Following proposals announced by the Ministry of Finance for radical tax changes in the Family Foundation Act, which are unfavorable for entrepreneurs, the Enterprise Council appeals to the Minister of Finance to halt work and engage in genuine dialogue with business. It is necessary to work out solutions to further the development of this legal institution, rather than effectively blocking or even destroying it.
The Family Foundation Act was created as a result of a unique dialogue and cooperation between business communities, including family businesses, and public administration. This Act was praised as a good, compromise legislation, taking into account both the rightful interests of the Country and those of entrepreneurs.
However, on August 21, at a conference in PAP, the Ministry of Finance presented family foundations as de facto pathological legal institutions and announced a serious legislative interference with their activities. The need for “tightening up the tax system” was highlighted because the “beneficiaries of the foundation enjoy tax preferences beyond the spirit of the law”. It was recognized that “tax legislation in this area has gone too far” and that “almost half of the foundations formed were created solely for tax evasion purposes.”
According to the Ministry of Finance, this requires urgent legislative intervention “primarily for the benefit of family foundations, so that they do not acquire the stigma of vehicles used for aggressive tax optimization and are not associated with tax fraud.”
In this way, the Ministry of Finance has, by taking scant and marginal examples of establishing foundations for purposes inconsistent with the intention of the legislator, created an image of a pathological legal institution in need of radical legislative intervention limiting the rights of foundations and has decided to change “the rules during the game.”
Organizations associated with the Enterprise Council express deep opposition both to this narrative surrounding family foundations and the entrepreneurs who establish them, as well as to the diagnosis presented and the proposed solutions. They are a clear denial of the principle of legal stability repeatedly declared by the Coalition on October 15.
Let’s recollect that the family foundation is a legal instrument introduced to the Polish legal order under the Act of January 26, 2023, on the family foundation, which came into force on May 22, 2023. The idea of the family foundation is to “detach” the assets contributed to the foundation from the founder, as the assets contributed to the foundation become its property and cease to belong to the founder.
After more than 30 years since the political transformation in Poland, domestic law finally offered tools that, on the one hand, ensured the permanence and indivisibility of the company (this particularly applies to family-run businesses), and on the other – secured the future of loved ones (including not only family members).
The Family Foundations Act was one of the legal acts most eagerly awaited by Polish business, and after coming into force, it has become the principal means of multi-generational succession in business, similar to practices in “old” Europe.
In the first year of the Family Foundations Act, Polish entrepreneurs trusted the state and registered over 1,000 foundations. Hundreds more registration requests await consideration. This clearly shows how necessary and anticipated this law was and how seriously the authorities’ declarations were taken.
We appeal to the Minister to halt work, engage in dialogue, and offer support for family foundation institutions.
Source: https://managerplus.pl/rada-przedsiebiorczosci-apeluje-do-ministra-finansow-o-wstrzymanie-niekorzystnych-zmian-w-ustawie-o-fundacji-rodzinnej-i-realny-dialog-z-biznesem-50162
