LEASING MARKET IN RUSSIAN FEDERATION: PROBLEMS AND DEVELOPMENT PROSPECTS

РЫНОК ЛИЗИНГА В РОССИЙСКОЙ ФЕДЕРАЦИИ: ПРОБЛЕМЫ И ПЕРСПЕКТИВЫ РАЗВИТИЯ

Мякинко Марк Викторович

магистрант, кафедра финансов и финансовых институтов, Байкальский государственный университет,

РФ, г. Иркутск

Abstract. This article discusses the current state of the leasing market in the Russian Federation. The concept of leasing is clarified, the current state of the leasing market of the Russian Federation is shown. The advantages and problems of leasing in the existing market conditions and legislation of the Russian Federation are revealed. A set of measures to change the legislation for the development of the leasing market is proposed.

Аннотация. В данной статье рассматривается текущее состояние рынка лизинга в Российской Федерации. Уточнено понятие лизинга, показано современное состояние рынка лизинга Российской Федерации. Выявлены преимущества и проблемы лизинга в существующих условиях рынка и законодательства Российской Федерации. Предлагается комплекс мер по изменению законодательства для развития рынка лизинга.

Keywords: leasing, leasing operations, regulation of leasing, leasing in Russia.

Ключевые слова: лизинг, лизинговые операции, регулирование лизинга, лизинг в России.

Introduction. Nowadays leasing operations become more and more popular, companies, even small ones, want to buy more fixed assets for successful development. Often companies don't have enough capital to buy a car or another type of fixed asset in one moment. At this moment they become to decision: what shall they do? Take credit or leasing? Actually, not all businessmen know about leasing probably because of low economic education. In current article we will tell about leasing regulation and how it can be changed to be more attractive to lessees. Currently, leasing operations are widely used in the economic practice of enterprises

The legal basis of leasing is enshrined in the Federal Law of 29.10.1998 N 164-FZ "On Financial Lease (Leasing)". Already from the very name one can see the duality of leasing relations: on the one hand, leasing is a lease, on the other - a loan, and more likely a commodity than a bank.

Leasing can be taken almost any thing, including factories, factories and similar property complexes, buildings, buildings, equipment, cars and other movable and immovable property.

In addition to entering into a lease agreement, a sales contract is also concluded. You may also enter into agreements on the attraction of funds, a pledge agreement, a guarantee, a surety, etc.

Although leasing means a rental relationship, all risks associated with the use of the leased asset are transferred to the lessee.

The property that is acquired under a lease agreement, depending on the terms of the agreement, is listed on the balance sheet of the lessor or the lessee. If the property is recorded on the balance sheet of the lessor, then payables are not formed in the accounting records of the lessee. For an enterprise, this is a favorable moment, since leasing does not impair financial sustainability, and therefore does not reduce the possibility of attracting additional loans and borrowings.

The main misconceptions associated with the tax component of leasing. Some people think that the tax benefits of leasing are overvalued and it was not by chance. From the moment leasing appeared in our country, the state provided tax preferences to leasing. The benefits were so significant that the parties were not interested in leasing as such, but in tax savings associated with it. As a result, financial leases have become actively used as a tool for tax optimization. As a result, the state began to narrow the tax concessions on leasing, and at the moment they have been reduced only to the mechanism of accelerated depreciation of leasing objects.

Body.For understanding the whole scheme of leasing transaction we need to learn scheme-instruction below:

Scheme 1. Business-process of leasing contract

Looking at this scheme, you can understand the whole process of a leasing transaction.

1. The company-lessee is looking for a suitable leasing object, which he needs.

2. The lessee applies to the leasing company with a proposal to enter into a leasing agreement for a specific product. It is possible that the leasing company will offer a more profitable subject of leasing, since often manufacturing companies offer discounts to leasing companies, as a result of which leasing costs the lessee less. Also do not forget about government subsidies for the initial payment, which also help to reduce the cost of leasing.

3. If the leasing company does not have enough personal funds to acquire the subject of future leasing into the property, then it can apply to the bank. The Bank and the Leasing Company enter into a loan agreement for the provision of cash in the form of a loan.

4. When the lessee initiates a leasing transaction and signs a lease agreement, the leasing company contacts the seller of this equipment and enters into a purchase and sale agreement with it.

5. Thereafter, the Leasing Company transfers the property on lease to the lessee, who pays the lease payments.

6. The lessee or the lessor shall enter into an agreement with the insurance company on the insurance of the leased asset.

7. In the event that the lessee is unable to pay leasing payments, he may transfer the leased asset to sublease. In this case, the parties agree that the sublease recipient will make payments to the original lessor.

