Family Foundation – What Changes in 2026?
The Ministry of Finance has published a draft amendment to the tax regulations governing family foundations. The aim is to tighten the tax system and limit the use of family foundations as a vehicle for aggressive tax optimisation.
Key proposed changes include:
- Introduction of a 3-year lock-up period for assets contributed or transferred to a foundation – if such assets are sold within 36 months, the income will become taxable at the time of sale rather than upon distribution to beneficiaries.
- Extending the Controlled Foreign Company (CFC) regime to family foundations, which are currently excluded.
- Clarifying the tax treatment of foreign tax-transparent entities in which a family foundation holds shares.
- Excluding income from short-term rentals from the foundation’s tax exemption.
When will the new rules take effect?
The draft provides that the new regulations will apply from 1 January 2026 and will cover income generated by the foundation after the amendments enter into force.
What should be done now?
- Individuals establishing or already operating a family foundation should review the structure of contributed assets and potential disposals, as well as any foreign entities within the structure.
- It is worth verifying whether the foundation engages in short-term rental activity, which may soon become taxable.
- Prepare internal documentation and procedures to comply with the new requirements (CFC rules, holdings in tax-transparent entities).
Need help preparing for the changes? Contact our team – we’ll help you adapt your foundation to the new regulations.
Author: Aleksander Skirpan.
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