Supreme Court rules foundations must pay tax on profits from investments

The Polish Supreme Administrative Court (NSA) has decided that all foundations are obliged to pay income tax on profits from securities investments, a decision that will mean significant decreases in foundation incomes. It will mostly affect institutions supported by foundations. NSA's decision hits all foundations, but especially the large ones investing significantly in securities. The court decided that money spent on investments in securities are not in fact spent by foundations on activities specified in their by-laws, and thus is liable to taxation. Foundations now have two possibilities, either to invest and pay the taxes which are now 30%, or deposit their money in a bank account. Money from the latter source is not subject to taxes. The interest from a bank account exceeds the inflation rate to such a minimal extent that it is difficult to describe it as significant profit, and it can be spent on the foundation's statute activities. (Gazeta Wyborcza, p.3)