Family foundation – the CIT exemption does not cover all revenue or all payments

A founder usually asks whether a family foundation (fundacja rodzinna) really pays no tax. It pays none on what the Act allows it to do, and only until it passes assets to the family. The CIT exemption has three limits: the catalogue of permitted activities, letting to the family’s businesses and benefits for beneficiaries. We show where the tax authority draws them, how much a payment to different beneficiaries costs and what to check before assets are contributed.

The subjective exemption (zwolnienie podmiotowe) and its limits

A family foundation does not pay CIT as an entity, but the exceptions to the exemption cover the most important flows of money in a foundation.

Article 6(1)(25) of the CIT Act (ustawa o CIT) reads: “A family foundation is exempt from tax” (translation by the author); the Act also applies to a family foundation in organisation (Article 4a(36)). Three exclusions matter most in practice. Under Article 6(6), the exemption does not cover the tax under Article 24b (on revenue from buildings) or the tax under Article 24q. Under Article 6(7), it does not cover activity outside Article 5 of the Family Foundation Act (ustawa o fundacji rodzinnej). Under Article 6(8), it does not cover the letting of assets used in the business activity of a beneficiary, the founder or a related entity. In an individual tax ruling of the Director of the National Revenue Information Service (Dyrektor Krajowej Informacji Skarbowej, the Director of the KIS) of 1 December 2025, no. 0111-KDIB1-2.4010.471.2025.2.EJ, the authority described this as a rule with exceptions. The foundation “as a rule, benefits from the subjective exemption”, and “Exceptions to this rule are provided for in Article 6(6)–(9) of the CIT Act”.

Revenue and payments of a family foundation for CIT purposes (as at 29 September 2026)

Assign each planned item of revenue and each payment to one of the rows before the foundation signs its first agreement.

The Article 5 catalogue and the 25% rate

The catalogue of a foundation’s activities is closed, and the authority reads it literally – an activity that the provision does not name loses the exemption.

Article 5(1) of the Family Foundation Act permits business activity within the meaning of Article 3 of the Entrepreneurs’ Law (Prawo przedsiębiorców) “only within the scope” of eight categories. They cover the disposal of assets not acquired solely for the purpose of further disposal, letting and usufructuary lease (dzierżawa), participation in companies, funds and cooperatives, and trading in securities and derivatives. The list goes on to name loans to companies in which the foundation participates and to beneficiaries, currency trading for the purposes of the foundation’s payments, certain agricultural processing and forestry. The proviso on acquisition for the purpose of further disposal does not apply to rights arising from participation in companies and funds or to securities and derivatives (Article 5(3)).

Outside the catalogue, the tax rate under Article 19 “is 25% of the tax base” (Article 24r(1) of the CIT Act). The foundation then does not apply the exemptions and deductions under Articles 17–18f (paragraph 3), and it allocates costs under Article 15(2), applied accordingly (paragraph 2). The foundation does not apply the 9% rate at all (Article 19(1b)). Hypothetical example: PLN 100,000 of income from the resale of premises bought for that purpose gives PLN 100,000 × 25% = PLN 25,000 of tax.

The ruling of 1 December 2025 cited above illustrates the strict interpretation. The case concerned the contribution to the foundation of receivables under loans granted by the founder to a related company. The authority held the contribution to be neutral but the interest to be income outside the exemption, because “The acquisition of loan receivables is not the same event as the granting of loans”. It cited the final judgment of the Provincial Administrative Court (Wojewódzki Sąd Administracyjny, WSA) in Kraków of 19 April 2024, case ref. I SA/Kr 245/24, in which the assignment of loan receivables to a foundation was not treated as the granting of a loan.

The authority may argue that a provision establishing an exemption requires strict interpretation. In our view, this does not settle disputes over activities expressly named in the provision, but for activities that are not named, assume the literal wording of Article 5(1). Carry on operating activity in a company in which the foundation is a shareholder, and if in doubt, apply for a ruling before starting the activity.

