Transfer of the right to cut standing crop and felled timber
Depending on the circumstances and conditions of the transfer of timber, the income received may be taxable as business income or as gains from transfer of property. Due to different bases for taxation, tax burden, accounting for property and declaration it is important to know whether this is a business of a natural person or the transfer of property.
The gains derived from the transfer of the right to cut standing crop and felled timber may be carried forward to up to three following periods of taxation.
Upon the transfer of the right to cut standing crop and felled timber, the taxpayer has the right to deduct certified expenses relating to forest management from the income received from the transfer of the right to cut standing crop or felled timber during the same period of taxation or three following periods of taxation if the following conditions are met:
forest management is carried out, as defined in the Forest Act;
the owner of the forest has submitted a forest notification concerning the forest management activity to the Environmental Board in the case provided for in the Forest Act and the Environmental Board has permitted the activity planned in the forest notification.
If the registered immovable wherefrom forest was transferred has an acquisition cost, a part of the acquisition cost may be deducted from the income. Upon further transfer of the registered immovable, this part of the acquisition cost cannot be taken into account any longer.
The transfer of the right to cut standing crop and felled timber shall be entered into table 6.2 of Form A. The registered immovable number shall be stated as well wherefrom the right to cut standing crop or felled timber was transferred.