On 22 September 2026, the Ministry of Finance announced amendments to the family foundation taxation regime, originally introduced in 2022. The key changes include reducing the mandatory asset holding period from three to two years to qualify for CIT exemption on disposal, and widening the group of beneficiaries who can receive distributions or liquidation proceeds free of PIT. The ministry also confirmed that short-term rental income earned by the foundation remains taxable. These adjustments aim to curb abuse while preserving the vehicle’s legitimacy for succession planning.
Key Takeaways
- Shorter Holding Period: Foundations can now sell assets tax-free after two years, enhancing flexibility for asset rotation.
- Expanded PIT-Free Beneficiaries: Includes not only close family members but also persons related by adoption or long-term guardianship.
- Anti-Abuse Measures Retained: Short-term rental income and certain financial transactions remain subject to standard CIT rates.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement