CUTTING SITE PURCHASE

According to cutting site purchase agreement, SIA “ACA Timber” buys growing trees from the owner, measuring them according to a mutually agreed methodology.

The company concludes two types of contracts:

• Based on mutually assessed volume
• Based on the volume of prepared materials

When selling growing trees, one must take into account the applicable tax payments. Before the tax is calculated, expenses related to forest regeneration — i.e., 10% of the payable amount — are deducted. As a result, the tax payable is 7.5% of the total amount paid to the seller.

Cutting site purchase, based on mutually assessed volume

For transactions involving growing trees, the first step is to determine what and how much will be sold. The volume to be harvested is determined by measuring each tree individually.

Since felling in the forest is permitted only after a felling permit has been issued, the contract is signed only after the State Forest Service has issued the felling permit.

When concluding a contract for the sale of growing trees based on mutually assessed volume, the following must be specified:

• agreement on the volume of wood to be harvested;
• payment for the trees is determined according to measurement results;
• the logging company also performs soil preparation and forest regeneration, for which a separate contract is concluded.

After the cutting site has been harvested, the timber volume is measured again at the place of sale (sawmill, port). If the actual harvested volume is greater than originally purchased, an additional payment is made to the forest owner.

Entrust us with restoring the harvested area by including in the contract that the logging company will perform soil preparation as well as the regeneration and maintenance of the new forest stand until it is officially recognized as regenerated by the State Forest Service.

Cutting site purchase, based on volume of prepared materials

In this case, an initial partial payment (an advance) is made based on the approximate harvest volume. The contract specifies assortment prices, and the final calculation is made according to the delivered or transported quantities in accordance with the contract terms and prices.

Since felling in the forest is only allowed once a felling permit has been issued, the contract is signed after the felling permit has been received from the State Forest Service.

When concluding a contract for the sale of growing trees based on the volume of prepared materials, the following must be specified:

• agreement on the potential assortments to be harvested in the cutting area;
• agreement on the price of each assortment;
• agreement on the quantity and price of wood purchased in advance;
• payment for the wood is determined according to measurement results — either based on the volume delivered to the cutting site or the volume transported from the site to the point of sale;
• the final settlement, after harvesting, delivery, and measurement, must be transferred to the seller’s bank account.

Entrust us with restoring the harvested area by including in the contract that the logging company carries out soil preparation and full forest regeneration and maintenance until the State Forest Service recognizes the area as regenerated.