Forestry sector sees €77 million in Stamp Duty relief in 2019

Some 189 individual claimants availed of a total of €77 million in Stamp Duty relief from transactions on forestry last year.

This figure was revealed by Minister for Finance Paschal Donohoe in answer to a parliamentary question from Sinn Féin Meath East TD Darren O’Rourke.

These figures show a general increase in the value of Stamp Duty relief being claimed in forestry transactions over the last 10 years.

Notably, since 2017, the total value of relief has increased by almost €40 million, but in the same period the number of claimants have in fact decreased.

The total value of Stamp Duty relief in each of the last 10 years, and the corresponding number of applicants, is outlined below:

  • 2019: €77 million in relief for 189 claimants;
  • 2018: €66 million in relief for 190 claimants;
  • 2017: €39 million in relief for 193 claimants;
  • 2016: €34 million in relief for 124 claimants;
  • 2015: €49 million in relief for 102 claimants;
  • 2014: €12 million in relief for 108 claimants;
  • 2013: €8 million in relief for 89 claimants;
  • 2012: €9 million in relief for 64 claimants;
  • 2011: €11 million in relief for 76 claimants;
  • 2010: €8 million in relief for 70 claimants.

Deputy O’Rourke also queried the value of tax reliefs in relation to forestry over a similar period, including income tax; corporations tax; capital gains tax; VAT; and gift an inheritance tax.

In his response, Minister Donohoe assumed maximum tax cost of 40% for income tax and 12.5% for corporation tax.

The minister provided tax relief figures in the forestry sector for the years 2011 to 2018 (no data was provided for years 2019), which are outlined as follows:

  • 2018: €33.7 million in tax relief for 9,192 claimants;
  • 2017: €29.9 million in tax relief for 9,381 claimants;
  • 2016: €30.6 million in tax relief for 8,858 claimants;
  • 2015: €31.5 million in tax relief for 9,077 claimants;
  • 2014: €30 million in tax relief for 8,234 claimants;
  • 2013: €26.5 million in tax relief for 8,013 claimants;
  • 2012: €25.2 million in tax relief for 7,550 claimants;
  • 2011: €24.8 million in tax relief for 6,679 claimants.

O’Rourke also asked the minister for the reasons in offering these reliefs for forestry, to which the minister responded by quoting the 2014 ‘Agri-Taxation Review: Report of the Agri-Taxation Working Group to the Minister for Finance and the Minister for Agriculture, Food and the Marine’.

This stated that: “Forestry plays a key role as a carbon sink, helping to mitigate the increase in greenhouse gas emissions from other sectors of the economy.

Forestry is a capital-intensive investment with costs front-loaded. Compared with other industrial sectors, it has a relatively long period before returns are realised.

Finally, Minister Donohoe also noted the 2018 ‘Progress Implementation Update of the Agri-Taxation Review 2014’, which said that in order “to assist environmental sustainability, profits or gains from the commercial occupation of woodlands [should] remain tax exempt”.