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He is faced with a difficult choice: to issue a loan at an exorbitant interest rate, to rent the property, or to contact the owner of the property directly and take it on a long-term lease with the right of further purchase.
Subtleties of calculating depreciation on a leasing object
According to the Tax Code of the Russian Federation, the balance holder of the subject of financial lease, which can be either one or the other party, is required to pay property tax under a leasing agreement.
Article navigation
- Briefly about property tax
- Who pays property tax in leasing
- Property tax using the example of car leasing
- Taxation of a car on the lessee's balance sheet
- Calculation of tax on property on the lessor's balance sheet
- Payment of property tax on a leaseback object
- Tax on leased property after redemption
- conclusions
Property owned by individuals and businesses is subject to taxation. The article highlights the situation in which the owner is one person, and the owner is another. This happens if the item is rented out on a financial lease (also called leasing). Who pays property tax in this case, and how to calculate it?
Be careful with car leasing
The main attractive feature of leasing agreements regarding vehicles is the opportunity to use the vehicle, even if there is no financial opportunity to purchase it immediately, as well as the prospect of obtaining ownership of it.
But there are also negative features of such a transaction that should be taken into account and the risks correctly assessed before concluding a contract:
- The credit is still lower. Interest on a leasing agreement is usually higher than bank interest. But the conditions of banks differ significantly and are not subject to revision and adjustment.
- "Medical examination" of the car. Until the end of the contract, the lessor will regularly inspect the vehicle, which is still legally owned by him.
- You'll have to ask first. The recipient of the car will not be able to carry out any legal actions with it without the permission of the lessor.
- Remember, the car is not yours yet. If during the validity of the leasing agreement the recipient violates any conditions (payments were not made on time, mandatory technical inspection was not completed, maintenance was not carried out on time, etc.), the car will not become the property of the recipient, he will lose this right.
Briefly about property tax
This tax is also called property tax. Property tax is levied on real estate and other objects equated to fixed assets. The assessment of a property when calculating a property tax is carried out not at its residual value, but at its cadastral value.
The tax rate limit is 2.2% established by federal legislation. Regional values may be slightly lower.
Taxation applies to real estate, the ownership of which is legally justified in the following forms:
- trust management;
- temporary possession;
- part of the founding capital.
Property tax refers to direct regional taxes. Tax is calculated on the basis of Chapter 30 of the Tax Code of the Russian Federation. Its main characteristics are summarized in the table for convenience:
| Characteristic | Description |
| Object of taxation | Assets of an enterprise that are fixed assets or equivalent to them |
| Tax base | Average annual value of the asset (based on Article 375 of the Tax Code of the Russian Federation) |
| Tax rate, maximum | 2,2% |
| Subjects of taxation | Russian and foreign enterprises operating in the Russian Federation |
| Tax period | 1 year, until March 30 |
Property leased is classified as fixed assets and is therefore subject to taxation. Another question is who pays it. A finance lease is similar to a purchase on credit:
- the user (owner) receives the item immediately and can use it.
- the cost is paid gradually;
- most often, the lessee, like the credit debtor, pays an initial payment (advance);
- the item is provided to the one indicated by the recipient - in contrast to rent, which involves choosing from the available assortment;
- most often, after the expiration of the financial lease agreement (as well as lending), the leased item belongs to the user;
- As a rule, the object is a completely new thing.
The presence of these similarities determines special rules for taxation of leased items.
The legislative framework
The legal prerequisites for the emergence of leasing relations were laid down back in 1964 in the Code of the RSFSR in force at that time (as amended in 1992 and 1995), in Art. 8: civil rights may arise from mutual agreements and transactions, in accordance with the legislation of the republic.
For the first time, the concept of leasing appeared in the legal field under the Presidential Decree of September 17. 1994 “On the development of leasing legal relations...”, in which there were many legally incorrect interpretations and definitions. To implement the order of the President, the Government of the Russian Federation issued a Temporary Regulation, which, in fact, marked the beginning of the emergence of such a sphere of economic activity as leasing.
A more detailed explanation of legal relations, rights and obligations of the parties is formulated in the New Civil Code of the Russian Federation, Ch. 34, entirely dedicated to leasing.
