Tax advantages of Operational Lease and Financial Lease

Tax advantages of Operational Lease:

Avoiding depreciation and residual value: With operational leasing, you do not bear the risk of depreciation and residual value of the vehicle. This means you are not affected by the car's depreciation, which can lead to tax benefits.

VAT deduction: Monthly lease payments usually include VAT. Business users can deduct this VAT, resulting in lower tax liabilities.

Fixed costs:With operational leasing, costs are clear and predictable, making it easy to include them in your accounts.

No impact on balance sheet: As the car remains the property of the leasing company, it does not appear on your balance sheet, which can be beneficial for your financial ratios.

Fiscal benefits of Financial Lease:

Depreciation costs: If you choose financial lease, you can take advantage of tax benefits by including depreciation costs in your business accounts.

Impact on the balance sheet: The car is capitalised on your balance sheet, which can help improve your equity position.

Interest deduction: The interest rate of the financing can usually be deducted from your taxable income, reducing your tax bill.

Self-ownership: After the leasing term ends,, you become the owner of the vehicle, which can have significant long-term benefits.

It is important to note that the specific tax benefits can vary depending on your personal situation. Therefore, we always recommend consulting with a lease.car advisor and an accountant before making a decision on which type of lease suits your needs.

To sum up, both operational and financial leases provide tax advantages that can help businesses reduce the cost of leasing a vehicle and maximize their tax returns. It is important to consider these benefits carefully when choosing the right leasing form for your personal situation.

Frequently asked questions

How can I benefit from VAT deduction when leasing a car?

When leasing a car, you can often benefit from VAT deduction. This means you can reclaim the VAT paid in the monthly lease instalments from the tax authorities. This reduces your overall tax liabilities and can be a financial advantage for business users.

What tax advantages does financial leasing offer compared to operational leasing?

Financial leasing offers tax advantages such as the inclusion of depreciation costs in your business accounts, interest costs that are often deductible from your taxable income and the ability to own the car after finalizing the leasing term. These benefits can provide financial advantages compared to operational leasing. With operational lease, you often do have an option to buy the vehicle at the end of the lease period. This is an option and not an obligation.

What are the implications of depreciation costs when leasing a car?

Depreciation costs when leasing a car refer to the decrease in value of the vehicle over time. With financial leasing, you can often include these costs in your business accounts, which can result in tax benefits by reducing your taxable income.