Do I have tax benefits with Financial Lease?


Financial Lease offers you many financial and fiscal benefits. There are different rules for starting entrepreneurs and entrepreneurs who already have a business. Here you can find all the rules for 2013.

Example
Throughout the example we assume the tax rate is 52%, the highest rate as applied in the Netherlands.
In the example we assume the purchase of a van, with a purchase price of € 15000, based on Financial Lease for 60 months, this makes the amount of € 307 per month to lease. (Without deposit or final term)

The total amount to be paid on the basis of the agreement is always € 307 * 12 = € 3684 per year.


Investment allowance

Because with Financial Lease you are the economic owner of the vehicle, you made an investment and you are entitled to the so-called  "small-scale investment, refund".  What it means is that you will get the tax back form the total investment. The investment refund percentage is 28%, which means that this percentage can be deducted from the purchase price.

Example
You pull off 28% € 15000, ie € 4200 deduction against the tax, this means a net tax saving of € 4200 * 52% = € 2184 Tax Savings through Investment deduction.


Depreciation

You are the beneficial owner of your purchased vehicle, why should you purchase from the date this account. For vehicles subject to a depreciation period of 5 years. This means that with depreciation, the purchase price of your new car is 5 years of earnings may deduct.

Example
In our example, this means that you have an annual amount of € 15000 divided by 5 years = € 3000 per year of income can deduct. You may therefore € 3,000 of earnings pick, based on the tax rate is a net tax saving of € 3000 * 52% = € 1560  Tax Savings through amortization.


Other lease options

In other lease options like short lease, operational lease and renting, you are just 'user' of the vehicle, this means that you are no economic owner and not allowed to depreciate. Financial Lease is the only lease opportunity with depreciation!

Deductibility

As an entrepreneur in the Netherlands you can deduct the interest that you pay your purchased vehicle.  This is called interest deduction.

Example
You pay according to the contract the first year € 307 * 12 months = € 3684, this is € 1164 interest (see Annex). This interest is deductible, so you must subtract € 1164 , based on the tax rate is a net tax saving of € 1164 * 52% = € 605 on tax deductibility Savings.

Total tax savings:
  • Savings Deduction of interest: € 605
  • Depreciation Savings: € 1560
  • Savings Investment: € 2184
  • Total saving: € 4349

Annex with calculation and details


1. Interest and repayment calculation

monthly sum

repayment

Interest

total repayment

outstanding amount

Total interest

1: 307,03

202,03

105,00

202,03

14.797,97

105,00

2: 307,03

203,44

103,59

405,47

14.594,53

208,59

3: 307,03

204,86

102,16

610,33

14.389,67

310,75

4: 307,03

206,30

100,73

816,63

14.183,37

411,48

5: 307,03

207,74

99,28

1.024,37

13.975,63

510,76

6: 307,03

209,20

97,83

1.233,56

13.766,44

608,59

7: 307,03

210,66

96,37

1.444,23

13.555,77

704,95

8: 307,03

212,14

94,89

1.656,36

13.343,64

799,84

9: 307,03

213,62

93,41

1.869,98

13.130,02

893,25

10: 307,03

215,12

91,91

2.085,10

12.914,90

985,16

11: 307,03

216,62

90,40

2.301,72

12.698,28

1.075,56

12: 307,03

218,14

88,89

2.519,85

12.480,15

1.164,45



2. investmentdeduction table
Totaal amount on investments   Amount
more then not more then  
- €2.200   0
€2.200 €54.234   28% from the investment amount
€54.234 €100.600   €15.211
€100.600 €301.800   €15.211 minus 7,56% from (investment minus € 100.600)
€301.800 -   0
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