Polish tax authorities rule on family foundation receivables

The Director of the National Revenue Administration (KIS) has issued a tax interpretation regarding the use of family foundations to manage receivables. While the initial receipt of a debt via donation to a family foundation is considered tax-neutral and does not trigger income tax, the subsequent management of that debt is subject to different rules.

The tax authorities determined that the recovery of both the principal amount and the accrued interest from the debtor may be subject to a 25 percent punitive CIT (Corporate Income Tax) rate. This ruling contradicts the foundation's position that managing such assets and liquidity constitutes standard asset management rather than taxable business activity.