In the late 1990s, more than 200 farmers in Groningen and Drenthe planted production forest on their farmland with a subsidy. Unexpectedly, they are now confronted with mega claims from the tax authorities.
“What the tax authorities do here is really not possible,” says retired farmer Abel Prins (87) from Assen. The income tax assessment of 7 tons has fallen raw on the roof. The same applies to fellow sufferers, some of whom have to pay more than a million euros.
Completely unjustified, not only the victims, but also government employees and advisers who were involved in the forestry projects believe. But the IRS is standing firm.
Tree cultivation as a replacement arable crop
What is going on? The Ministry of Agriculture assured farmers participating in forestry projects at the time that the plots would retain their agricultural land use and would not become forest land. The temporary tree cultivation was seen as a replacement arable crop. An important agreement because agricultural land is worth much more and after sale it can earn a lot of money. A farmer does not pay income tax on the profit he makes on his fields (agricultural exemption).
To the astonishment of the victims, the tax authorities later ruled otherwise. He believes that the destination has been ‘forest’ for years and that the agricultural exemption (profit is tax-free) does not apply over that period. The return of the farmers is for the most part seen as profit from business and that is taxed. Surviving relatives who inherit land are also presented with substantial claims afterwards.
Farmers cheated
,,This was definitely not the intention”, responds Jan Rietema from Scharmer when asked. As a policy officer at the Ministry of Agriculture, Nature Management and Fisheries (LNV), he was involved in the elaboration of the European subsidy scheme for Dutch farmers at the time. “The intention was temporary forest without a change of destination. Otherwise you won’t get a farmer to forest.” Are the farmers being cheated? “You could say it that way.”
“Unbelievable,” says Rinck Zevenberg from Wedde, who at the time, as a nature and forest information officer of the same ministry, had the task of promoting forest subsidies among farmers. “I have announced things that the government and tax authorities are not living up to now. They are scammers. What an unreliable government.
Much to the frustration of those involved, the court and the Court follow the reasoning of the tax authorities. The matter is now before the Supreme Court. If they also declare the objections unfounded, all former forest farmers will sooner or later (when sold or by inheritance) be confronted with large claims from the tax authorities.
Read Saturday on dvhn.nl the personal story of farmer Abel from Assen, who suddenly received an attack of 700,000 euros thirty years after planting trees in his yard.