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Top Lease

Operating lease from Top Lease

Definition of operating lease

An operating lease is commonly used to acquire equipment on a relatively short-term basis (12-60 months), but does not convey rights of ownership of the asset. This kind of service is preferred by the companies who would like to plan their expenses using fixed monthly amount.

Main advantages:

  • Tax benefits - decrease the company's capital;
  • Absence of additional maintenance costs;
  • No down payment and no financial guarantees. There are monthly contributions divided equally;
  • You can reduce the amount of your company's tax by monthly deduction of the lease payments from your taxable income;
  • It is provided full technical support, insurance and warranty of the car;

Terms of Operating Leasing from Top Lease

Here you can find full terms of operating lease from Top lease (in Bulgarian).

Operating lease vs Finance lease

Operating lease

Under an operating lease, the lessor (or owner) transfers only the right of using the property to the lessee. The lessee don't take risks of the property, the cost of leases are treated as operating expense in the statement of income and expenditure, and the lease does not affect the balance sheet.

Finance leasing

In a finance lease, the lessee takes a part of the risk of ownership and enjoys some of the benefits. Finance leasing is recognized both as an asset and as a liability (for lease payments) in the balance sheet.

From a tax standpoint, the lessor can claim tax relief on leased asset only if it is in the form of operating leases.