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What are the benefits of Cross Border Lease?

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 ROSHNI asked about 3 years ago

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3 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 CA Sandeep Bohra answered almost 3 years ago

>Benefits of Cross Border Lease --Cross-border leasing is a leasing arrangement where lessor and lessee are situated in different countries because the lease transaction takes place between parties of two or more countries, it is called cross-border lease. --The basic prerequisites are relatively high tax rates in the lessor’s country, liberal depreciation rules and either very flexible or very formalistic rules governing tax ownership. --Cross-border leasing has been widely used in some European countries, to arbitrage the difference in the tax laws of different jurisdictions, usually between a European country and the United States. Typically, this rests on the fact that, for tax purposes, some jurisdictions assign ownership and the attendant depreciation allowances to the entity that has legal title to an asset, while others (like the U.S.) assign it to the entity that has the most indicia of tax ownership (legal title being only one of several factors taken into account). In these cases, with sufficiently long leases (often 99 years), an asset can end up with two effective owners, one in each jurisdiction; this is often referred to as a double-dip lease. **Benefits of Cross Border Lease are as follows :--** --The advantages of cross-border leasing include the tax benefits available in some countries. --It can also serve as a mechanism for selling equipment manufactured in the lessor's country. --There is significant risk, however: different judicial systems, the risk of double taxation, wrong estimation of credit risk, political risk, or currency risk, etc. --A characteristic example of such transactions is shipping financing. --Hypo Leasing Austria actually owns a separate affiliate that deals only in financing vessels, and its clients are individuals and companies from across the region.

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Data?1494421730 rohit awasthi answered about 3 years ago

Hii Roshni > Benefits of Cross Border Lease Cross Border Leasing In case of cross-border or international lease, the lessor and the lessee are situated in two different countries. Because the lease transaction takes place between parties of two or more countries, it is called cross-border lease. The basic prerequisites are relatively high tax rates in the lessor’s country, liberal depreciation rules and either very flexible or very formalistic rules governing tax ownership. Benefits Of Cross Border Leasing : Cross border lease benefits are more or less the same as are available in domestic lease viz. 100% funding off-balance sheets financing,the usual tax benefits on leasing, etc. In addition to these benefits, the following are the more crucial aspects which are required to be looked into: (i) appropriate currency requirements can be met easily to match the specific cash flow needs of the lessee; (ii) Funding for long period and at fixed rate which may not be available in the lessee home market may be obtained internationally; (iii) Maximum tax benefits in one or more regions could be gained by structuring the lease in a convenient fashion; (iv) Tax benefits can be shared by the lessee or lessor accordingly by pricing the lease in the most beneficial way to the parties; (v) Choice of assets for cross border lease is different than domestic lease because those assets may find here attractive bargain which are internationally mobile , have adequate residual value and enjoy undisputed title. Thanks

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Picsjoin 2017224123730582 Archana answered about 3 years ago

Hie Roshni, **Benefits of Cross Border Lease are as follows :--** -The advantages of cross-border leasing include the tax benefits available in some countries. - It can also serve as a mechanism for selling equipment manufactured in the lessor's country. - There is significant risk, however: different judicial systems, the risk of double taxation, wrong estimation of credit risk, political risk, or currency risk, etc. - A characteristic example of such transactions is shipping financing. - Hypo Leasing Austria actually owns a separate affiliate that deals only in financing vessels, and its clients are individuals and companies from across the region.

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