Contributing Loan Receivables to a Polish Family Foundation
The contribution is tax-neutral. The interest income is not. And that distinction costs 25% CIT.
The scheme proceeds as follows. A founder who has extended a loan to a company in which he holds shares establishes a family foundation (fundacja rodzinna) and assigns the loan receivable – principal and accrued interest – to the foundation. From that moment, the foundation is the creditor. The company pays interest to the foundation, and the foundation, being subject to the blanket CIT exemption under Article 6(1)(25) of the Corporate Income Tax Act, receives that interest free of tax. Taxation occurs only upon distribution to a beneficiary: 15% CIT levied on the foundation, with a PIT exemption for Group Zero recipients.
The construction appears flawless. Which is precisely why so many founders attempt to implement it. The difficulty is that it does not function as they assume – not because of the general anti-avoidance rule (though that risk exists independently), but because of something far more prosaic: the literal text of Article 5(1)(5) of the Act on Family Foundations.
I. The Contribution Itself: Tax-Neutral
The contribution of a loan receivable to a family foundation is a tax-neutral event. A receivable constitutes mienie (assets) within the meaning of Article 2(1) of the FR Act, and the foundation benefits from the blanket CIT exemption under Article 6(1)(25). This was confirmed by the Director of National Tax Information (Dyrektor Krajowej Informacji Skarbowej) in binding ruling 0111-KDIB1-2.4010.689.2025.1.BD of 25 February 2026 (Question 1: prawidłowe – correct).
No tax arises at the moment of contribution. No interpretive controversy attaches. This is the only element of the construction that operates exactly as the practitioner literature suggests.
II. Interest Income on the Assigned Receivable: 25% CIT
The founder assumes that, since the foundation is CIT-exempt, interest payments received by the foundation from the borrowing company will be free of tax. This assumption is incorrect.
The Director of National Tax Information, in the same February 2026 ruling (Question 2: nieprawidłowe – incorrect), held that interest income on a loan receivable acquired by the foundation through assignment constitutes business activity exceeding the catalogue of permitted activities under Article 5 of the FR Act. The consequence: taxation at the punitive rate of 25% CIT under Article 24r(1) of the CIT Act.
The reasoning is straightforward and unforgiving.
Article 5(1)(5) of the FR Act permits the foundation to conduct business activity in the scope of granting loans (udzielanie pożyczek) – to companies in which the foundation holds shares, to partnerships in which it participates, and to beneficiaries.
The operative term is “granting.” The foundation may grant loans. It may not acquire loan receivables. An assignment of claims (cesja wierzytelności) is not the granting of a loan. These are two distinct legal events, even where the civil-law effect is analogous – the foundation steps into the creditor’s position.
The tax authority stated the point without equivocation: “The acquisition of a loan receivable is not the same event as the granting of a loan. The civil-law consequence of such a transaction – that the foundation assumes the full range of rights previously vested in the original creditor – is immaterial.”
III. How the Interpretive Line Shifted in 2024
The current interpretive line crystallised in mid-2024. Before that, the same authority – the Director of National Tax Information – took the opposite position. Tracing this evolution matters, because it reveals the scale of risk for founders who relied on earlier rulings.
Favourable rulings (through April 2024). In ruling 0111-KDIB1-1.4010.75.2024.1.MF of 26 April 2024 – on a materially identical fact pattern (the foundation held no shares in the borrowing company; the receivable was contributed to cover the founding fund) – the Director held the applicant’s position correct in its entirety, stating: “interest payments on the loan cannot be regarded as the result of the family foundation conducting business activity.” The applicant in the February 2026 ruling cited this determination expressly. Similar favourable positions appeared in rulings of 23 February 2024 (0111-KDIB1-2.4010.11.2024.1.AK), 11 April 2024 (0114-KDIP2-1.4010.30.2024.1.KW), and 26 April 2024 (0114-KDIP2-1.4010.166.2024.1.KW).
The turning point (May 2024). Ruling 0111-KDIB2-1.4010.96.2024.2.KK of 10 May 2024 – same scheme: a founder donated loan receivables to the family foundation. The Director held: interest income is not exempt. Applicant’s position: incorrect.