Short-term letting and letting to related entities

Letting falls within the catalogue, but two further questions decide the exemption: whether it is still letting, and to whom and for what purpose the foundation lets.

Article 6(8) of the CIT Act excludes from the exemption revenue from letting, usufructuary lease or a similar agreement “the subject of which is an enterprise, an organised part of an enterprise or assets used for the carrying on of business activity by a beneficiary, the founder or a related entity”. Whether entities are related is assessed under Article 11a(1)(4) of the CIT Act, with a shareholding of at least 5%.

On short-term letting, the rulings diverge. In a ruling of 8 May 2025, no. 0111-KDIB1-2.4010.148.2025.2.MK, the authority held that “activity consisting in the short-term letting of residences cannot be regarded as falling within the scope set out in Article 5(1)(2) of the Family Foundation Act”. It named as the features of letting a formalised agreement, a longer term, periodic settlements and a permanent tenant. In another case, the WSA in Gdańsk, by a judgment of 19 June 2024, case ref. I SA/Gd 219/24, set aside the authority’s negative ruling. By a judgment of 16 January 2026, case ref. II FSK 1136/24, the Supreme Administrative Court (Naczelny Sąd Administracyjny, NSA) dismissed the authority’s cassation appeal. Giving effect to those judgments, the authority issued a ruling of 2 September 2026, no. 0111-KDIB1-3.4010.662.2023.13.AN. It stated that “the activity described in the application, consisting in the short-term letting of premises, can be regarded as falling within the scope set out in Article 5(1)(2) of the Family Foundation Act”.

The authority may argue that a judgment is binding only in the case in which it was given – it made that reservation in the ruling of 8 May 2025. That is correct, and only a ruling of your own gives protection under Articles 14k–14nb of the Tax Ordinance (Ordynacja podatkowa). Before starting short-term letting, apply for one and describe the model exactly as it will be operated.

Letting to related entities for their business activity remains within the catalogue but loses the exemption. In a ruling of 14 November 2025, no. 0111-KDIB1-2.4010.480.2025.1.END, the authority held that “the letting of the Property to related entities cannot be regarded as activity going beyond the permitted activity of the foundation referred to in Article 5(1) of the Family Foundation Act. Consequently, the 25% tax rate will not apply”. The income is subject to the 19% rate. The tax paid may later reduce the tax on benefits, up to the amount of the tax due, provided that the liability has not become time-barred (Article 24q(8) and (9)). Hypothetical example: the income from letting a hall to the founder’s company is PLN 200,000, and the tax is PLN 200,000 × 19% = PLN 38,000. On later benefits of PLN 300,000, the tax is PLN 300,000 × 15% = PLN 45,000, and after the reduction PLN 45,000 − PLN 38,000 = PLN 7,000.

With such letting, there is also no depreciation on the value contributed by the founder. In a ruling of 1 July 2025, no. 0111-KDIB1-2.4010.177.2025.1.END, the authority held that “depreciation write-offs on real properties contributed to cover the founding fund of the Family Foundation cannot constitute tax-deductible costs” (Article 16(1)(63)(a) of the CIT Act). Before the agreement is signed, establish the tenant’s relationships and the intended use of the property let.

Benefits: the foundation pays the 15%, not the beneficiary

The tax on a benefit is borne by the foundation on top of the amount of the benefit, and it arises when the benefit is provided or made available.

Article 24q(1) of the CIT Act covers a benefit referred to in Article 2(2) of the Family Foundation Act, assets transferred in connection with the dissolution of the foundation, and hidden profits. The tax “is 15% of the tax base”, and the base is the value of the benefit or of the assets (paragraph 2). A benefit also includes a thing handed over to a beneficiary for use, e.g., a flat without rent. The tax is paid by the 20th day of the month following the month in which the benefit is provided or made available (paragraph 6). The annual return is filed by the end of the third month of the following year (Article 24s(1)).

