Taxation in the forestry setting

In developing countries, decisions of landholders to establish forestry is in general not affected by taxation arrangements. However, in developed countries, taxation provisions can have strong and sometimes negative effects on private small-scale forestry, as illustrated with respect to an Australian case study. Taxation arrangements are found to be highly complex, and it is difficult to make generalisations about what deductions will be allowed or what tax on receipts will be payable; each case has to be viewed individually, and this increases the business risk in farm forestry. Anticipated changes hold the prospect of resolving two long-term disincentives, concerning use of mechanism of profit á prendre for forestry rights, and opportunity for an active secondary market for immature plantations