As a rule, a Family Foundation is exempt from CIT (corporate income tax) insofar as its activities remain within the scope defined in Article 5 of the Family Foundation Act. This scope includes, among others, rental and lease activities.
As such, traditional rental income is clearly covered by the exemption. However, until now, the tax authorities have consistently held that this exemption does not apply to short-term rentals. The administrative courts take a different view, though — in two rulings, they confirmed that short-term rental income may also benefit from the exemption.
These cases were heard by the Provincial Administrative Court (WSA) in Gdańsk (judgment of 19 June 2024, ref. I SA/Gd 219/24) and the WSA in Wrocław (judgment of 26 March 2025, ref. I SA/Wr 807/24).
The Gdańsk case concerned a taxpayer intending to donate a property to a family foundation he established, with the aim of using it for short-term rental. He argued that the exemption should apply, as the legislator did not limit the rental referred to in Article 5 of the Act to only long-term or traditional forms — therefore, short-term rental should also qualify.
The Wrocław case involved an existing family foundation generating income from short-term rental of its property. The foundation also claimed that this activity should fall within the scope of the exemption provided in Article 5. It argued that under the Civil Code, there is no basis to distinguish short-term rental from traditional rental. The foundation also referenced the earlier judgment issued by the WSA in Gdańsk.
In both cases, the Head of the National Tax Information (KIS) disagreed with the taxpayers. In his interpretations, he pointed out that rental is typically formalized: it involves signing an agreement, setting out mutual rights and obligations, often preparing a handover protocol, and including a set of rules the tenant must follow. The tax authority also emphasized the relative stability of tenants and the cyclical nature of payments. In its view, these characteristics are not present in short-term rentals, and thus the exemption should not apply.
However, the courts disagreed. In both judgments, they found no legal grounds to distinguish between traditional and short-term rental. The latter is not separately defined under Polish law and should therefore be subject to the general rental provisions found in the Civil Code. Although short-term rental may be subject to different registration requirements than residential rental agreements, the arguments presented by the tax authorities were not sufficient to justify denying the exemption to family foundations.
While these rulings are favorable for family foundations and may set a precedent in future cases, it is important to note that they are not yet final. The ultimate resolution by the Supreme Administrative Court (NSA) is still pending and will be worth watching closely.