The lessor undertakes to acquire ownership of the property determined by the lessee from the seller indicated by him and provide the lessee with this property for a fee for temporary use, with and without the right to redeem it. Most often, leasing as a financing tool is used by legal entities, this is due to tax benefits. Consumer leasing is widespread in world practice. The contract may provide that the choice of the seller and the acquired property is made by the lessor. The lessee may initially be the owner of the property.
The acquisition of fixed assets in the form of leasing allows you to reduce the tax burden of the enterprise. In particular, payments under leasing agreements reduce the tax base for income tax (they are expenses). In addition, accelerated depreciation (with a factor of 3) allows the balance holder to reduce the base for calculating property tax and further reduce the base for calculating income tax. The planning of VAT flows in leasing requires a careful approach in accordance with current regulations and can sometimes provide additional benefits in leasing.
A special case is leaseback, in which the lessee is also the seller of the leased property. That is, the organization leases equipment (or other property) that originally belonged to itself. In case of leaseback, two contracts are concluded between the lessor (leasing company) and the organization: the sale and purchase of property and its leasing. Both documents are signed simultaneously.
Leaseback does not imply any changes in the production process. It is intended to cover the lack of working capital of the company, which receives a lump sum money for the "sold" property. This transaction can be compared with the issuance of a secured loan. Only for the lessee, the costs of a leasing agreement are usually lower than the interest on bank loans. A different taxation and depreciation structure can make leasebacks more attractive.
