VAT Deduction Rights and Allocation of Costs in Joint Forest Property Transfers and Management

• A is a joint forest under the Joint Forest Act for sustainable forestry for its shareholders
• Forest owners joining A receive shares corresponding to the value of the forest property added
• Transfer of joint forest shares follows real estate sale rules
• A’s income is 90 percent from taxable timber sales and 10 percent from tax-exempt activities like renting fields
• A has the right to deduct VAT on expenses directly related to taxable timber sales
• Real estate sales and field rentals are tax-exempt activities with no VAT deduction rights
• Transfer of joint forest shares is considered a tax-exempt financial service with no VAT deduction rights
• General expenses related to A’s administration are partially deductible based on the proportion of taxable activities
• The advance ruling is valid from January 29, 2025, to December 31, 2026

Source: vero.fi

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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