There is no separate Federal Act, since general requirements for property lease agreements may apply to such legal relations, and legislators consider this state of affairs to be legally justified.
But the limited legal norms have led to some conflicts, so the Government is adopting a separate Act “On Leasing”, No. 164-FZ, which already contains the basic concepts of agreements, an expanded interpretation of the obligations and rights of the parties to the transaction.
Who pays property tax in leasing
According to the general rule established in subparagraph 3 of paragraph 12 of Article 378.2 of the Tax Code of the Russian Federation, only the balance holder of the subject of the financial lease is required to pay property tax under a leasing agreement. An exception is the real estate of organizations taxed at cadastral value. Leasing or not, the tax will be paid by the owner or owner with economic management rights (subclause 3, clause 12, article 378.2 of the Tax Code of the Russian Federation).
It should be remembered that the parties to the financial lease agreement themselves decide who will accept the leased asset on their balance sheet. This right is provided for by the Methodological Guidelines for Accounting, approved by Order of the Ministry of Finance of the Russian Federation No. 91n dated October 13, 2003 (clause 50).
In other words, both the lessor and the lessee can be the balance holder and the tax payer, depending on what agreement they come to. This decision must be recorded in the contract.
There are no questions if the lessor and the balance holder are the same legal entity. If the lessee has registered the item, then his accounting department must itself calculate depreciation, calculate the amount of the property fee and transfer it to the budget.
Property tax using the example of car leasing
A car is one of the most common leased items: using its example, you can look at how movable property tax is calculated. In this case, the amount of obligations itself is calculated according to the same scheme:
- The object is registered at the cost of acquisition.
- The depreciation amount is written off every month.
- The average annual value of property is determined as the arithmetic average of the cost of the item for each month (their sum is divided by 12).
- The result is multiplied by the tax rate and divided by 100.
Taxation of a car on the lessee's balance sheet
After leasing the car, the lessor records it in off-balance sheet account 011 as a leased fixed asset. From this moment on, he does not bear a fiscal burden, since the lessee pays the property tax and puts the item on his balance sheet (Tax Code of the Russian Federation, paragraph 1, Article 374).
The accountant of the balance sheet holder makes the following entries to place the fixed asset on the balance sheet of the enterprise:
| Correspondence | Operation description | |
| Dt | CT | |
| 08 | 76 | Registration of leased property at the initial full cost |
| 01 | 08 | Enrollment of leased property into fixed assets |
| 76 | 02 | Monthly deduction of depreciation amount from the subaccount of the cost of the leased asset |
After calculating the average annual cost and the amount of the property fee, the property tax is paid to the budget by March 30, which is on the balance sheet of the lessee enterprise. The transaction is reflected in account 68 “Calculations for taxes and fees”.
It is worth noting that it is much more profitable for an enterprise to leave a car on the balance sheet of a leasing company. This will significantly reduce the lessee's tax expenses. You can read about other nuances of car leasing in this article.
Calculation of tax on property on the lessor's balance sheet
The absence of the need to keep records of a fixed asset is one of the advantages of leasing, so the item most often remains on the balance sheet of the owner company, that is, the lessor. He also calculates depreciation, according to which the amount of tax liability for property collection is calculated (clause 1 of Article 374 of the Tax Code of the Russian Federation).
Property leased from the lessor is accounted for by the following entries:
| Correspondence | Operation description | |
| Dt | CT | |
| 60 | 51 | Payment of the supplier's invoice for the leased item |
| 08 | 60 | Reflection of acquisition costs |
| 19 | 60 | Accounting for input VAT |
| 03 | 08 | Capitalization of the leased asset as a profitable investment (using a special subaccount) |
| 68 | 19 | Acceptance of VAT for deduction |
| 03 | 03 | Correspondence of subaccounts “Property intended for leasing” and “Property transferred for leasing” (transfer of an object) |
| 20 | 02 | Depreciation charges (every month), starting from the month following the date of transfer of the item for leasing |
The accrual and payment of the property tax is based on the average annual value, the calculation of which is described above.
