Leasing "tricks" in the spotlight: a blow to the ordinary business owner

The government has proposed changes intended to put an end to the practice of buying out a leased car, passing it to a family member and then selling it without tax. Gifting has until now been a commonly used form of tax optimisation. Now the Ministry of Finance wants to limit this manoeuvre - by extending the period after which a car can be sold without PIT, and by tightening the rules on taxing a sale made before that period expires.

What exactly will change?

• If a car bought out of a lease was used in the business and then passed by the business owner to close family (e.g. a spouse or child), the recipient can currently sell the car without tax if 6 months have passed since the gift. The government wants to extend this period to 3 years.
• A "family" sale made before this new period expires will result in an obligation to pay PIT.
• The tax-deductible cost limit for petrol and diesel cars and conventional hybrids is to be reduced - businesses will no longer be able to deduct such high amounts as before.

Why is this a problem?

• This is yet another change aimed at people who act honestly within the existing law - leasing plus a gift was legal, and now it will become a tax burden.
• For those who allowed themselves this kind of optimisation, costs will not merely rise - they could radically undermine the profitability of the whole operation.
• Instead of promoting simplification and trust in business owners, we are entering an era of "statutory traps", in which a car owner and business owner must reckon with unforeseen costs.

Our comment

Such government action has a name - fiscal paranoia. Assuming that every business owner who uses leasing and gifting is a trickster is like building a bridge while fearing that someone might drive over it too fast.

Global Tax Partners takes the view that tax law should be clear, predictable and fair - without retroactive changes, and without taking away options from those who acted legally.

👉 If you are planning to buy out a leased car and gift it within the family - let's talk now. We will check what options you have to limit the tax risk arising from the announced changes.