8. After all payments by the lessee are paid, he can pay the redemption payment and transfer the leased asset to his balance sheet. If the parties agreed on renewable leasing, then the leased asset will be replaced in accordance with the contract.

Now we understand the whole business and can learn the main problems.

One of the main problems that leasing companies in Russia are facing now is the failure of the procedures of the pre-trial return of the lessor’s property in the event of non-payment by the lessee. Until the expiration of the leasing transaction, the leased asset is legally owned by the leasing company. However, the Civil Code of the Russian Federation and other regulatory acts do not provide for the possibility of pre-trial seizure of own property from an unscrupulous lessee. The leasing company can return its property only in a judicial order.

The disadvantage of the existing legislation in the field of leasing is also considered the impossibility of re-delivery of the object in the lease. The Russian legislation does not provide a system for re-leasing of property. The fact is that the tax authorities recognize a leasing transaction, which means that the leasing company will receive all the benefits due to it (the possibility of including leasing payments in expenses, accelerated depreciation of the leased object, and, as a result, a reduction in property tax) she buys the object under the order of a specific customer. In the event of a contract break, she only has to buy it again and then hand it over, or sell it to someone.

Another complication that hinders the development of leasing in Russia is problems with the return of value added tax (VAT). In order to lease an object, a company must first buy it and pay VAT to the state. Returning VAT from the budget is a big problem. This leads to a shortage of free cash and the suspension of other company projects. Another problem point is the following: in accordance with Article 655 of the Civil Code of the Russian Federation, the lessee has the right to independently choose the leased object and inform the lessor about it or leave the choice of leased property at the discretion of the lessor. [1, с. 665] In practice, the question arises: how can a lessee use his right to choose if the realization of this right by one or another legal entity entails various legal consequences. With regard to development prospects, in the first nine months of 2016, the leasing market is experiencing a positive trend, which has led to improved business expectations of market participants. The share of companies with a rapid increase in new deals has noticeably increased, and such companies are waiting for a 5-10 % market growth. The absence of large segments of property that could be a driver of development speaks in favor of maintaining negative dynamics in the market. At the same time, the expectations of growth in transactions are also justified: first, the “base effect” starts to work - the market slumped strongly in two years, and its further decline becomes unlikely, a certain minimum amount of investment in fixed assets will still be maintained; secondly, the volume of transactions pushes up the exchange rate (imported equipment is more expensive than before) and annual inflation. Thirdly, the leasing market is very sensitive to investments, and just as it is rapidly shrinking during a crisis, it is as fast and recovering as soon as economic actors adapt to new business conditions. There is a gradual increase in competition and the willingness of banks to lend to the business. According to the Bank of Russia, in March 2016, there were signs of excessive liquidity in the banking system - on the one hand, banks began to place more funds on accounts with the Bank of Russia, on the other hand, they pay off their previously accepted liabilities. The growth of banks' lending activity also affects the expansion of funding for the leasing market, as one of the clear and secure products (borrowers). During 2014-2016, the market is significantly transformed under the influence of the adjustment of wagon rental rates and prices for new rolling stock, as well as due to the bankruptcies of air carriers and tour operators, and the closure of a number of popular tourist routes. Consequences are expressed in the compression of railway equipment and aircraft segments, and as a result - an increase in the share of segments focused on SMEs, primarily motor vehicles. As a result of such changes, the share of large businesses in transactions declined last year, and this trend will continue in 2016 - the expected contraction of aviation sales will not be able to support the segment of large businesses, while the recovery of the railway segment is expected to be smaller in scale than aircraft drawdowns. In 2016, segments in which there are state support programs — agriculture, automotive, defense industry enterprises and their contractors — became less risky and more rapidly growing. The autosegment, in addition to the subsidy program, will support public procurement in the field of urban transport, infrastructure projects; among other segments, it can demonstrate the highest growth rates. In the structure of the autosegment, the share of domestically assembled cars will continue to grow, market participants in trucks point out the likelihood of demand overflow in favor of less lifting machines as a result of the introduction of the Plato system.

In 2016, mass joint offers by lessors and suppliers / dealers also supported the autosegment, however, leasing companies did not expect to expand their number in 2017, focusing on the work under the state subsidy program. A number of companies, however, believe that the truck segment is in the high risk zone due to the economic situation in the country. In addition to transport, chances of growth in the future have segments of property for oil production, gold mining, the chemical industry and other export-related industries - the depreciation of the ruble allows exporting companies to increase investment. Segments with weak prospects, in which growth is not expected, lessors consider construction equipment and partly freight vehicles. Experts note that the quality of leasing portfolios on the market deteriorated in 2015, but is currently stabilizing. Most of the lessors believe that the main problem transactions have already appeared, and the level of overdue debt in 2017 will not increase significantly, although the problematic part of the portfolio will remain. In one way or another, all market participants have taken appropriate measures to settle arrears. Many lessors in case of problems with clients prefer to go on restructuring transactions, and not to withdraw and sell the property.

