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| Certain rules for financial leasing have changed for entrepreneurs |
| Bratislava, 02.05.2025 |
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| Financial leasing is a popular way for companies to finance the purchase of cars and trucks, machinery, technology or real estate. At the beginning of this year, legislative changes in the field of value added tax (VAT) came into effect, which also apply to leasing. Now, most financial leasing with the right to purchase is considered a supply of goods, and the basic VAT rate has also increased from 20% to 23%, explained Martina Rybanská, PR and internal communication specialist at the Slovak Chamber of Tax Advisors (SKDP).
“With effect from 1 January 2025, there have been changes in the field of VAT in Slovakia that affect financial leasing. These changes have brought about the harmonisation of domestic rules with European case law and may have an impact on the tax burden and cash flows of business entities,” she warned.
Financial leasing, in which the right to purchase is agreed at the end of the contract for a symbolic price, is classified as a supply of goods for contracts concluded since January of this year. VAT on the entire leasing contract will therefore be applied when the object is handed over to the lessee. At the same time, financial leasing contracts with the right to purchase will also exist in parallel, for which the VAT regime does not change. These will be contracts in which the lessee has other termination alternatives in addition to acquiring the object.
For contracts concluded until December 31 of last year, financial leasing with the right to purchase was considered a supply of a service with a spread tax liability or deduction, regardless of the amount of the purchase price at the end. “The legislative change means that if, for example, an entrepreneur acquires a car in 2025 through a financial lease with the right to purchase, he can deduct VAT from the entire payment at the beginning of the lease for most leases,” explained tax advisor Juraj Ďuratný from the SKDP.
Another important change this year, also affecting lease financing, is the increase in the basic VAT rate from 20% to 23%. The Chamber also reminded that we should not forget about the change in the leaseback regime from January 1, 2024. This is now considered a financial service exempt from VAT, similar to a loan. In application practice, it is therefore important for entrepreneurs to correctly evaluate the type of lease from a VAT perspective.
"This determines when and in what amount the entrepreneur will have the right to deduct. It is also important to minimize the risk of errors that could lead to sanctions. A tax advisor can also point out risks that could lead to additional tax burdens and can help prepare for a possible tax audit and will oversee the alignment of documentation with the law," added Ďuratný.odkaz na stránku |
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Address : Euro-Brew Ltd., Hlboká 22, 917 01 Trnava, Slovakia
Tel. : +421 33 53 418 53, Fax : +421 33 53 418 52, E-mail : info@eurobrew.sk |
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