FOREIGN EXPERIENCE OF FORESTRY TAXATION

Abstract

The article investigated the features of forestry taxation in the United States of America, France, and Iceland. The main directions of reforming the tax system of Ukraine in the field of forest management are defined. The purpose of the study is to analyze the experience of foreign countries on forestry taxation and the effective use of forestry potential of countries with the prospect of introducing effective practices into the system of taxation of domestic economic entities.

Research on scientific articles on forestry taxation has shown that many traditions in environmental management are remnants of previous systems of management, and therefore far behind Western practice. However, Ukraine’s orientation to the European Union requires that Ukrainian legislation in the field is consistent with EU forest management conditions.

Despite the considerable attention of scientists on the issues of improving and reforming the existing system of taxation of forestry enterprises, many problems remain regarding the administration of resource payments and the application of their mechanisms in forestry.

It is determined that the most optimal for Ukraine is the American tax system. Rates and methods of taxation differ significantly for different types of ownership of forest land. Wood is classified into three types:

- personal use (mainly for personal use, without profit);

- investment real estate (mainly to profit from rising timber or asset prices);

- business property (with regular, active and permanent profit from logging activities).

American incentive and subsidy methods are implemented in the form of federal and state income tax benefits; favorable management of the environment of wood and wildlife in state and local property taxes; deductions for the donation of land or the right to build it in conditions of permanent conservation of easements; direct incentive savings through special bills and other federal, state, and private programs.

Federal tax policy reforms have increased the income tax for high-income businesses and changed the real estate tax by touching some forest owners and producers. However, despite flexible tax policies, forest land taxes and forest fund use continue to fund state and local budgets. That is why it is possible to implement such system in the economy of Ukraine.

Overseas taxation is more loyal to businesses that focus not on profit, but for those whose forest is primarily a source of income, there is a progressive rate of interest on income tax. The fact that Ukraine’s European integration requires reforming the economy and forestry, including the tax system will gradually move closer to the European one.