In a ruling of 1 July 2025, no. 0111-KDIB1-2.4010.267.2025.2.AK, the authority confirmed: “The income tax under Article 24q(1)(1) of the CIT Act is therefore borne by the foundation’s assets, not by the value of the benefit paid to the Beneficiary.” A benefit of PLN 100,000 therefore requires PLN 115,000: PLN 100,000 for the beneficiary and PLN 100,000 × 15% = PLN 15,000 of tax. The tax represents PLN 15,000 / PLN 115,000 = 13.04% of the foundation’s funds. State in the management board resolution the day on which the benefit is made available, because the deadline may run from that day even if the transfer is made later.

The beneficiary’s PIT: exemption within the limits of the proportion

The founder’s immediate family pay no PIT only on the part of a benefit corresponding to the proportion of assets contributed by the founder; beyond that part, the foundation withholds 10% or 15%.

Under Article 20(1g) of the PIT Act (ustawa o PIT), a benefit is revenue from other sources. The exemption under Article 21(1)(157)(b) covers the founder and the persons referred to in Article 4a(1) of the Inheritance and Gift Tax Act (ustawa o podatku od spadków i darowizn): the spouse, descendants, ascendants, stepchild, siblings, stepfather and stepmother. However, it applies only to the part of the revenue corresponding to the proportion under Article 27(4) of the Family Foundation Act as at the day the revenue is earned (Article 21(49)). Outside the exemption, the rate is 10% for persons in tax group I or II on the part corresponding to the proportion, and 15% to the remaining extent (Article 30(1)(17)). In a ruling of 12 May 2026, no. 0114-KDIP3-1.4011.328.2026.1.EC, the authority indicated that the foundation “as a rule, performs the function of a remitter” (Article 41(4) of the PIT Act).

The proportion is determined on each contribution of assets (Article 29(2) of the Family Foundation Act). Assets received by way of gift or inheritance from the founder or the founder’s spouse, descendants, ascendants or siblings count as contributed by the founder. Those received from other persons count as contributed by the foundation (Article 28(2)). In a ruling of 5 November 2025, no. 0113-KDIPT2-3.4011.662.2025.3.PR, the authority stated: “The profits earned by the Foundation therefore have no effect on the determination of the proportion.” In the ruling of 12 May 2026, in turn, it held that a founder who is in a relationship referred to in Article 4a with the other founder “may aggregate the proportion of the value of the assets” contributed by both. The authority held benefits for the founders after their marriage and for the child of one of them to be exempt in full.

Cash benefit of PLN 100,000 – cost to the foundation and net amount (hypothetical example; all assets contributed by the founder)

If 20% of the assets were contributed by a family friend by way of gift (Article 28(2)(2)), the founder’s proportion is 80%. On the part of the benefit outside the proportion, the son will pay PLN 20,000 × 15% = PLN 3,000. The authority may argue that the exemption for immediate family is not automatically full – and it is right, because that is what Article 21(49) provides. Before each payment, check the proportion in the inventory of assets and the beneficiary’s relationship with each founder.

Contribution of assets: income taxes, PCC and VAT

As a rule, contributing assets to a foundation is neutral for income taxes and PCC, but for VAT its effect depends on whether the founder contributes the asset as a taxpayer.

In a ruling of 17 September 2025, no. 0113-KDIPT2-3.4011.555.2025.5.JŚ, the authority indicated that “in return for the assets contributed to the family foundation, the founder receives no equivalent whatsoever”. The contribution of real property is therefore neither a disposal for consideration (Article 10(1)(8) of the PIT Act) nor a contribution in kind (Article 17(1)(9)), because a foundation is not a company. Nor does the foundation pay tax, because the exceptions to the exemption do not cover “events consisting in the contribution of assets to a family foundation” (ruling of 1 December 2025). The PCC Act (ustawa o PCC) lists taxable transactions in a closed catalogue (Article 1(1)). A foundation does not enter into articles of association (point 1(k)), and a gift is taxed only to the extent that the donee assumes debts and encumbrances or obligations of the donor (point 1(d)). Therefore, assess separately the assumption of the founder’s bank credit or obligations and any other agreements with the foundation.

