Closed-end financial leasing and VAT capitalization

When closed-end leasing and VAT capitalization is used, the Client is given an invoice for asset purchase price balance on delivery of the lease object to the Customer. VAT amount is added to the principal and is deferred for the lease.

The Client may have tax credit entitlement in respect to an invoice and effect deferred VAT payments to UniCredit Leasing as part of the scheduled monthly installments. Interest payment is invoiced in the month of payment of the respective installment. Interest payment is exempted from VAT.

Interest payment is calculated on the net credit with VAT included. From a legal perspective, all assets, object of a lease contract, are property of the Lesser and are registered in his name. Upon delivery, they are recorded on the assets side of the Lessee’s Balance sheet to be retired to an amortization schedule.