Operational leasing is a service that allows you to use a vehicle for a certain period of time (12-60 months) but without an option to acquire ownership. This type of service is preferred by companies that want to plan their costs through fixed monthly installments.
– Accounting for all costs related to the rented vehicle
– No additional maintenance cost
– Reducing the amount of your company`s taxes by monthly deduction of your companies` lease payments
– Full technical support is provided, insurance and warranty of the car
– No fleet management needed
When we speak of Operation Lease, the owner of the car transfers the right of use of the certain vehicle for the period of the contract and against payment to the Lessee. All payments by the Lessee are treated as operating expenses at the income statement and expenditure. Also, the Lease does not affect the balance sheet.
No risk of the property is taken, only the pleasure of using the car.
Finance Lease, on the other hand, is much more risk-taking activity.
It is recognized as an asset and a liability in the balance sheet
It is important to designate that the Lessor can claim tax relief on a leased asset only if it is under the Operating lease form.
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