The Forestry Association of Galicia proposes extending the Objective Estimation Tax Regime to all forest owners.
The Forestry Association of Galicia held its 35th General Assembly on 18 June at Toubes Palace in Cenlle, an event attended by forest owners and representatives of community woodlands from across Galicia.
The day served to highlight some of the proposals that foresters have for improving forest management. Specifically, the Assembly approved two resolutions on issues that landowners consider a priority: improving forest taxation and updating the Rural Cadastral Register.
Regarding taxation, the Galician Forestry Association has three main proposals:
To allow all forest owners to tax timber sales in the Objective Estimation Regime (modules).
The current forestry taxation penalizes long-term forestry use, that is to say, when the trees have a cutting cycle superior to 30 years, as is the case with pines and deciduous trees.
In long-turn operations, those proprietors who are under the Direct Assessment Regime – for example, the vast majority of self-employed people – pay up to four times more tax in Income Tax than those who are under the Objective Assessment Regime (such as employees).
The underlying problem is that owners who are taxed under the Direct Estimation Regime are being taxed for a tax benefit that is much higher than the real one.
It is counterintuitive that these landowners pay more the longer the cutting rotation is extended, when in practice the rate of return on investment for pine and broadleaf plantations is lower than for fast-growing species.
This is a circumstance that the AFG understands discourages the planting of long-rotation species, so, together with the Confederation of Forestry Organisations of Spain (COSE), it has begun discussions with the Government to amend the tax regime. Foresters are calling for all private forest owners to be able to declare their forestry activities under the Objective Estimation Regime.
In the case of community woodlands and companies liable for Corporation Tax, grant a partial tax exemption on the exploitation of forest stands with a rotation period of more than 30 years.
This measure, as in the previous case, would introduce greater fiscal fairness and make plantations of broad-leaved deciduous trees (chestnuts, cherries, oaks, etc.) and conifers more economically attractive.
Establish deductions in the IRPF of between 20 per cent and 40 per cent for investments made in the forest.
The IRPF deduction would incentivise improvement and restoration work on forests by allowing a 20 per cent deduction on the cost of such works, a deduction that is doubled in the case of investments in protective stands.
Rural Land Survey
Another of the priority actions that would contribute to improving forest management is the updating of the Rural Land Cadastre. The current Cadastre is outdated and contains numerous errors, which makes all kinds of forestry activities (harvesting, applications for grants, etc.) more difficult.
The state of the Cadastre is also a clear obstacle to the establishment of joint forest management groupings that could help address the problems arising from smallholdings. Errors in the Cadastre make it difficult to identify landowners and plots, turning any grouping project into a titanic task.
The AFG Assembly resolved to call on the Administrations to launch an urgent review of the Cadastre, in order to update it and resolve the problems it presents.
CO2 offsets
The assembly approved a resolution urging companies that buy CO2 rights to ensure that the proceeds from sales go back to the owners of the forests and not to intermediaries and speculators.
Wind farms
Furthermore, following a proposal put forward by the partners during the assembly, it was agreed to convey to the Administration the need to review the compensation for the owners of the land affected by the wind farm projects, given the impact they have on the territory.
After the Assembly concluded, around a hundred participants shared a meal of fellowship, and in the afternoon some of them travelled to the Mount of Ridimoas (Beade), where a visit to this unique conservation-focused site was scheduled.