You can read more about the calculation of depreciation by enterprises for leasing objects by following the link.
Payment of property tax on a leaseback object
A natural question arises about the taxation of property transferred under leaseback. In this case, the lessee is the former owner of the item, who sold it and took a financial lease. At the same time, in most cases he remains the balance holder.
Movable property leased from the beginning of 2013 under leaseback is exempt from taxation if the relationship between the lessor and the lessee is not interdependent. Otherwise, there would be evasion of tax obligations to the budget with the collusion of affiliated entities.
Movable assets listed on the balance sheet as fixed assets or equivalent to them are subject to property tax, with the exception of:
- belonging to both the 1st and 2nd groups of depreciation according to OKOF;
- accepted for balance sheet accounting from January 1, 2013 (with the exception of transfers between affiliated enterprises received during liquidation and reorganization - in accordance with Article 381 of the Tax Code of the Russian Federation).
Basic postulates of TN in a leasing transaction
So, the main legal documents regarding the payment of TN when leasing vehicles state the following:
- the obligation to pay the TN lies with the owner of the vehicle;
- the lessee or the lessor may be considered the owner, depending on the circumstances;
- the person in whose name the car is registered determines the agreement concluded between the parties to the leasing transaction;
- vehicle registration can be issued for a permanent period or only for the duration of the leasing agreement;
- The transport fee is paid by the owner regardless of the registration period.
How to determine the owner
The agreement specifies the nuances of the transfer of property into ownership under the terms of leasing. Upon conclusion of the relevant agreement, it may be owned by:
- the lessor - until the leasing term expires and all its conditions, especially financial ones, are met;
- lessee - on a permanent or temporary basis (depending on the agreement).
NOTE! If the registration of ownership of the car is temporary, you must provide a copy of the leasing agreement and an agreement on the temporary registration to the car control authorities (traffic police or others).
The parties themselves decide who will be the legal owner of the leased asset and formalize it in a contract or leasing agreement.
Tax on leased property after redemption
After the end of the contract, the leased asset can be returned to the owner or purchased by the lessee. The procedure for calculating the property tax in both cases is similar, and the only difference is who will pay it from the moment of redemption until full depreciation.
Buy-out during a commercial lease is possible if no more than 75% of the initial cost of the leased asset remains on the balance sheet. When it is returned, nothing changes for the lessor - he continues monthly depreciation.
The transfer of the item into the ownership of the lessee changes the situation. The owner (user) becomes the owner. If he did not register the property, now in any case he will have to do this by making the following entries:
| Correspondence | Operation description | |
| Dt | CT | |
| 02 (subaccount “depreciation of leased property”) | 01 | Write-off of depreciation accrued over the term of the leasing agreement |
| 76 | 01 | Write-off of the residual value of leased property |
| 08 | 60 | Purchasing an item |
| 60 | 51 | Reflection of payment for the object to the lessor |
| 01 | 08 | Placing an item on balance sheet |
Depreciation will be calculated on the residual (redemption) value from the 1st day of the month following the registration of the purchased fixed asset.
Property tax is charged in the general manner - once a year based on the average annual value of the asset, by multiplying it by the interest rate prevailing in the region. As it is used and over time, its amount will decrease according to a pattern corresponding to the depreciation method adopted by the enterprise.
How to calculate?
Accounting transactions under leasing agreements include periodic payments similar to payments for renting property. Therefore, they must be taken into account in the same way as the fact of rent itself, that is, on the last day of the reporting period.
This technique is allowed only if the agreement does not provide for simultaneous payment of the redemption price.
Only the rental rate, which is subject to VAT, is taken into account. And the remaining part is attributed to depreciation expenses, but after registration of ownership.
Many legal scholars are debating the advisability of dividing rent and subsequent buyout. But the Ministry of Finance put an end to the dispute by giving its position in its explanations: here it is necessary to take into account the articles of agreement and the specifics associated with the allocation of different types of payments.
Therefore, if the text of the agreement does not mention the redemption price, but at the same time provides for the transfer of ownership and control to the lessee, then he can take into account the entire payment as a deduction from expense items to reduce the tax base.
