The Polish Family Foundation (fundacja rodzinna) entered the Polish legal system on 22 May 2023 and immediately became one of the most popular succession planning tools among Polish entrepreneurs.
By the end of 2025, the District Court in Piotrkow Trybunalski had registered 3,140 family foundations, while the total number of applications filed exceeded 5,000. The institution’s popularity is beyond question – and it is precisely for this reason that both administrative and civil courts have begun issuing rulings on matters that until recently remained in the realm of interpretive speculation.
Below we discuss the most significant judgments of recent months.
First Bankruptcy of a Family Foundation – The End of the “Safe Haven” Myth?
The most groundbreaking ruling of recent months was delivered by the District Court for the Capital City of Warsaw, which on 3 March 2026 declared the first-ever bankruptcy of a Polish family foundation, thereby confirming its capacity to enter insolvency proceedings.
This decision overturns the widespread belief that a family foundation offers absolute protection against financial liability. A family foundation is jointly and severally liable with the founder for obligations arising before its establishment – liability is capped at the value of assets contributed and arises by operation of law.
Crucially, a creditor may pursue claims directly against the foundation without the need to obtain any additional court order.
Practical note: A family foundation is a powerful succession tool – but it is not an impenetrable shield. Founders carrying pre-existing liabilities should plan the timing and manner of asset contribution with particular care.
Short-Term Rental – Courts Side with Taxpayers (for Now)
One of the most contentious interpretive disputes since the family foundation was introduced concerns short-term rental income (e.g. through platforms such as Airbnb). The tax authorities consistently argued that such arrangements do not constitute “rental” within the meaning of the Act and applied a punitive 25% CIT rate.
However, in recent rulings the administrative courts have sided with family foundations, holding that there is no basis for treating rental income under the Civil Code differently from short-term rental income for tax purposes. This line is reinforced by the judgment of the Regional Administrative Court (WSA) in Rzeszow (I SA/Rz 172/25), which confirmed that a family foundation may carry out rational investment activity in real property, provided it does not have a purely speculative character.
Caution is nonetheless warranted: in light of the presidential veto in late November 2025 of an amendment that would have excluded short-term rental from the list of permitted activities, the current court-level victories may prove to be only temporary successes.
Tax-Transparent Foreign Entities – Foundations Prevail
Another disputed area concerns a family foundation’s participation in tax-transparent foreign entities (e.g. Luxembourg SCSp, Cayman LP). The tax authorities argued that since such entities are not subject to CIT, they fall outside the statutory catalogue of permitted activities.
The WSA in Warsaw (III SA/Wa 2557/24, judgment of 16 January 2025) and the WSA in Lodz (I SA/Ld 114/24, judgment of 9 April 2024) held that a family foundation may benefit from the CIT exemption in respect of income derived from participation in tax-transparent foreign entities, and that classification of an entity as a “commercial company” is independent of its CIT taxpayer status.
Receivables Held by a Family Foundation – A Concerning Trend from the Tax Authorities
A particularly worrying trend has emerged in rulings concerning receivables contributed to a family foundation. Despite the absence of any legislative changes, recent months have seen a marked tightening of the tax authorities’ approach to the taxation of family foundations – most visibly in individual tax rulings concerning the contribution of receivables to foundations.
The administrative courts are, for now, pushing back against this trend. The WSA in Warsaw (III SA/Wa 2232/24, judgment of 5 December 2024) took the position that the receipt of profit distributions and interest constitutes merely passive receipt of assets and cannot be regarded as the result of the foundation conducting business activity. Significantly, in March 2026 the Director of the National Fiscal Information (KIS) – following the judgment becoming final and binding – was required to reverse its position in an issued ruling (letter of 17 March 2026, ref. 0114-KDIP2-1.4010.242.2024.14.S/KW).
The Legislative Landscape: Presidential Veto and a Comprehensive Statutory Review
At the legislative level, 2025 ended with a remarkable development: on 27 November 2025, the President vetoed an attempt to amend the CIT Act with respect to the taxation of family foundations. The grounds were procedural – the Ministry of Finance, as the author of the draft, had failed to comply with the requirement under Article 143 of the Family Foundation Act, which obliges the Council of Ministers to conduct a review of the Act’s provisions three years after its entry into force.
That review, now initiated by the Ministry of Development and Technology, is currently underway – with the participation of professional self-governing bodies and industry organisations. Its stated aim is a comprehensive assessment of the Act as a whole, not merely its tax dimensions.
Conclusion
The Polish family foundation enters its third year with a growing body of case law that, in the majority of instances, favours taxpayers. The administrative courts are protecting access to CIT exemptions in the areas of rental income, foreign investments and the management of receivables.
Yet the landmark insolvency ruling and the steadily hardening stance of the tax authorities make clear that the time for “quick-build” foundations is over. A family foundation remains one of the most effective tools for asset protection and succession planning – but only when it is carefully structured from both a legal and a tax perspective.
If you are considering establishing a family foundation or wish to review an existing structure, we invite you to contact us.
Michał Gawlak
attorney-at-law
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