In brief

• The Senate adopted a clarifying amendment to the act on family foundations.
• The amendment introduces a two-year grace period and raises the tax on withdrawals from 15 to 19 percent.
• The act awaits the president's signature, and business supports it.

What the Senate proposed

On Tuesday the Senate adopted an amendment to the act on family foundations, which changes the taxation rules for these entities (Senat za poprawką do ustawy o fundacji rodzinnej – Prawo.pl). The amendment is clarifying in nature: it does not change the main direction of the amendment, but explains selected provisions.

Purpose of the amendment and main changes

The government justifies the changes by the need to tighten the regulations. According to the ministry, the current rules are being abused for actions aimed solely at minimizing tax, in a way the government considers unfair. A two-year grace period and an increase in the tax levied on withdrawals from 15 to 19 percent are planned.

Business position

Business representatives support the amendment and urge the president to sign it. In their view, it is not about manipulation, but about closing loopholes that have long raised doubts (Biznes apeluje do prezydenta o podpis pod fundacjami rodzinnymi. „To nie kombinatorstwo” – Puls Biznesu). The act is currently on the president's desk and awaits a decision.

Stage of parliamentary work

The Sejm passed the amendment earlier, tightening the system of family foundations. Foundations are to lose some tax benefits but gain more precise rules for investing (Sejm uszczelnił system fundacji rodzinnych. Teraz czas na ruch prezydenta – Rzeczpospolita). The Sejm has already accepted the Senate's amendment, and the act has been forwarded further in the procedure.

What's next

The final form of the provisions depends on the decisions of parliament and on the president's decision whether to sign.