Are there any tax advantages to financial leasing?
What are the tax advantages of financial leasing for company cars?
Financial lease offers several tax advantages for entrepreneurs who want to lease company cars. One of the biggest advantages is the possibility of tax deductions. For example, the interest you pay on the lease is tax deductible. This means you can deduct the interest cost from profits before tax is calculated, resulting in a lower tax burden.
In addition, you become an immediate economic owner of the vehicle, which means you can also benefit from depreciation options. This can lead to significant savings on the total cost of the company car during the lease period.
How does depreciation work with financial leasing?
With financial leasing, you are the economic owner of the vehicle from the first instalment payment. This means you can put the vehicle on your balance sheet and depreciate it annually. Depreciation is the process of dividing the cost of a vehicle over its term.
Depreciation reduces the company's profits, which in turn is beneficial for tax purposes. The exact depreciation rates may vary, but it is important to know that these costs are tax deductible, which contributes to the financial lease benefits.
Are there any differences between financial lease and operational lease?
Financial lease and operational lease are two different forms of leasing, each with their own characteristics and tax advantages. With financial lease, you are the economic owner of the vehicle, which means you can enjoy tax benefits such as interest deduction and depreciation.
Operational leasing, on the other hand, is more similar to renting. The vehicle remains the property of the leasing company, and you pay a fixed amount for its use. Tax advantages such as depreciation do not apply here, but you also do not have to worry about residual value or maintenance after the lease term.
What costs are deductible on a financial lease?
With financial leasing, there are several costs you can deduct. Besides the interest, which is tax deductible as mentioned earlier, you can also deduct depreciation costs. This contributes to a lower tax burden.
In addition, other costs such as insurance premiums, maintenance costs and any extra accessories you add to the vehicle are also often deductible. It is important to look carefully at which specific costs are deductible for your situation to take full advantage of tax benefits.
What are the business benefits of financial leasing?
Financial leasing offers significant business benefits. One of the main advantages is that you do not have to make a large one-off investment, leaving your working capital available for other important business activities. This helps optimise your cash flow.
Furthermore, fixed monthly costs allow you to better budget and plan your finances. This way, you can accurately predict and manage the cost of your fleet, contributing to stable financial planning for your business.
How can Van den Hurk Bedrijfswagens help you choose the right leasing option?
At Van den Hurk Bedrijfswagens, we understand that every customer has unique needs when it comes to leasing commercial vehicles. We offer an extensive range of leasing options, including financial leasing, and are happy to help you make the right choice.
Our experienced staff are ready to advise you on the best leasing option for your specific situation. Whether you are a self-employed person looking to preserve your working capital, or a medium-sized business requiring multiple vehicles, you will find the expertise and support you need with us. Feel free to contact us to discuss your options and work together to find the best solution for your commercial vehicle needs.
