THE AMENDED VAT LAW SUPPORTS LEASE – UNICREDIT LEASING IMMEDIATELY ADJUSTS ITS OFFER OF FINANCIAL PRODUCTS
The changes stemming from the amendment to the VAT Act, which entered into force on 1 April 2009, mainly concern up to 3.5-tonne passenger cars. The opportunity for VAT payers to deduct VAT upon acquiring any type of a passenger car is a change that everybody was waiting for. In the event of financing the vehicle by means of lease or loan, this new option can be applied to all automobiles delivered for use after 1 April 2009. The amendment has also brought some other changes that help to cut costs on vehicle acquisition. They include, for example, a changed method of calculating the insurance premiums from the price net of VAT, thanks to which premium payments will be lower, and the abolishment of double VAT taxation in the event of operating lease. Thanks to an amendment to the Income Tax Act, the minimum term of finance lease agreements has been shortened by six months.
“In the case of financing the purchase by way of lease or loan, the opportunity to deduct VAT for all types of passenger cars has some additional positive implications that influence the overall amount of the monthly payments,” says Jiří Vintr, Manager, Product Development at UniCredit Leasing. “Clients who are VAT payers will therefore save money thanks not only to deducting VAT from the vehicle acquisition price but also lower premium payments, which will newly be calculated from the acquisition price net of VAT, and the abolishment of double VAT taxation in the case of operating leases,” clarifies Jiří Vintr. However, it is important to note that these changes only apply to automobiles that are delivered to clients after 1 April 2009. “In respect of all types of products we have registered clients waiting for the period following the entry of the amendment to the VAT Act into force,” adds Jiří Vintr. Naturally, the opportunity for SMEs to use more advantageous financing supported by EIB continues to apply to all products.
The changes resulting from the amendments to the VAT Act and the Income Tax Act, which have a positive impact on financing by means of lease or loan, are as follows:
- The opportunity for VAT payers to deduct VAT in respect of all passenger cars delivered to clients after 1 April 2009;
- Changed base for premium calculation – premiums are calculated from the price net of VAT, which helps to reduce the insurance payments;
- Abolishment of double VAT taxation in respect of operating leases of passenger cars, which helps to cut the monthly lease payments; previously, lease payments were calculated from the price including VAT and then liable to tax at the VAT rate applicable to rent; now, the payments are calculated from the price net of VAT and are further liable to VAT at the rate applicable to rent;
- The minimum term of finance lease payments has been reduced by six months for the second and third depreciation categories, which helps to mitigate the disparity between the effective time of using, say, an automobile and the duration of tax depreciation; newly, the minimum term of finance lease agreements has been set at 54 months for the second depreciation category (includes passenger cars) and at 114 months for the third depreciation category.
Additional information:
UniCredit Leasing CZ, a.s. is part of the UniCredit Group, a reputable European financial group. In the Czech Republic it has more that 310,000 executed financing contracts in its portfolio, worth a total of more that CZK 176 billion. Its universal offer of financing includes leasing, lending, and hire purchase. It offers the financing of almost all commodities – motorcycles, passenger cars and utility vehicles, trucks, lorries, and other vehicles, plant and machinery, and also real properties. The offer is complemented by its subsidiary companies Renault Leasing, UniCredit Fleet Management (operating lease), and UniCredit pojišťovací makléřská. back
