A Bank Guarantee is an alternative to providing a deposit or bond directly to a supplier or vendor. It is an unconditional undertaking given by the bank, on behalf of our customer, to pay the recipient of the guarantee the amount of the guarantee on written demand.
Bank Guarantees require security in the form of cash held on deposit with the bank, or real estate of a type and value acceptable to the bank.
The financier pays the full amount of the invoice. You cannot have any equity in a lease transaction (invoice is made out to the financier for delivery to your company), the quotation (repayments and residual value) are calculated on the total cost of the goods less the GST on the invoice up to the luxury car limit.Each repayment and the residual value attract GST and you would claim the GST per payment in your quarterly BAS statement.
The financiers lease document is their TAX INVOICE. Lease payments and residual value noted in the document are inclusive of GST. If you repay the agreement prior to the expiry date the payout figure is inclusive of GST and financier will forward a Tax Invoice for payout when finalizing the account. If the agreement is repaid in terms of original arrangements GST is noted as stated in their agreement.
For company tax purposes you would claim the lease payment exclusive of GST – but for luxury vehicles you should verify with your accountant.
For BAS purposes you would claim the GST portion of the installment.
