Instalment Credit Agreement Sars

A lease agreement is generally considered either as a financing lease or as an operational lease-sale agreement for the purposes of applying IFRS to SMEs. As far as leases are concerned, attention should be paid to the effects of VAT.) It is not permissible to assume that, since a lease has been classified as a lease for accounting purposes, it is also a financing lease (as defined in point b) of the definition of the VAT Act`s term credit contract) for VAT purposes. The aim of this article is to compare the accounting considerations for the classifications of a financial lease (as published in a previous article (accounting for ifrs leases for SMEs – Part 1: The basics) with the legal requirements of a temperamental credit contract (paragraph b)) of the VAT act. While, in the example above, the lease was considered a lease for accounting and vat purposes, it cannot always be accepted for all leases. As noted in the tables above, the indicators for the classification of a financing lease for accounting purposes differ significantly from the requirements of a financing lease (as defined in point (b) from the definition of the VAT Act`s term credit contract) for VAT purposes. The transaction is therefore considered a financing lease in the form of point b) of the definition of the installment credit contract of the VAT act. Accounting indicators are compared to the requirements of a temperamental credit contract under the VAT Act (particularly point b) of the definition of an installment credit contract (i.e. a term credit contract) in Table below: The table below takes into account the information provided in example 1 for the classification of an installment credit contract in the form of a lease in the form of a lease VAT purposes. Accounting indicators for temperamental credit contracts .

. The above comparison shows that when the lease was concluded, as in the following example of a lease, as used in the first article, it is the fourth article in a series of five articles dealing with ifrs leases for SMEs, as well as the treatment of VAT and income tax.