FINANCIAL LEASE

Yaşar CANBAZOĞLU
Import Coordinator

Financial leasing is a medium and long-term investment loan used in the acquisition of investment goods such as factories and office buildings, manufacturing machinery, business and construction machinery, land, sea and air vehicles. The defining feature of this loan is that the legal ownership of the goods remains with the financial leasing company during the lease period, and all risks and benefits of the leased goods belong to the lessee.

The system works as follows: An investment property is selected by the tenant company and a preliminary agreement is made with this company. When applying to a financial leasing company, the necessary information and documents for evaluation are given to this company. After the financial leasing company carries out the necessary financial analysis, it makes a price offer to the investor company and, if deemed necessary, also requests collateral. When an agreement is reached between the parties, a financial leasing contract is signed between the financial leasing company and the investor company. At this stage, the financial leasing company pays the cost of the goods and the goods subject to financial leasing are delivered to the tenant. When the use is completed and the contract expires, the goods in question can be sold to the tenant for a certain price or given back to the financial leasing company.

The establishment and operating principles of financial leasing, factoring and financing companies operating as financial institutions and the procedures and principles regarding financial leasing, factoring and financing agreements are determined by the Financial Leasing Law No. 6361 published in the Official Gazette No. 28496 dated 13.12.2012.

According to the provisions of the "Regulation on the Establishment and Operation Principles of Financial Leasing, Factoring and Financing Companies" published in the Official Gazette dated 24.04.2013, financial leasing companies, factoring companies and financing companies to be established in Turkey are allowed to operate and these companies are allowed to open branches abroad. It is allowed by the Regulatory and Supervisory Board.

After the financial leasing contract, which is exempt from stamp duty and fees, is signed and the goods within the scope of the contract are delivered to the lessor, the lessee becomes the possessor of the goods subject to financial leasing for the duration of the contract. The tenant has the right to obtain all kinds of benefits from the mentioned goods in accordance with the purpose of the contract. However, the lessee must use the property subject to financial leasing carefully in accordance with the terms and conditions stipulated in the contract. Unless there is a provision to the contrary in the contract, the tenant is responsible for all maintenance and protection of the property and bears the maintenance and repair costs. It is mandatory to insure the rental property. The contract indicates who will insure the property, and insurance premiums are paid by the tenant. The lessor cannot be held responsible for the defectiveness of the goods provided from a third party upon the choice and request of the lessee; The fact that the goods are provided personally by the tenant does not change the situation.

According to the Financial Leasing Law, the lessor cannot transfer the ownership of the goods to a third party, unless otherwise provided in the contract. If this authority is granted in the contract, the transfer can only be made to another lessor. In this case, the transferee is also obliged to comply with the provisions of the contract. On the other hand, the validity of the transfer against the tenant depends on the tenant being informed.

In case of termination of the contract by the lessor, the lessee is obliged to return the goods. In case the returned goods are sold to third parties, unless a contrary value is agreed in the contract, if the sales price is lower than the sum of the undue financial leasing fees and the lessor's excess damage, if any, the difference is paid by the lessee to the lessor. On the other hand, unless a contrary value is agreed in the contract, if the sales price of the returned goods is higher than the sum of the undue financial leasing fees and the excess damage of the lessor, if any, the difference is paid to the lessee by the lessor. If the contract is terminated by the tenant, the tenant can return the goods and demand compensation for the damage suffered from the lessor.

Goods subject to financial leasing also benefit from Investment Incentive regulations. If all or part of the investments are realized through financial leasing, the lessor benefits from the incentives applied to the purchase of economic assets subject to financial leasing. In parallel, the financial leasing company's liability regarding the incentive certificate is limited to the part transferred to it.

How the customs procedures will be carried out regarding goods temporarily imported through financial leasing, as well as aircraft and ambulance helicopters arriving via the same route, has been clarified with the Circular No. 2014/1 of the General Directorate of Customs dated 02.01.2014. Accordingly, financial leasing agreements to be made abroad will be registered by the "Association of Financial Leasing, Factoring and Financing Companies" and sent to the relevant customs administration after being notified to the Ministry of Commerce. For the goods to be temporarily imported within the scope of Law No. 6361, a certified copy of the temporary import declaration by the relevant customs administration must be sent to the said Union following the completion of the process.