For VAT purposes, under Article 7(2) of the VAT Act (ustawa o VAT), a gift of goods from a taxpayer’s enterprise is a supply if the taxpayer had the right to deduct. The disposal of an enterprise or an organised part of an enterprise (zorganizowana część przedsiębiorstwa, ZCP), including in the form of a gift, falls outside the scope of the Act (Article 6(1)). In a ruling of 6 June 2025, no. 0111-KDIB3-1.4012.267.2025.2.AB, the authority held that a gift of the assets of a real property letting business was a transfer of a ZCP outside VAT. We discuss the criteria in the article An organised part of an enterprise — a test that cannot be passed on paper.

The ruling of 20 November 2025, no. 0111-KDIB3-2.4012.620.2025.2.ASZ, concerns a founder who, as a registered VAT payer, let premises to a related company and deducted VAT on the acquisition. The authority held that the gift of the premises and of co-ownership shares in real properties was taxable at the appropriate rate, without exemption (before two years had elapsed from first occupation and after VAT had been deducted) and without an input VAT adjustment. The founder was also the sole management board member of that company and supplied taxable letting services to it. Therefore, the gift of its shares “will meet the conditions of a supply of services free of charge for purposes other than those of the taxable person’s business, referred to in Article 8(2)(2) of the Act”.

The authority may argue that every contribution by a founder who is an entrepreneur is a transaction carried out by a taxpayer. This argument is not decisive: what matters is the link between the asset and the business activity and the right to deduct, and the conclusion on the shares was reached on particular facts. Before the contribution, establish for each asset whether it belongs to the enterprise, whether VAT was deducted, when first occupation took place and whether it forms a ZCP together with other assets.

The 2025 veto and the bill for 2027

As at 29 September 2026, the announced changes have not entered into force.

The act extending to family foundations the rules on controlled foreign companies (CFC) and on exit tax (tax on unrealised gains) was vetoed on 27 November 2025. On 29 September 2026 the Council of Ministers (Rada Ministrów) adopted a bill amending the PIT, CIT and Lump-Sum Income Tax Acts (ustawy o PIT, CIT i ryczałcie). According to press reports, it also provides for changes to the taxation of family foundations, including a two-year period of holding assets before the preferential treatment can be used and a 19% rate on benefits in place of 15%. Until the act is passed and promulgated, the provisions described above apply – make your decisions on letting, disposals of assets and payments in accordance with them.

The most common mistake

The most common mistake is for a foundation to carry on activity outside the catalogue in Article 5(1) of the Family Foundation Act in the belief that the exemption under Article 6(1)(25) of the CIT Act covers all revenue.

This applies in particular to the resale of premises bought for that purpose, the acquisition of receivables from the founder, currency trading unconnected with the foundation’s payments and, according to the ruling of 8 May 2025, also short-term letting. Income from such activity is subject to the 25% rate, without the exemptions and deductions under Articles 17–18f and without the 9% rate (Article 24r(1) and (3), Article 19(1b)). If the foundation has treated such income as exempt, tax arrears may arise for each such year.

Keep a register of revenue streams, each assigned to a point of Article 5(1). Separate in the records the revenue and costs of activity outside the catalogue (Article 24r(2)), and apply for a ruling before starting any activity that the provision does not expressly name.

