Regarding the financial and taxation issues of financing sale and leaseback, Deep Space Network will give you a detailed analysis in the form of cases. Friends who want to know more related knowledge, come and learn together.
Financial lease and financing sale and leaseback
Financial lease: You buy something you don’t own yet, find a financial leasing company, and ask the financial leasing company to buy it. After buying it, you Pay rent, rent the right to use this thing. After the contract period expires, the ownership of the thing belongs to you.
Professional description of financial leasing: The lessor purchases tangible movable property or real estate and leases it to the lessee according to the specifications, models, performance and other conditions required by the lessee. During the contract period, the ownership of the leased property belongs to the lessor and the lessee It only has the right to use it. After the rent is paid off at the end of the contract, the lessee has the right to purchase the leased property according to the residual value to take ownership of it.
Financial sale and leaseback: If you already own an item, but you are short of money and still want to use it, you can find a financial leasing company and sell the item to the financial leasing company (ownership transfer). You get a working capital. Then you pay rent and rent the right to use this thing. After the contract period expires, the ownership of the things will belong to you (the ownership will be returned to Zhao after the completion of the project).
To sum up: the financial leasing business belongs to the "lease service" within the "modern service industry". Because for financial leasing companies, they are leasing the assets they have purchased to you in kind, which is a traditional leasing service.
Financing sale and leaseback belongs to the "loan services" within the "financial services industry". Because for financial leasing companies, they are equivalent to mortgaging your physical assets and giving you a sum of money, and then you repay the principal and interest in installments to ensure the right to use your physical assets. It is a loan service.
A brief analysis of financial and tax issues related to financing sale and leaseback
Case
Q Company is a manufacturing enterprise. A large plastic steel machine was purchased in January 2013 , the price excluding tax is 9 million, the value-added tax is 1.53 million, the estimated useful life is 10 years, the residual value is not considered, and depreciation is calculated using the straight-line method. In January 2015, Company Q decided to sign a sale and leaseback agreement with financial leasing company K (approved and qualified).
The contract specifically stipulates:
Contract transaction price: 10 million.
Leasing period: January to December 2017, totaling 4 years.
Additional deposit terms: Company K received a deposit of 1 million, so Company Q actually received 9 million in January 2017. After all the rent is paid off, Company K will return the security deposit of 1 million.
Rent payment method: The annual interest rate is 12. Company Q pays rent plus interest in December every year, and *** pays 4 times (the deposit does not bear interest).
Analysis
1. Does Q Company recognize revenue and issue invoices on the rental date?
No value-added tax is levied. In fact, the equipment has not been transferred. Because depreciation is still accrued by the lessee, no invoicing is required and input VAT does not need to be transferred out. Corporate income tax also does not require recognition of income.
II. Accounting treatment:
1. Carry forward the cost of selling fixed assets
Debit: Fixed assets liquidation 7,200,000
Accumulated depreciation 1,800,000
Loan: fixed assets 9,000,000
2. Sale of steel molding machine to Company K
Borrow: bank deposit 9,000,000
Other receivables Loan 1,000,000
Loan: Fixed assets liquidation 7,200,000
Deferred income - unrealized after-sales and leaseback profits and losses 2,800,000
3. Confirm the unrealized profit to be apportioned this year Profit and loss from sale and leaseback
Debit: Deferred income - unrealized gain and loss from sale and leaseback 350,000
Credit: Manufacturing expenses - depreciation expense 350,000
4. The lower of the fair value of the leased asset and the present value of the minimum lease payment is the book value of the asset
If the rent is 15,000,000 yuan, including principal and interest, for 4 equal years, 12, and the annuity coefficient is 3.0373, calculate The present value of the minimum lease payment is 15 million yuan divided by 4 times 3.0373 = 11,389,875 yuan, which is greater than the fair value of 10,000,000 yuan, then
Borrow: fixed assets 10,000,000
Unrecognized financing expenses 5,000,000
Loan: Long-term payable 15,000,000
5. Pay rent and share unrealized sale and leaseback profits and losses
Borrow based on the actual interest rate method
: Long-term payables 3,750,000
Credit: Bank deposits 3,750,000
Debit: Financial expenses 1,850,000
Credit: Unconfirmed financing expenses 1,850,000
Related Extensions
The principal-repayment sales method is a sales method that sells the goods first and then pays the purchase price to the buyer in installments.
The Value-Added Tax Law stipulates that for sales by way of principal repayment, the sales volume is the sales price of the goods, and principal repayment expenses shall not be deducted from the sales volume.
There are no clear regulations on corporate income tax for principal repayment sales. When calculating income tax, although the income has been recognized, the principal repaid can be deducted before tax as the cost of sales.