What is Rent-A-Car Accounting?
Like every taxpayer, rent-a-car companies have responsibilities determined by tax procedures and laws. In rent-a-car accounting, various sector-specific regulations, as well as standard applications, are taken into consideration. The size of the operation that each accounting department must manage varies according to the number of vehicles and the customer portfolio. Therefore, updated and changing legal regulations should be considered during accounting management, and the established standards should be accurately reflected in the process.
Are All Vehicles Subject to VAT Deduction?
A common misconception is that rent-a-car companies benefit from VAT deductions for any vehicle registered in their assets. However, according to Article 30/b of the VAT Law, VAT deduction rights do not apply to vehicles purchased for non-commercial purposes. During rent-a-car accounting, VAT discounts can only be used for vehicles purchased for commercial purposes.
What Are the Payment Type Limitations for Rent-A-Car Companies?
Another important issue in rent-a-car accounting management is payment types. Regulations for public security and intelligence purposes, effective from 01.07.2017, require that lease payments be made through financial institutions without any amount limitation, effectively prohibiting cash payments. The Antalya Tax Office regulation dated 10.08.2017 and numbered 77058783-105 [VUK.ÖZ.17.28] - 117763 specifies that collections for leasing transactions must be deposited to the bank on behalf of the customer. Failure to adhere to this regulation results in penalties under the Tax Procedure Law No. 213, specifically Article 355. Although this presents a challenge for rent-a-car companies, no concrete steps have been taken to amend the regulation.
What Are the Regulations Coming in 2020?
The Law No. 7194, published in the Official Gazette No. 30971 on 07.12.2019, imposes various restrictions on passenger vehicle expenses in the taxation of commercial and self-employment earnings. As a result, accounting records for companies that rent from rent-a-car companies have become somewhat more complex. According to this regulation, the maximum deductible amount for car rental expenses is 5,500 TL per month. Expenses exceeding this limit are considered as non-deductible (KKEG). For example, if a company pays a monthly rental fee of 10,000 TL, only 5,500 TL can be shown as an expense.
Additionally, the same law stipulates that 70% of fuel expenses for passenger cars (whether leased or owned) can be considered deductible. For instance, if 500 TL is spent on fuel, only 350 TL can be shown as an expense.
What Tools Can Be Used for Rent-A-Car Accounting?
Rent-a-car companies can acquire software that manages their activities and supports legal responsibilities such as accounting. Titarus is a software solution that manages fleet management, portfolio management, and customer relations. Titarus provides extensive support for rent-a-car accounting by offering various services. With its software, which updates in accordance with ever-changing legal regulations, you will encounter no difficulties in rent-a-car accounting. Thanks to cloud technology, you can monitor your accounting processes in real time, organize your records, and generate reports even when you are out of the office.
