Lease agreement assignment - when is it needed?


Operating leasing is a popular form of using things in a company. However, entrepreneurs do not always need to use the leased asset throughout the duration of the contract. In such a situation, the optimal solution is the assignment of the leasing contract.

The leasing contract is not regulated by tax regulations, but by the provisions of the Civil Code.

In detail, the issues of the leasing contract, rights and obligations of the parties are regulated by the provisions of Art. 7091 and subsequent acts of the Civil Code. According to it, the provisions on leasing also apply to contracts by which one party undertakes to give the property that is its property for use or to use and receive benefits to the other party, and the other party undertakes to pay the owner of the property in the agreed installments a monetary remuneration equal to the least value of things at the time of concluding this contract.

Through the leasing contract, the financing party undertakes, within the scope of the activity of his enterprise, to purchase the item from the designated vendor under the conditions specified in this agreement and to return the item to the user to use or use and receive benefits for a specified period of time. The financing entity is commonly known as the lessor. He acquires the leased object and makes it available in return for a fee. The lessor may be a specialized company dealing only with this type of services, and often these are companies established by banks. In turn, the user (lessee) undertakes to pay the financing party in the agreed installments a cash remuneration, at least equal to the price or remuneration for the purchase of goods by the financing party. In return, it may use the leased asset.

Pursuant to the Civil Code, the leasing contract must be concluded in writing, otherwise null and void.

Art. 70912 § 1 of the Civil Code, which states that without the consent of the financing party, the user may not give things for use to a third party. The consent of the financing party may be expressed either in the leasing contract itself, or through a subsequent legal act, with the proviso that then it must be confirmed in writing. If the necessary consent is not expressed, the financing party may terminate the lease agreement with immediate effect, unless the parties have agreed a notice period.

Thus, in the leasing contract, you can change the user, with the consent of the financing party - the leasing company, by assigning the rights and obligations under the contract to another entity.

Operating lease

Pursuant to Art. 23a point 1 of the PIT Act, whenever the chapter refers to a leasing contract - it is understood as a contract named in the Act of 23 April 1964 Civil Code (Journal of Laws No. 16, item 93, as amended), and also any other agreement under which one of the parties, called "the financing party", gives the other party, referred to as the "user", for use or use and collection of benefits for consideration, under the conditions specified in the Act, as well as land.

The fees set out in the leasing contract, paid by the user in the basic period of the contract for the use of fixed assets and intangible assets constitute the financing party's income and, respectively, the cost of obtaining income for the user, if:

  • must be concluded for a definite period of time, representing at least 40% the normative depreciation period, if its subject are movable or intangible assets subject to depreciation, or it must be concluded for a period of at least 10 years, if its subject is real estate subject to depreciation, and

  • the leasing contract, if the user is a natural person who does not conduct business activity, was concluded for a specified period of time;

  • the sum of the fees established therein, reduced by the VAT due, must correspond at least to the initial value of fixed assets or intangible assets.

The provisions of the PIT Act do not directly regulate the tax consequences of changing the parties to the lease agreement. The regulations contained in art. 23a-23l of the PIT Act define only the tax consequences of disposing of the subject of the lease after the expiry of the basic contract period and the tax effects occurring during the term of the contract.

Thus, on the basis of the PIT Act, an assignment is allowed. Importantly, as a result of the assignment of an operating lease agreement, the taxpayer using the leased object does not have to adjust the costs for the expenses incurred so far during the term of the agreement. This position is confirmed by the tax authorities, an example of which is the letter from the Director of the Tax Chamber in Bydgoszcz, dated November 23, 2012, file ref. ITPB1 / 415-929b / 12 / PSZ, where we can read:

(…) In the absence of the exclusion of expenditure under Art. 23 above of the Act - the possibility of including it as tax deductible costs depends on proving by the taxpayer the existence of a causal relationship between the expenditure incurred and the income obtained, or the source of this income.

In art. 23 of the Personal Income Tax Act, the legislator does not mention costs corresponding to the value of already repaid lease installments, in the event that the user assigns the contract to a third party.

Bearing in mind the presented future event and the cited provisions of tax law, it should be stated that the assignment of the leasing contract to a third party will not result in the need to adjust the tax deductible costs in connection with incurring (until the rights and obligations under the leasing contract) expenses due to leasing installments (...).

Assignment of a leasing contract and VAT

The assignment of the leasing contract will also not result in the need for the outgoing user to make an adjustment to the input VAT. This position was fully confirmed by the Director of the Tax Chamber in Bydgoszcz in the interpretation of August 29, 2008, ITPP1 / 443-499 / 08 / MS, stating:

(...) it should be considered that in the case of the assignment of a car being the subject of an operating lease agreement, the Applicant, by taking over an operating lease agreement, has the right to deduct the input tax resulting from invoices for lease fees incurred only if the leased object will be used in the business activity to perform taxable activities. In connection with the above (provided that the conditions resulting from Article 86 are met, there are no restrictions resulting from Article 86 of the Value Added Tax Act) - the Applicant is entitled to deduct 60% of the input tax resulting from the invoice documenting the purchase of the car in question (no more than than PLN 6,000) (...).