A leasing agreement with FlexiCommercial is not just a great way to always have the latest equipment for your business – as it can deliver great tax benefits to your business too. *
With a leasing agreement, you can typically deduct the full cost of payments from your taxable income.
If you instead secure a loan from a bank or other financial institution to buy the same equipment, you can deduct only the interest portion of your repayments.
This can mean a difference of thousands of euro per year in what you can set against your tax liability – meaning big savings for your business where it matters most.
Depreciation – Where an asset is purchased outright, capital allowances may be available on the asset, usually at a rate of 12.5 per cent per annum over eight years for plant and machinery. Where the period of the lease is less than eight years, the lease will usually give a better result due to the availability of a greater tax deduction over a shorter period of time in that case.
VAT – Where a sole trader or company is not VAT registered or is exempt from VAT, it may be advantageous from a cash flow point of view to lease the asset. This allows VAT cost to be spread over the term of the lease as opposed to having to incur the full upfront VAT cost on the initial purchase of the asset where a loan is take out to acquire the asset.
* FlexiCommercial does not provide legal, tax, or accounting advice. See your tax advisor for details.