Proposal of Fiscal incentives to promote Sustainable Forest Management
About this good practice
Investments and expenses planed and made on forest properties with the Forest Management Plan (FMP) approved by the forest administration, will enjoy a tax deduction equivalent to 30% of non-productive investments to improve and/or facilitate the provision of forest ecosystem services. It will be applicable directly to the Personal or Corporate Income Tax.
Labor-intensive investments inherent to sustainable forest management operations (labor costs account for 80% of total costs) investments, is a key point to consider since it offsets the cost to the fiscal administration. Collected data and studies prove that the tax deduction is lower than the income generated by the tax release. Available data prove that public incentives to sustainable forest management stimulate private investment and personal income taxes and social security contributions generated by the increase of activity give as a result a net gain to the public administration.
Easy implementation and control thanks to tools such: forest management plans and the Forest Property Centre – Department of Agriculture, Livestock, Fisheries, Food and the Natural Environment of the Catalan Government.
Resources needed
It was a lobbying action based in the day to day work from the different Forest Owners organizations from Spain.
Evidence of success
Limited application of the proposal through the Additional Provision of Law 43/2003, of November 21, Countryside (Ley de Montes):
The forestry companies are entitled to a deduction in the full amount of corporation tax of 10 percent of the expenses or investments they make in the tax period in the conservation, maintenance, improvement, protection and access of the forest.
Nevertheless, evidence of success can be provided by impact of equivalent fiscal measures in other environmental policies
Potential for learning or transfer
The lobby implied a considerable effort in studying the potential economic consequences of such taxation changes, which could be easily transferable with the data of other European regions.
The campaign implied a associational effort, inside and outside the region, with high learning potential for other local associations around Europe
Legal frameworks in different regions should be previously understood in order to facilitate transfer.
Further information
Good practice owner
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