Financial leasing is a specific type of activity with increased requirements for taxation, accounting and regulation. An error in choosing a taxation system can lead not only to fines, but also to the loss of the right to carry out activities. In this article, we will consider, What taxation system is permissible and optimal for KVED 64.91 "Financial leasing"«.
What is KVED 64.91 - financial leasing?
Financial leasing is a financial service in which the lessor transfers property to the lessee for use for a specified period of time for a fee with or without subsequent transfer of ownership.
Key features of financial leasing:
- the property is purchased specifically for leasing;
- the term of the contract is usually close to the term of full depreciation of the object;
- Lease payments include the value of the property and the lessor's remuneration;
- the activity belongs to financial services.
It is the last point that is decisive when choosing a taxation system.
What taxation systems are available for KVED 64.91?
General taxation system
The general system is the main and actually the only correct taxation system for financial leasing.
For legal entities (LLC):
- income tax - 18%;
- VAT - 20% (mandatory in most cases);
- full accounting;
- financial reporting.
For sole proprietors:
- Personal income tax number - 18%;
- military duty — 1.5%;
- ECV;
- complex accounting and high tax risks.
Advantages of the overall system:
- full compliance with legislation;
- no risk of losing status;
- the ability to work with VAT;
- legal work with large contracts.
Disadvantages:
- more complex accounting;
- higher tax discipline;
- the need for professional accounting support.
Is a simplified system (single tax) possible?
Financial leasing not suitable for simplified taxation system.
Reasons:
- financial leasing directly belongs to financial services;
- the provision of financial services is prohibited for single tax payers;
- Even a single operation can lead to:
- cancellation of the status of a single tax payer;
- additional tax assessment;
- fines and penalties.
A common mistake is registering an individual entrepreneur in group 2 or 3 of the single tax with KVED 64.91. This high tax risk, even if the activity is not actually underway yet.
Sole proprietorship or LLC for financial leasing
Sole proprietorship and financial leasing
Formally, an individual entrepreneur can register KVED 64.91, but in practice this is almost never used.
Reasons:
- complex tax burden;
- limited trust from banks and partners;
- VAT problems;
- high risks during inspections.
Individual entrepreneurs in financial leasing — exception, not a rule.
LLC is the best option
For financial leasing LLC is the most appropriate form.
Advantages of LLC:
- full compliance with financial legislation;
- the ability to work with VAT;
- convenient profit taxation model;
- trust from customers, banks and investors;
- the possibility of scaling the business.
VAT in financial leasing
In most cases, financial leasing is subject to VAT taxation.
Important nuances:
- VAT is charged on leasing payments;
- it is possible to form a tax credit when purchasing a leasing object;
- a clear division of payments is necessary (principal, interest, commissions);
- Errors in VAT accounting are one of the most common causes of fines.
Example of tax burden
Conditionally:
- leasing object — 1,000,000 UAH;
- Leasing payments — UAH 1,300,000.
Tax burden on the overall system:
- VAT - according to the payment structure;
- income tax - on net financial result;
- accounting for depreciation and financial income.
This approach allows optimize taxes legally, without violations.
The main risks of choosing the wrong system
- cancellation of the status of a single tax payer;
- additional tax assessment for several years;
- fines and penalties;
- blocking tax invoices;
- litigation with tax authorities.
Recommendations
- For KVED 64.91 choose a general taxation system.
- The optimal organizational form is LLC.
- Work with an experienced accountant who has experience in financial services.
- Do not use "simplified" schemes - they do not work in financial leasing.
Conclusion
Financial leasing is not a classic business for a simplified system.
The only correct and safe choice is a general taxation system, preferably in the format of an LLC with VAT. This approach ensures legality, stability and the possibility of business development without tax risks.
