Operating lease

Operating lease is a business transaction of a physical or legal body that implies delivery of property to the Lessee that comes within the scope of definition of Fixed Assets, under conditions different to finance lease.

Thus operating lease is long-term rent of a vehicle with accounting and tax depreciation on the balance sheet of the Lessor.

By operating lease:

• The vehicle remains on the balance sheet of the Lessor.
• The leasing payments apply 100% to Total Costs for commercial vehicles and 50% for passenger vehicles.
• Financial liabilities are not shown in the balance sheet.
• The Lessee is under no obligation of the vehicle purchase at lease-end, although he can negotiate the top-priority right to buy it out.
• The lease term can be less than one year.

Accounting in operating lease
The vehicle cost is not displayed in tax accounting

The Lessee can add up to 100% of charged leasing payments to Total Costs

The Lessee records the aggregate VAT in leasing payment for a vehicle to tax credit

Operating lease is an off-balance-sheet financing method: unlike credit, long-term liabilities for leasing payments are not shown in client’s balance sheet and your funding limit might be optimized for financing your business operation.

Choosing operating rent you choose a comfortable model of financing your business and fleet outsourcing, within which you receive full range of services for your car fleet.