ACCOUNTING AND TAXATION OF LEASING CONTRACTS

TAXATION OF LEASING CONTRACTS

Sxomple

In 202N, the entity incurred the following expenses related to the maintenance, servicing and repair of fixed assets, reflected in the balance sheet: maintenance and technical service of the Mercedes car – 6 280 lei; capital repair of the administrative building – 947 000 lei.

The renovation works were completed on May 16, 202N and, as a result, it was established that the duration of use of the building increased by 7 years.

According to the data, for example, expenses related to the maintenance and upkeep of cars, as well as current repairs of fixed assets, carried out for the purpose of entrepreneurial activity are deductible for tax purposes.

As for the expenses for the capital repair of administrative buildings, the procedure for deducting them is carried out by calculating the depreciation, starting with the following month after the completion of the repair works.

According to the example, the capitalized amount of 947,000 lei from June 202N will increase the depreciable value of the building.

When filling in the Register of depreciation of fixed assets for tax purposes (Annex 1 to GD no. 704/2019), the operations related to the capitalization of costs are reflected in columns 13-22 of section II “After the repair/development has been carried out”.