Return leasing, unlike a classic financial lease, involves two parties (a seller, a lessor and a lessee), and two, in the transaction. This is a type of leasing in which the seller of its subject and the lessee are one person. This is an effective tool for replenishing working capital or refinancing capital investments.
It is more profitable than applying for a bank loan or acquiring new assets at your own expense.
What is the mechanism of such operations? How does leaseback work? The company sells its own property to a leasing company and immediately becomes a lessee (leases it). That is, the client receives 100% of the value of the property, and at the same time it remains in its use ("returned"). In this way, you can get working capital without attracting additional sources of financing.
Two contracts are concluded at the same time (sale and lease). Such a transaction resembles the issuance of a secured loan, only the costs of it will be lower than the interest paid to the bank. In addition, leaseback allows the company to minimize the cost of paying taxes, since leasing payments are fully attributed to the cost of production.
Savings in tax are possible through the use of accelerated depreciation, which is allowed in this case. At the end of the contract, the property at the residual value (equal to almost zero) goes to the balance of the enterprise. Therefore, using reverse leasing, you can reduce the tax on such property to a symbolic amount.
The property of the organization (enterprise) in this case does not actually change its location and can still be used in the production process.
However, there are certain nuances of concluding such transactions. Therefore, in order to assess the risks, the potential lessee before concluding the contract must calculate the tax consequences so that the transaction does not prove to be unprofitable. This is especially true if it is necessary to lease equipment, machinery or cars, which are reflected on the recipient's balance sheet at a lower price, since taxes will be calculated at actual prices.
The tax authorities strictly follow back leasing transactions (suspecting the possibility of fraud with payments), paying close attention to those enterprises that have problems with documentation and tax accounting. Returnable leasing is used to improve balance sheet performance by selling property not at residual value, but at market value, which usually substantially exceeds it. But the law on leasing does not prohibit the lessor from buying property from its owner. Therefore, the leaseback agreement is fully consistent with the requirements of the law.
Nevertheless, it is not recommended to conclude such transactions for too young enterprises that have not yet become economically strong. Leasing is justified during periods of serious modernization of stable enterprises, which currently lack their own funds or lack opportunities (time) to search for more suitable financing options.
