There are many myths surrounding family foundations in Poland – especially regarding their alleged role as a tool for tax optimization. SKarol “Friz” Wiśniewski's statement caused a lot of controversy in particular, who stated that he invested almost all of his assets in a family foundation, pointing to the benefits of avoiding paying taxes on capital gains.
— It is not without reason that I opened a family foundation, where you are exempt from any capital gains taxes, so all the selling and buying of shares happens in my foundation, where I do not pay any tax on what I earn from this sale of shares. And it's great, he said.
What is a family foundation not?
Anna Turska-Tomczykowska, tax advisor, managing partner of the Tomczykowski Tomczykowska law firm, stated in “Onet Rano. Finansowo” that the approach to a family foundation as a tax optimization tool is a key mistake. — I will say it probably for the thousandth time: a family foundation is not a tax optimization tool at all. Concentrating the entire discussion around the topic of tax optimization is, in my opinion, a misunderstanding. It's as if we suddenly started saying that a car is mainly used for refueling it, not for driving it – she presented graphically.
However, she noted: – Of course, the family foundation has certain tax preferences, for example helping us catch up with the West, i.e. it allows us to defer taxation of capital and accumulate this capital precisely so that Polish entrepreneurs can catch up – emphasizes the expert.
An expert warns against a costly mistake
Tomczykowska emphasized that the purpose of a family foundation is primarily to collect and secure assets and pass them on to subsequent generations. This means that its essence is long-term asset management and succession, not short-term tax benefits. In practice, a family foundation is intended to be a tool for building the durability of a family business and its continuity, often beyond one generation.
The expert also warns against attempts to use the foundation contrary to its intended purpose.
— People who use the foundation in a manner contrary to the wording of the act are potentially exposed to huge consequences, including tax ones. Here, the first issue may, of course, be the possibility of applying a general clause of tax circumvention by tax authorities, she emphasized.
This mechanism works in a special way – it allows tax authorities to assess not only the formal correctness of the taxpayer's actions, but also their actual purpose.
— If someone makes a series of transactions and each of these activities is legal, but its main purpose is solely to obtain a tax benefit, then the tax authorities may behave as if these individual activities did not exist at all – she explained.
The consequences can be very severe. — Firstly, tax, secondly, interest on tax arrears, and thirdly, an additional sanction of up to 30%. achieved tax benefit. So this really is high-risk behavior, the expert warned.
Three years of family foundation in Poland
The Act on Family Foundations has been in force since May 22, 2023. To date, 7,037 family foundations have been established.
On average, the court receives from 150 to 200 applications per month. 2,842 foundations (77% of all registered) were founded by 3,572 founders, including 950 women. The average age of the founder is 52 years.
The NBP data collected and analyzed by the Tomczykowski Tomczykowska law firm also shows that 72 foundations invest abroad. And this is not small money, it amounts to PLN 6.4 billion. And they may be even greater, because many foundations are not aware that they must report data on foreign assets to the National Bank of Poland.
