Amended regulations governing Family Foundations
On 20 April 2023, the President signed the Act of 14 April 2023 amending the Act on Investment Funds and Alternative Investment Fund Management, the Act on Bonds, the Act on the Banking Fund, the system of deposit guarantees and compulsory restructurings and some other acts.
The Act introduced a number of changes to regulations governing family foundations, of which we informed before: Changes to the Family Foundations Act – Andersen
The main changes include:
- Exemption of certain proceeds of family foundations from the income tax. This applies in particular to income earned from lease, rental or other contracts of similar nature, the objects of which are assets used to run a business by the beneficiary, founder or an entity related to the family foundation.
- Implementation of a new category of family foundation benefits: hidden profits, which will be taxed with 15% CIT. This primarily applies to: interest, commissions, compensation and other fees on any type of a loan granted to a family foundation by a beneficiary, founder or entity related to the beneficiary, founder or foundation, non-monetary services such as advisory, accounting, legal, advertising, management and control services provided to the beneficiary, founder or related party, etc.
- Implementation of a provision stipulating that the family foundation under organization will forfeit the right to be exempt from CIT if it is not enrolled in the register of family foundations within the required time limit.
The amended regulations on family foundations take effect on 22 May 2023, which is the same date as the act implementing this institution to the Polish law.
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