Working in the forestry sector, one often has the opportunity to see the incompetence of state officials when it comes to drafting and applying tax laws. One of the most painful issues that must be highlighted is personal income tax – it is written in such complex and difficult-to-understand language that it causes headaches not only for business owners but even for seasoned accountants and lawyers. In an attempt to understand the explanations of these taxes, people often look for help from a business partner or employer, who, unintentionally, can be placed in the role of a fraudster. If the government is thinking of opening up the tax regulation, it should primarily do so with simplification in mind.

Section 17, Paragraph 10.² of the Law on Personal Income Tax stipulates that when withholding tax from income from the sale of standing timber, expenses related to forest regeneration in the amount of 25% are deducted from the payable sum before tax calculation, whereas from income from the sale of round timber, expenses related to the preparation and sale of the timber in the amount of 50% of the payable sum are deducted. If this explanation does not seem complex enough and has not confused you yet, a 10% tax rate is applied to these 25%, which ultimately results in a 2.5% rate. Therefore, when selling felling sites, 25% is the non-taxable personal income tax, and 7.5% is the payable tax, while when selling trees at the roadside, i.e., by felling them yourself, 50% is the non-taxable personal income tax, and 5% is the payable tax.
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