A leased car may be a commercial commodity

When concluding an operating lease agreement, the entrepreneur pays the initial payment (initial rent) to the lessor's account. Then, every settlement period, usually monthly, the lessee receives invoices for leasing installments, which he is obliged to pay. When the leasing contract comes to an end, the taxpayer has the right to buy the leased asset at a bargain price. As a rule, entrepreneurs classify them as fixed assets and depreciate them. But can they be used for resale? We explain below.

What assets are the company's fixed assets?

Assets owned by the entrepreneur may constitute the company's fixed asset, as long as they are owned or jointly owned by the taxpayer. Additionally, on the day they are accepted for use, they must be complete and fit for use. Importantly, the expected period of their use must be longer than one year and they should be used only for business purposes or intended for rental, leasing or tenancy.

A tangible asset meeting the above requirements should be entered into the register of fixed assets, valued (its initial value determined) and depreciated. The taxpayer should also prepare a document confirming the acceptance of the fixed asset for use, the so-called OT.

Important! The exception are items with a value below PLN 3,500, because they are treated as low-value assets. In their case, the entrepreneur may qualify them directly as company costs without the need to enter fixed assets into the register. It should be mentioned that it is not prohibited - the taxpayer may enter them into the register and subject them to e.g. one-off depreciation.

A car taken out of lease as a commercial commodity

In a situation where the entrepreneur, after buying the car from leasing, wants to allocate it for further resale, he has the right to do so. The car will be able to be a commercial commodity in the taxpayer's activity, as long as it does not meet the definition of a fixed asset provided in the first point.

So if the car is not used for the purposes of the entrepreneur's activity and the taxpayer intended it for sale, then its redemption from leasing is included in the col. 10 KPiR - purchase of commercial goods and basic materials. Importantly, the VAT on this invoice will be fully deductible.

The same procedure applies to other leased items, such as machines or devices.