Judicial confirmation (April 2024, final). The Provincial Administrative Court in Kraków (WSA w Krakowie), in its judgment of 19 April 2024 (I SA/Kr 245/24), confirmed the authority’s interpretation. The Court was unequivocal: “Had the legislature intended to include within the catalogue of permitted activities the acquisition of loan receivables, this would have been expressly stated in the statute.” The judgment is prawomocny – final and non-appealable.
Current state. The February 2026 ruling cites the Kraków WSA judgment as a binding reference point and expressly distances itself from the earlier favourable rulings using the standard formula regarding their individual character. The line is now settled – notwithstanding that the same authority previously took the opposite view. Those who relied on the older tax rulings now face a 25% CIT liability.
IV. The Argument That Failed
The applicant in the February 2026 ruling attempted an approach grounded in Article 54(1)(3) of the FR Act: since the foundation’s management board is obligated to ensure the foundation’s financial liquidity, the collection of receivables – including interest – constitutes ordinary asset management, not business activity within the meaning of Article 5.
The authority rejected this argument: “The fact that the foundation is obligated to accumulate and manage assets in accordance with its founding purpose (…) does not preclude a finding that business activity is being conducted. The accumulation and management of assets does not exclude the recognition that we are dealing with business activity.”
This is a significant determination. The statutory purpose of the family foundation – the accumulation and management of assets – is not a carte blanche for any activity the foundation wishes to undertake. The numerus clausus of permitted business activities in Article 5 remains operative regardless of how one labels the activity in question. One may call it “liquidity management,” “receivable realisation,” or “portfolio administration” – if it falls outside the catalogue, the tax consequence is identical: 25% CIT.
Notably, this was precisely the same argument that the Director accepted in the April 2024 ruling (0111-KDIB1-1.4010.75.2024.1.MF). The applicant – like many advisors – built his position on the authority’s earlier stance. The shift in the interpretive line rendered that strategy ineffective.
V. What This Means in Numbers
Assume a founder holds a loan receivable of PLN 1 million, bearing interest at 5% per annum. Annual interest: PLN 50,000.
Without the family foundation (direct receipt by the founder): the tax burden depends on the founder’s tax residence. For a Polish tax resident: 19% PIT on interest = PLN 9,500. For a resident of a jurisdiction with a favourable double taxation treaty: Polish WHT of 4–10% plus any tax in the residence state.
Through the family foundation (assignment of receivable): 25% CIT at the FR level = PLN 12,500. Plus 15% CIT on distribution of the remaining PLN 37,500 = PLN 5,625. Total: PLN 18,125. Effective rate: approximately 36.25%.
The assignment of a loan receivable to a family foundation is not tax optimisation. It is tax dis-optimisation – the founder pays more than if the structure had never been created.
VI. The Compliant Alternative
If the founder wishes interest income to flow to the family foundation under the CIT exemption, one mechanism exists within the Article 5 catalogue: the foundation itself grants a new loan to the company.
The mechanics are as follows. The founder contributes cash to the foundation (tax-neutral). The foundation extends a new loan to the company in which it holds shares (Article 5(1)(5) – permitted activity). The company uses the proceeds of the new loan to repay the founder’s existing loan. Interest on the new loan flows to the foundation – this time as income from granting loans, not from an acquired receivable.
Critical prerequisite: the foundation must hold shares in the borrowing company. In both analysed rulings (April 2024 and February 2026), the foundation held no such shares – meaning that even the “compliant pathway” would require the prior acquisition of an equity interest. Without meeting this condition, the foundation cannot grant a loan under Article 5(1)(5), regardless of whether the transaction takes the form of an assignment or a new loan agreement.
The economic outcome is substantially equivalent. The legal pathway is radically different. And it is the legal pathway that determines whether the interest income for the family foundation is taxed at 0% or 25%.
VII. The GAAR Overlay
Even if the strict-interpretation question were to be resolved differently in the future – which appears improbable given the prawomocny WSA Kraków judgment – the assignment of loan receivables to a family foundation carries an independent GAAR risk.