One more point that we should learn is how tax works.

In determining the income tax base, the lessee company relates leasing payments to expense. In the case when the lessee puts the object of leasing on its balance sheet, then the company deducts the amount of accumulated depreciation from the amount of the lease payments that are expensed. When the lessee takes depreciation into account as his expenses, he already considers the leasing payments as his expenses. That is why, when calculating income tax, the remaining part of payments on a leasing contract should be attributed to other expenses (minus the amount of accrued depreciation.

The exceptions are companies that use the cash method of tax accounting. They do not need to adjust the amount of lease payments for accrued depreciation. This is due to the fact that when using the cash method, the company can only depreciate the paid property received in the property. [2, с. 273] It is also worth noting that the depreciation charge is made by the leasing party on whose balance sheet the property is listed. [3, с. 98] And since the object of leasing can become the property of the lessee only in the case when it is foreseen to repurchase it, it is impossible to depreciate the leased asset until its repurchase. Therefore, regardless of whose balance sheet the leased asset is, with the cash method, all leasing payments are included in other expenses as they are paid. [2, с. 264]

There are situations when the lessee needs to take into account expenses when calculating the income tax, but the amount of depreciation charges is greater than the lease payment. In this case, it is necessary to include in the expenses only the amount of accrued depreciation, not exceeding the size of the lease payment.

If the object of leasing is received on the balance, then it is necessary to accrue depreciation [2, с. 258]. In the case of the lessee refers leasing payments to expenses, and reduces them to the amount of accrued depreciation. [2, с. 264]

The tax accounting procedure stipulated by the code reflects the requirements of the law, according to which the lease payments should include not only the value of the property, but also the income of the lessor. That is why the total amount of leasing payments cannot be less than the initial value of the property that the lessee needs to cover. In the case when depreciation is zero, the expenses must take into account the lease payments in full. This approach is set out in the letter of the Ministry of Finance of Russia dated March 29, 2006 № 03-03-04 / 1/305.

In addition, taxable income cannot be reduced by an amount that exceeds the price of the lease agreement. It is also impossible to take into account the same expenses repeatedly for various reasons (clause 5, article 252 of the Tax Code of the Russian Federation).

From this it follows that the legislation does not provide for the conditions when it would be possible to include in the expenses the amount of accrued depreciation in amounts larger than the leasing payments.

With regard to the use of the method of accelerated depreciation of fixed assets, it can be used to reduce the taxable base for income tax at the expense of a larger amount of depreciation of the leased asset. This effect can be used with a leasing agreement. At the same time, when assessing the income tax savings, it is necessary to take into account that the initial value of the property, both when leasing and when buying fixed assets, remains directly equal. The amount attributed to costs using the depreciation of fixed assets will also be equal both in case of accelerated depreciation and in the case of the usual scheme for calculating depreciation deductions. The only difference is that when using the accelerated depreciation method this will happen faster. But at the end of the leasing transaction, if the leased property is fully written off, its depreciation will not be included in expenses, and with the usual depreciation, fixed assets will be depreciated and reduce the tax base for tax profit.

In the case when the company applies the method of accelerated depreciation, it needs to control the total amount of expenses and the financial performance of the organization. Large amounts of accelerated depreciation accrued on the leased asset increase costs and can lead to losses during accelerated depreciation periods (especially in cases of acquisition of expensive equipment for leasing), which can be considered as a disadvantage of using this mechanism.

As for property tax, movable property that is acquired under a leasing agreement, no matter which balance it consists of - the lessee or the lessor, is not recognized as a taxable object from January 1, 2013. This is evidenced by clause 38 of the instruction, approved by order of the Ministry of Finance of the Russian Federation of December 1, 2010 No. 157n, tangible objects of property in operation, stock, leased, leased (subleased). For objects of leasing the same rules are prescribed as for movable property. The object of leasing, which is considered movable property and registration by a lessee or a lessor from January 1, 2013 or later is not considered a subject to property taxation.

It is also possible to get a refund of value added tax. When an object of leasing is listed on the balance sheet with the lessee under the terms of the contract, the amount of VAT that is payable under the contract to the lessor will be reflected when the object is received by the organization on the debit of account 19 "Value Added Tax on Acquired Values" and loan account 76. the company can take to the deduction when it receives invoices from the lessor.

