Sale and leaseback

Unlock cash by selling your asset and leasing it back

I am interested

Fast access to finance

You can immediately invest the capital into growing your business. You continue using the asset as a lessee and benefit from the tax advantages of leasing

Simple invoicing

Once the contract is signed, you issue an invoice for the purchase price excluding VAT, and we provide a payment schedule without requiring a tax document

Lower administrative burden

When the contract is duly ended, the selling price of the asset is not subject to VAT, reducing the administrative burden and potential costs

For VAT purposes, a sale and leaseback does not involve the future lessee supplying the asset to the leasing company and taking it back in the form of a finance lease. It is considered a single transaction where the leasing company provides the lessee with a financing service meeting the conditions set out in Section 54(1)(c) of the VAT Act.

What does this mean for the lessee in practice?

Once the leasing contract is signed, the lessee issues an invoice (tax document) to SGEF for the purchase price of the asset excluding VAT, as stated in the purchase agreement between the lessee and SGEF, with the rate “not subject to VAT”.
Interest and insurance (if arranged through SGEF) are VAT-exempt taxable supplies.

If the lessee provides taxable supplies themselves, they can claim the VAT deduction at the time of asset acquisition based on the tax document issued by the supplier.
After the leasing contract is activated, SGEF issues a payment schedule to the lessee. This schedule is not a tax document, but typically includes the due date and total instalment amounts payable. SGEF does not issue the lessee with a tax document for the instalments.

The lessee will receive an updated payment schedule and related contractual documentation from SGEF. SGEF does not issue the lessee with a tax document.

When the contract is duly ended, SGEF does not issue the lessee with a tax document, but only a confirmation of title transfer. The selling price is not subject to VAT.
If the contract is terminated early by agreement and the lessee buys the asset, SGEF will issue the lessee with an invoice (tax document) for the agreed amount. The selling price is not subject to VAT.
If the asset is sold to a third party upon early termination of the leasing contract, VAT must be accounted for because, at the time of the transaction, SGEF held ownership rights to the asset. If the lessee is liable to account for VAT, they issue a tax document to SGEF as at the contract termination date (i.e. the asset handover date) under the reverse charge mechanism. The tax base corresponds to the price at which SGEF sells the asset or uses it for another leasing transaction.