Summary

1. Assign every item of the foundation’s revenue to a point of Article 5(1) of the Family Foundation Act; treat whatever the provision does not name as activity subject to the 25% rate until you obtain a ruling.
2. Before signing a lease agreement, check the tenant’s relationships (5% threshold) and the intended use of the property let – letting for the business activity of a related entity costs 19%, which can later be deducted from the tax on benefits.
3. Apply for a ruling of your own before starting short-term letting.
4. Plan each benefit as the amount for the beneficiary plus the foundation’s 15% tax, and withhold PIT according to the proportion in the inventory of assets.
5. Before contributing assets, establish the VAT effect for each asset, especially where the founder has deducted VAT or is contributing shares in a company that the founder manages.

Sources cited

All quotations from Polish-language sources — statutes, tax rulings and court judgments — are given here in the author's translation; the Polish wording is authoritative.

• Individual tax ruling of the Director of the National Revenue Information Service of 1 December 2025, no. 0111-KDIB1-2.4010.471.2025.2.EJ – the contribution of loan receivables to a family foundation is neutral for CIT, and interest on receivables acquired by the foundation does not benefit from the exemption, because the acquisition of receivables is not the granting of a loan under Article 5(1)(5) of the Family Foundation Act; the authority cited the final judgment of the WSA in Kraków of 19 April 2024, case ref. I SA/Kr 245/24; the position held to be partly correct and partly incorrect. https://eureka.mf.gov.pl/informacje/podglad/669432
• Individual tax ruling of the Director of the National Revenue Information Service of 8 May 2025, no. 0111-KDIB1-2.4010.148.2025.2.MK – the short-term letting of residences does not fall within Article 5(1)(2) of the Family Foundation Act and does not benefit from the exemption under Article 6(1)(25) of the CIT Act; the position held to be incorrect. https://eureka.mf.gov.pl/informacje/podglad/638535
• Individual tax ruling of the Director of the National Revenue Information Service of 2 September 2026, no. 0111-KDIB1-3.4010.662.2023.13.AN, issued following the judgment of the WSA in Gdańsk of 19 June 2024, case ref. I SA/Gd 219/24, setting aside the ruling of 19 December 2023, and the judgment of the NSA of 16 January 2026, case ref. II FSK 1136/24, dismissing the authority’s cassation appeal – the short-term letting of premises falls within Article 5(1)(2) of the Family Foundation Act and is not subject to the 25% rate under Article 24r of the CIT Act; the position held to be correct. https://eureka.mf.gov.pl/informacje/podglad/708041
• Individual tax ruling of the Director of the National Revenue Information Service of 14 November 2025, no. 0111-KDIB1-2.4010.480.2025.1.END – the letting of real property to related entities for their business activity does not go beyond the catalogue but, by virtue of Article 6(8) of the CIT Act, is subject to the 19% rate, and the tax paid may reduce the tax on benefits under Article 24q(8) and (9); the position held to be correct. https://eureka.mf.gov.pl/informacje/podglad/666489
• Individual tax ruling of the Director of the National Revenue Information Service of 1 July 2025, no. 0111-KDIB1-2.4010.177.2025.1.END – the letting of part of a real property to a related entity is subject to the 19% rate, and depreciation write-offs on the value of real property contributed to the founding fund are not a cost under Article 16(1)(63)(a) of the CIT Act (write-offs are a cost to the extent that they correspond to the foundation’s expenditure on renovation and construction work); the position held to be correct. https://eureka.mf.gov.pl/informacje/podglad/646672
• Individual tax ruling of the Director of the National Revenue Information Service of 1 July 2025, no. 0111-KDIB1-2.4010.267.2025.2.AK – the 15% tax under Article 24q(1)(1) of the CIT Act is calculated on the value of the benefit and is borne by the foundation’s assets, not by the amount paid to the beneficiary; the position held to be correct. https://eureka.mf.gov.pl/informacje/podglad/646631
• Individual tax ruling of the Director of the National Revenue Information Service of 12 May 2026, no. 0114-KDIP3-1.4011.328.2026.1.EC – a family foundation is the remitter of PIT on benefits, and a person who is in a relationship referred to in Article 4a(1) of the Inheritance and Gift Tax Act with several founders aggregates their proportions under Article 27(4) of the Family Foundation Act; the position held to be correct. https://eureka.mf.gov.pl/informacje/podglad/691385
• Individual tax ruling of the Director of the National Revenue Information Service of 5 November 2025, no. 0113-KDIPT2-3.4011.662.2025.3.PR – the foundation’s profits and assets acquired from those profits do not change the proportion under Article 27(4) of the Family Foundation Act, and a change in family relationships without a contribution of assets does not cause the proportion to be determined again; the position held to be correct. https://eureka.mf.gov.pl/informacje/podglad/665728
• Individual tax ruling of the Director of the National Revenue Information Service of 17 September 2025, no. 0113-KDIPT2-3.4011.555.2025.5.JŚ – the contribution of real property by the founder to a family foundation is neither a disposal for consideration nor the making of a contribution in kind and does not give rise to revenue for PIT purposes; the position held to be correct. https://eureka.mf.gov.pl/informacje/podglad/658466
• Individual tax ruling of the Director of the National Revenue Information Service of 6 June 2025, no. 0111-KDIB3-1.4012.267.2025.2.AB – a gift to a family foundation of assets connected with the letting of real property, as an organised part of an enterprise, falls outside VAT under Article 6(1) of the VAT Act; the position held to be correct. https://eureka.mf.gov.pl/informacje/podglad/643637
• Individual tax ruling of the Director of the National Revenue Information Service of 20 November 2025, no. 0111-KDIB3-2.4012.620.2025.2.ASZ – a gift to a family foundation of premises let by the founder as a registered VAT payer, made before two years had elapsed from first occupation and after VAT had been deducted on the acquisition, is taxable at the appropriate rate and does not require an input VAT adjustment, and a gift of shares in a company that the founder manages and to which the founder supplies taxable services is a supply of services free of charge under Article 8(2)(2) of the VAT Act; the position held to be partly correct and partly incorrect. https://eureka.mf.gov.pl/informacje/podglad/667483

