In its resolution of 29 May 2025, the Council for Counteracting Tax Avoidance (Rada ds. Przeciwdziałania Unikaniu Opodatkowania) addressed for the first time the issue of family foundations—specifically the situation in which shares or stocks are contributed to a family foundation and subsequently sold in the near future. The Council held that not every such sale would constitute tax avoidance; the key factor in such cases will be how the proceeds from the sale are used.
Family foundations are currently frequently used by taxpayers as a means of avoiding taxation. Due to the exemption provided in Article 6(1)(25) of the Corporate Income Tax Act (CIT Act), the sale of shares or stocks by a foundation is not subject to tax. Tax arises only at the moment when the funds are distributed to the founder or a beneficiary. Meanwhile, a direct sale of shares by the founder, without using a family foundation, would be subject to PIT and potentially a solidarity levy if income exceeds PLN 1 million.
Until now, the Head of the National Revenue Administration (Szef KAS) has consistently held that such actions constitute tax avoidance (see, for example, the refusal to issue a protective ruling of 17 April 2025, ref. DKP1.8082.6.2024, and the refusal dated 5 May 2025, ref. DKP16.8082.14.2024). In both cases, the Head of KAS argued that such actions were artificial, as a person intending to sell shares would simply do so, rather than creating a family foundation to serve merely as an intermediary and to benefit from a tax advantage.
The aforementioned resolution may shed light on such situations. Although it is not legally binding on tax authorities, it provides useful guidance on how certain scenarios should be interpreted and how taxpayers can act to avoid triggering GAAR provisions.
The Council emphasized the timing of the application of the GAAR clause. In its view, the mere sale of shares should not automatically trigger GAAR. Instead, it is the immediate distribution of the proceeds to the founder or beneficiary that may determine the application of anti-avoidance measures.
Therefore, the way the proceeds from the sale are managed will be of key importance. If they are immediately distributed to the founder or a beneficiary, this would—in the Council’s view—constitute a situation in which the exemption is used contrary to its purpose. However, the situation would be different if the proceeds remain within the foundation and are reinvested. The Council noted that the main objective of the tax exemption for family foundations is to allow for the accumulation of family wealth in Poland for future generations, which may also involve selling assets and making new investments.
As mentioned earlier, while the resolution is not binding, it provides valuable insight into how family foundations should be viewed and where the limits of the applicable exemptions lie. It may also prompt a shift in the strict fiscal stance of the Head of KAS, who has previously maintained that a taxpayer should first sell the shares and then contribute the proceeds to the foundation, rather than contributing the shares and reinvesting the capital through the foundation.