The lessee, having transferred the advance payment to the lessor, has the right to accept VAT deduction from the amount of the advance payment. This tax deduction is made only if there is an invoice, which the lessor issues when receiving an advance payment, a payment document that confirms the transfer of the advance payment, and a leasing agreement that provides for an advance payment transfer.

When the lease payments will be charged, the corresponding amount of VAT to be deducted from the prepayment is subject to recovery.

Having dealt with situations where the lessee and the lessor are residents of the same state, you should pay attention to international leasing. With international import leasing, according to Art. 310 of the Tax Code of the Russian Federation, the obligation to calculate and pay income tax lies on the person who pays income to the non-resident lessor, i.e. on the lessee. Tax is paid upon the payment of each lease payment in the currency in which the income was paid to the lessor.

In case of export international leasing, the income of the company to the lessor - a resident from the transfer of the object to the lessee - to a non-resident is subject to income tax in the manner provided for in Chapter 25 of the Tax Code of the Russian Federation. In addition, the amount of tax that was paid in accordance with the laws of foreign countries to the Russian lessor is credited to him when the tax is paid in the Russian Federation.

The amount of credited taxes paid outside the Russian Federation cannot exceed the amount of tax payable by the lessor outside the Russian Federation.

Table 1.

Ranking of leasing companies, 2018-2019

Analyzing the table, we can conclude that the largest Russian leasing companies are subsidiaries of major banking companies, such as the State Transport Leasing Company, Sberbank of Russia, VTB-Leasing or other large organizations, such as Europlan, and also in the top -5 companies include 4 companies with state participation, which suggests that companies need really large investments or interest-free loans from banks to get into the top leasing companies, even on still developing Russian leasing market.

An important direction in the development of leasing should be the formation of regional leasing companies. Their founders can be, first of all, regional commercial banks. However, an important place in this can take and regional governments, including participating as co-founders and contributing a certain part of the regional budget. This option is especially relevant if the subject of leasing is the implementation of regional infrastructure projects, the development of housing and communal services, the solution of certain social problems.

Speaking about the prospects for the near and long-term, then you can see that in 2019 the leasing market, according to the forecast, will continue to grow and has every chance to exceed 1,100 billion rubles, since from 2018 the reform of financial leasing provides for the further development of leasing which began at the end of 2017, but the main part of the reform was implemented in 2018 and is aimed at improving the quality of the operating environment of the leasing market. Highlights of this reform:

1. The main challenge for Russian leasing companies will be the introduction of regulatory oversight [4]. The main direction of this part of the reform will be associated with the introduction of requirements to control the risks of leasing enterprises.

2. As part of the planned reform, they plan to reduce the legal and credit risks of lessors. It is also planned to introduce self-regulating organizations, create a state register of leasing companies, and improve the regulatory framework.

3. It is planned that from 2020 standards will be introduced for the largest leasing companies in the Russian market.

4. The changes that are currently being prepared for this reform should divide the leasing organizations into 2 camps, depending on their scale of activity with the establishment of differentiation in terms of their own funds. It is planned that for companies whose value of assets exceeds 500 million rubles, the minimum amount of capital will be set at 70 million. And for companies whose cost of capital is below 500 million rubles, the minimum amount of capital will be 20 million rubles.

This reform of the leasing industry will significantly support the volume of new business, as well as make the leasing industry one of the drivers of economic growth.

It is predicted that the volume of new business in 2017 will grow by 15 %. Also, according to the forecast, the railway leasing segment will show growth, it will increase by 10 %. Such growth is associated with the achievement of the gondola balance, as well as major transactions for the purchase of cars for the needs of state-owned companies. Paying attention to the air leasing market, one can say that there is a place to say that it will also show growth within 10 %, due to state support for leasing Russian aircraft.

It is also planned to restart the program of state support for car leasing. Drawing attention to the unpopular side of leasing, namely the leasing of construction equipment, we can say that as part of preparing the cities for the World Cup, which was held in 2018, a number of large contracts for the supply of large construction equipment were concluded, which also increased the amount of leasing contracts.

Conclusion. As we saw in current article, leasing has a lot of problematic places, which are known by lawmakers. Principally, as we learn, problems are connected with tax law. Nowadays lawmakers start to pay attention to the leasing sphere much more than in previous. It says us that government understand the possibilities of leasing market because they how leasing market develops in west countries and how much money it bring to country. Not only directly. If government support business, then more businesses become successful and able to pay taxes. But still, we don't get development in satisfied growth rate.

Table of ranking of leasing companies gave us an opportunity to understand current situation on leasing market in numbers. As we understood the main players on leasing market in Russia are companies with state participation. That's one more approval that government is interested in leasing.

Suppose that leasing in Russia will go in his own way like many things in Russia: with government support and with not big amount of big lessors.

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