According to Circular No. 2014/1, following the registration of the financial leasing agreement for the aircraft to be temporarily imported by the said Union through financial leasing, the registration is notified by the Union to the relevant company, the Ministry of Commerce and the General Directorate of Civil Aviation of the Ministry of Transport and Infrastructure.

In order to avoid any delay, the relevant Union's addressee letter to the relevant company, the technical conformity letter from the General Directorate of Civil Aviation of the Ministry of Transport and Infrastructure, the proforma invoice and the financial leasing agreement must be submitted to the relevant customs office, limited only to aircraft that will be temporarily imported through financial leasing. If approved, temporary import procedures for aircraft will be carried out. The contract and cover letter will be sent directly to the relevant customs administration by the Union, and the customs administration will compare the documents in question with the documents related to the transaction.

On the other hand, if financial leasing contracts are amended or term extension options in the first contract are used, the said amendment contracts and documents proving that the term extension option is used will be deposited by the companies to the relevant Association. Amendments included in the file by the Union will be notified to the relevant customs administration and the relevant company. If the addressee letter to the company stating that the amendment contract has been included in the file and the amendment contract are submitted to the relevant customs administration within the duration of the aircraft's stay in the country, the duration of the aircraft's stay under the temporary import regime will be extended in accordance with the provisions of the contract and recorded in the "Regime End Date" field in the BİLGE System.

In the circular, if documents regarding the extension of time are submitted after the expiry of the stay in the country of the aircraft temporarily imported through financial leasing, action will be taken in accordance with the clauses (1) of the 3rd paragraph and (g) of the 4th paragraph of Article 241 of the Customs Law No. 4458, according to the exceeded period. to be done; It has been reported that if there is no application to the customs administration within two months from the end of the aircraft's stay in the country, the aircraft in question must be subjected to a customs-approved procedure or use by applying Article 238 of the Customs Law.

Financial leasing regulations have closed an important gap in overcoming the financing difficulties of businesses operating in our country and have enabled them to continue their activities without interruption through financial leasing methods. It is understood that all sectors, including the aviation sector, will benefit from the financial leasing instrument for many years to come.

SOURCE

Financial Leasing Law No. 6361

“Regulation on the Establishment and Operation Principles of Financial Leasing, Factoring and Financing Companies (Official Gazette dated 24.04.2013 No. 28627)

Circular No. 2014/1 of the General Directorate of Customs dated 02.01.2014

PC Corpus

E-academy

QUESTIONS AND ANSWERS

Question 1. Why should I buy a machine with financial leasing?

Answer: The Financial Leasing Law provides 100% financial convenience for investments; With the opportunities provided by leasing, companies can finance the entire investment amount, in other words, 100%.

Question 2. What are the tax advantages of leasing and financial leasing to a business?

Answer: VAT decreases to 1% and 8% on some investment goods rented under leasing. With this method, tenant businesses have the opportunity to pay low-rate VAT. In addition, goods subject to financial leasing also benefit from the tax advantages provided by the Investment Incentive Certificate.

Question 3. Which goods can be the subject of a financial leasing agreement?

Answer: Medical devices, data processing units, computers, power plants and communication devices, energy facilities, land transportation vehicles, air transportation vehicles, dry cargo ships, tankers and other marine vessels, construction machines, cranes, work machines, printing machines, all kinds of machines. Movable and immovable properties such as production machinery, textile machinery, complete factories, hospitals, hotels and office equipment can be subject to financial leasing agreements. However, intellectual and industrial rights such as patents cannot be subject to this financial leasing agreement.

Question 4. How are customs procedures carried out regarding goods temporarily imported through financial leasing, as well as aircraft and ambulance helicopters arriving via the same route?

Answer: The financial leasing agreement for aircraft and ambulance helicopters temporarily imported through financial leasing is registered by the "Association of Financial Leasing, Factoring and Financing Companies" and this transaction is submitted to the relevant company, the Ministry of Commerce and the Ministry of Transport and Infrastructure, General Directorate of Civil Aviation. It is reported to; Temporary import procedures for aircraft are carried out if the addressee letter of the Union to the relevant company, the technical conformity letter of the General Directorate of Civil Aviation of the Ministry of Transport and Infrastructure, the proforma invoice and the financial leasing agreement are submitted to the relevant customs administration.

Question 5. Can the tenant purchase the rented property using the financial leasing method?

Answer: At the end of the financial leasing contract period, the leased property can be purchased by the lessee from the financial leasing company for a low price.