Direct leasing and leaseback are two forms of financial leasing, direct leasing means that the financial leasing company from the lessee to buy the required equipment, the lessee to provide services and collect rent from the lessee until the equipment to pay the principal and interest on the time and the equipment is handed over to the lessee, and leaseback means that the enterprise sells the existing equipment leasing company and leasing company will be the transfer of the equipment to the enterprise, and the enterprise monthly pay rent and take the equipment back. Direct leasing solves the enterprise's equipment needs, and leaseback solves the enterprise's long-term working capital needs.
In addition, direct leasing and leaseback involve different taxes. The value-added tax (VAT) rate for equipment purchased under direct leasing is currently 13%, and the input tax can be offset against the output tax. Leaseback, on the other hand, requires the payment of VAT, business tax and other taxes.
What does finance lease mean?
Financial leasing means that the lessor, according to the lessee's specific requirements for the leased property and the choice of the supplier, finances the purchase of the leased property from the supplier and leases it to the lessee. The lessee pays rent to the lessor in installments. During the lease period, the ownership of the leased property belongs to the lessor, and the lessee enjoys the right to use the leased property. The expiration of the lease period, the lessee in accordance with the agreement of the financial lease contract has paid the rent and perform all the obligations, the attribution of the leased property did not agree or agreement is not clear, can be supplemented by the agreement of the leased property; can not reach a supplemental agreement, in accordance with the relevant provisions of the contract or in accordance with the trading practice to determine; is still can not be determined, the ownership of the leased property belongs to the lessor.