So you are not borrowing money, but the machine or car itself. You pay monthly installments at the agreed interest rate. The installments often include accident insurance, third party liability insurance and possibly also risk insurance against inability to repay, which saves you a lot of worries about fleet management.
” The leasing company will basically take care of the purchase of the item, negotiate the terms of the purchase, or provide quality insurance. The lessee will receive financing that is usually cheaper and more accessible than a classic loan, because the financed item serves as collateral for the leasing operation with its value, and in addition, the customer can better plan and optimize cash flow through leasing,” says Neuvirth.
In the case of financial leasing, ownership of the vehicle is chinese overseas africa database transferred to the lessee after the end of the repayment period .
Financial leasing from a tax and accounting perspective
You do not record the leased asset in asset accounts .
Therefore, ask yourself right from the start how long you plan to building brand community: the new era of engagement finance the vehicle or machine in the leasing contract compared to its depreciation period. ” If the period is significantly shorter than the depreciation period, choose a loan, ” warns Neuvirth from ČSOB Leasing.
A big difference also lies in the payment of value added tax . With financial leasing, you pay VAT on individual installments, while with loan financing, you pay VAT on the entire value of the acquired asset.
Financial leasing and its disadvantages
The disadvantage of leasing is that you cannot do whatever you want with a car that is owned by the leasing company . For example, you cannot sell it, lend it, drive more kilometers than you have in the contract, or choose insurance according to your preferences.
Another disadvantage compared to a loan is, according to thailand data Section 21d, paragraph 2 of the Income Tax Act, the statutory minimum duration of the loan, derived from the depreciation period of the item pursuant to Section 30, paragraph 1 of the Income Tax Act, or the depreciation period pursuant to Section 30a (extraordinary depreciation) or Section 30b (depreciation of assets for the production of electricity from solar radiation) at the time of conclusion of the contract.
” In any case, for example, if a customer, an entrepreneur, needs financing for the purchase of a new commercial vehicle for a period of five years (the minimum period for a passenger car according to Annex No. 1 to the Income Tax Act and depreciation group number 2, editor’s note), we would certainly recommend that he arrange a financial lease, both in terms of price and other parameters, as the most advantageous option ,” says Neuvirth.
TipAccounts for legal entities and sole proprietors from ČSOB are free of management fees and without any conditions , including free contactless payment cards. Open a corporate and business account online in a few minutes.
Example
Mr. Novák needed a new tire balancing machine, so he agreed on a financial lease for a period of 40 months in January 2024. The minimum financial lease period in this case is 3 years (the subject of the financial lease is tangible assets classified in depreciation group 1 according to Annex No. 1 to the Income Tax Act).