Related materials

• Tax capital group or holding company – two ways of settling tax for a group of companies
• Advanced calculator – benefit from a family foundation versus dividend

Legal basis: Act of 26 January 2023 on the family foundation (Dz.U. z 2023 r. poz. 326, as amended): Article 2(1) and (2), Article 5(1) and (3), Article 17, Article 20, Article 27(4), Article 28, Article 29; Act of 15 February 1992 on corporate income tax (consolidated text: Dz.U. z 2026 r. poz. 554, as amended): Article 1(3)(3), Article 4a(36), Article 6(1)(25) and (6)–(8), Article 11a(1)(4) and (2)(1), Article 15(2), Article 16(1)(63)(a), Article 19(1)(1) and (1b), Article 24b, Article 24q(1), (2), (6), (8) and (9), Article 24r(1)–(3), Article 24s(1); Act of 26 July 1991 on personal income tax (consolidated text: Dz.U. z 2026 r. poz. 592, as amended): Article 10(1)(8), Article 17(1)(9), Article 20(1g), Article 21(1)(157) and (49), Article 30(1)(17), Article 41(4); Act of 28 July 1983 on inheritance and gift tax: Article 4a(1), Article 14(3); Act of 11 March 2004 on the tax on goods and services (consolidated text: Dz.U. z 2025 r. poz. 775, as amended): Article 2(27e), Article 5(1)(1), Article 6(1), Article 7(2), Article 8(2)(2), Article 43(1)(10) and (10a); Act of 9 September 2000 on the tax on civil law transactions (consolidated text: Dz.U. z 2026 r. poz. 191): Article 1(1)(1)(d) and (k); Act of 29 August 1997 – Tax Ordinance (consolidated text: Dz.U. z 2026 r. poz. 622, as amended): Article 14b, Articles 14k–14nb; Act of 6 March 2018 – Entrepreneurs’ Law (consolidated text: Dz.U. z 2025 r. poz. 1480, as amended): Article 3.