Uncertain tax benefits of family foundations

Despite announcements of the government, the new regulations on family foundations may not be as favorable as stakeholders might expect. All because of imprecise tax regulations. It may turn out that foundations will not be able to benefit from tax exemption so easily. It is also unknown how they will calculate tax costs.

In the opinion of Aldona Leszczyńska-Mikulska, attorney-at-law and partner at GWW Tax, supervisor of the private client advisory team, these tax benefits give an advantage to the family foundation over any other solution currently available in the Polish law. – On the other hand, operations of the family foundation will be taxed according to general rules, which does not bring such spectacular benefits (lack of 9% CIT). I do believe, however, that due to the purpose of setting up the foundation, it is not a significant defect of the draft act – notes the expert. In her opinion, the problem of many people setting up private foundations abroad was the taxation of benefits provided to beneficiaries by the foundation during the life of the founder or after his death. Income obtained by natural persons from a foreign foundation was subject to taxation, in the best option with a 20% tax on inheritance and donations or a PIT tax (17 or 32%). According to the draft act, the income of the founder and the beneficiary from the so-called the zero group (the closest family members – a spouse, parents, children, siblings) received from the family foundation, will not be subject to PIT taxation.

The article with a commentary by Aldona Leszczyńska-Mikulska was published on Prawo.pl:
https://www.prawo.pl/podatki/korzysci-podatkowe-dla-fundacji-rodzinnych-w-projekcie-ustawy,507387.html