About Leasing

VAT in Leasing

Those that are in the group of machinery and equipment specified in the decree of Cabinet of Ministers enforced and promulgated in the Official Gazette dated 27th December 2011 and numbered 28155, VAT has started to be applied as 1% for rentals and deliveries under "Leasing contracts concluded after the publishing date of the decree".

According to this decree;

• Leasing VAT rate applicable to all leasing operations carried out as a part of investment incentive certificate regardless of the GTIP numbers or new/used states.
• In the event that the machinery and equipment (excluding used ones and their assemblies, parts, accessories and fixtures) with GTIP numbers specified in paragraph 17 of the first article of the decree are subject to leasing and the following conditions are met, the applicable VAT rate shall be 1%.
• Product groups in these tariffs must be unused. In the event that they are used, no deduction shall be applied and the VAT shall be applicable at the rate applied prior to the decree. VAT rate applicable for assemblies, parts, accessories and fixtures is 18%.
• Due to the fact that leasing companies exempt these products from VAT by means of VAT taxpayers, they need to be leased to taxpayers that are not subject to VAT but income and corporate tax taxpayers, the revenues of which are determined on balance sheet basis.

VAT of all machinery and equipment which are normally purchased and are out of the scope of GTIP numbers stated in the annex of the said decree enforced and promulgated in Official Gazette have been fixed as 8% or 18% based on the equipment. Below you may find some of the equipment with VAT decreased to 1% pursuant to the GTIP classification stipulated in the decree.