Family Foundation and Contribution of Claims from Participatory Loans – New Individual Ruling by the Director of the Polish National Tax Information

Family foundations are becoming an increasingly popular tool in succession planning and wealth management. In practice, however, many questions arise regarding the tax consequences of transferring various types of assets to such entities. The latest individual tax ruling issued by the Director of the National Tax Information Authority (KIS) on July 4, 2025 (0111-KDIB1-2.4010.222.2025.2.MK), clarifies the treatment of transferring claims from participatory loans to a family foundation.

What was the case about?

A family foundation was to receive from its Founder property rights arising from participatory loan agreements. These included claims for repayment of the loan principal and for interest – both fixed and variable (linked to the borrower’s performance). The foundation did not have any control rights over the borrower.

The Applicant’s Question

Would the transfer of claims arising from participatory loans by the Founder to the family foundation trigger taxable income on the part of the foundation, or would this event be covered by the exemption under Article 6(1)(25) of the Corporate Income Tax Act?

What was the Foundation’s position?

The foundation argued that the contribution of such claims by the Founder does not result in taxable income. This is because the transaction is of a purely property-related nature and does not generate actual economic gain of an income nature that could be subject to taxation. Moreover, under the provisions of the CIT Act, family foundations enjoy a subjective exemption from tax. While the law provides for certain exceptions to this exemption, they do not apply to situations where a foundation receives assets from its Founder – including claims under participatory loan agreements. As a result, such a transfer should be regarded as tax neutral.

What did the Director of KIS decide?

The authority agreed with the Foundation. It confirmed that:

• receiving property rights from participatory loans does not constitute business activity within the meaning of the Business Law Act,
• the foundation in this respect enjoys CIT exemption,
• the contribution of claims to the family foundation is tax neutral.

Why is this important?

This ruling strengthens the interpretation line according to which the transfer of assets such as claims, interest, deposits, or profit rights to a family foundation does not give rise to taxable income. This means that family foundations can safely, from a tax perspective, receive such assets from the Founder.

What does this mean in practice?

• Founders may equip family foundations with claims under participatory loan agreements without triggering corporate income tax at the foundation level.
• It has been confirmed that a family foundation does not need to fear that such events could be classified as prohibited business activity.
• The ruling aligns with previous decisions in which the authorities had already recognized, among others, bank deposits, traditional loans, or profit rights as tax-neutral activities.

The ruling of July 4, 2025 confirms that family foundations can be effectively funded not only with cash or shares in companies but also with claims under participatory loan agreements. This represents another step toward stabilizing the interpretation line, which provides Founders and advisors with greater legal and tax certainty in family wealth planning.