Ireland produces the following Tax Relief’s and incentives for the forestry sector:

Income Tax

The occupation of woodlands in the state, managed on a commercial basis and with a view to the realization of profit, is exempt fro income taxes for individuals and corporations regardless of their residence or domicile. Income from commercial woodlands including the forest premium scheme is not liable to the training levy or health contribution. Grant assistance for establishment, management and reconstruction of woodlands is exempt from income taxes as is the annual premium. Dividends paid by corporations out of exempt woodland income are exempt income to the recipients.

Pay Related Social Insurance (PRSI)

Income from commercial woodlands including the forest premium is reckoned for the purpose of PRSI

Capital Gains Tax (CGT)

Commercial woodlands occupied by individuals are exempt from CGT on the growing timber. The underlying land is not exempt but chargeable gains are restricted to the surplus over inflation adjusted cost. CGT is not applicable to a disposal on death. The exemption does not apply to corporations which occupy woodlands.

Value Added Tax (VAT)

Commercial forestry operation is regarded as agricultural production and exempt from vat but the exemption may be waived. It is normal to waive exemption and thus recover VAT on all the inputs of goods and services supplied to the woodland occupier. Once registered for VAT any supply by the woodland, including disposal, will attract a charge to VAT.

Stamp Duty

Growing timber in commercial woodlands is exempt from stamp duty but the underlying land is not.

Capital Acquisitions (Inheritance and Gift Tax (CAT)

Commercial woodlands in the state are subject to cAT on gifts to, or inheritance by, individuals regardless of the residence or domicile of the disposer and beneficiary. In addition to specified exempt thresholds, relief is available to commercial woodlands as agricultural property. As from 23rd January 1997 the relief as a reduction in market value is as follows: A flat rate reduction of 90% applies to both intervivos gifts and inheritance of commercial woodlands. All gift and inheritance between husband and wife are exempt from CAT and Probate tax.