protective opinion being refused (and, consequently, GAAR being applied) is very high.