The Provincial Administrative Court in Gdańsk, in its judgment of 5 August 2025 (I SA/Gd 432/25), dismissed a complaint against a refusal to issue a binding ruling on the assignment of loan receivables to a family foundation. The tax authority declined to issue the ruling under Article 14b(5b) of the Tax Ordinance, relying on an opinion of the Head of the National Revenue Administration confirming a justified suspicion of tax avoidance. The Court endorsed that assessment, holding that the family foundation had been employed as “an instrument for deferring the creation of a tax obligation in respect of funds originally due to the founder.” The fact pattern was precisely the construction described above: a founder assigned loan receivables to the FR so that interest income would flow to a CIT-exempt entity rather than directly to the founder (who would have been subject to PIT). The implication is stark: the tax authority does not merely deny the CIT exemption for interest on assigned receivables — it refuses to engage with the scheme at all, treating it as potential tax avoidance.
The assignment mechanism is therefore vulnerable on two independent fronts: strict interpretation (25% CIT instead of 0%) and anti-avoidance clause (artificiality of the arrangement). Even if one front were to shift, the other remains. For a comprehensive analysis of the GAAR in the context of family foundations and the “contribute shares, liquidate company” paradigm, see our separate treatment.
VIII. The Real Question
Contributing a loan receivable to a family foundation is not prohibited. But interest income on the contributed receivable is not CIT-exempt. This distinction is critical – and it is precisely the distinction that most of the literature circulating online fails to draw.
Before deciding to assign a loan receivable to a foundation, one should ask a single question: will I pay more tax than if I simply received the interest myself?
In light of the current rulings and case law, the answer in most cases is: yes. Considerably more.
Taxation of the Family Foundation
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This article is provided for informational purposes only and does not constitute legal or tax advice. Any structure involving a Polish family foundation requires individualised legal analysis taking into account the specific factual circumstances, commercial objectives, and tax profile of the founder.
Kancelaria Prawna Skarbiec specialises in the establishment and administration of family foundations, succession planning, and GAAR risk analysis.
Robert Nogacki is a Polish attorney at law (radca prawny), the founder and managing partner of Kancelaria Prawna Skarbiec (Skarbiec Law Firm), which has operated continuously since 2006.
The law is equal for everyone, but the parties rarely are: on one side stands an organization with time, money, and lawyers, on the other a person with one business, one nest egg, and one life.
Clients rarely come to him with a legal problem. They come with a problem that also has a legal side: an audit that began with a single invoice, money entrusted to someone who has disappeared, a company that has to be passed on before it is too late. Most such matters are decided long before the first letter is written, in decisions made without asking and in deadlines nobody remembered. So he begins by asking how the client got here, not what the client should have done.
He advises entrepreneurs and families from more than a dozen countries, including those whose accounts the tax office has just seized and who do not know what to do tomorrow morning. He defends them in tax audits, customs and fiscal inspections, disputes with the tax authorities, and criminal tax proceedings. He represents victims of investment fraud and Ponzi schemes. He helps families set up family foundations and plan succession, so that a life’s work outlasts a single generation.
Not every case can be won. Every case can be run so that the client knows where they stand. Since 2006 he has represented the victims in the WGI case (Warszawska Grupa Inwestycyjna, the Warsaw Investment Group), one of the longest criminal cases in the history of the Polish financial market, because some things must not be left half finished, even when they take two decades. In the case of the collapsed cryptocurrency exchange Zonda (Zondacrypto, operated by BB Trade Estonia OÜ), he represents several hundred victims in the criminal investigation conducted by Poland’s National Prosecutor’s Office and in the Estonian bankruptcy proceedings.
Kancelaria Prawna Skarbiec is listed in the rankings of Poland’s largest tax advisory firms published by Dziennik Gazeta Prawna and Rzeczpospolita, and it is a four-time recipient (2015 to 2018) of the European Medal awarded by the Business Centre Club and the European Economic and Social Committee. Robert Nogacki publishes regularly, in the press and on the firm’s website, for people who have a problem rather than a law degree, because a legal opinion the client cannot understand protects only the lawyer.
He believes that the best legal advice is the kind that means the client never has to appear in court.
