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Development of Leasing in Turkey

The development of leasing in Turkey commenced in 1985 with the enactment of special leasing laws, initially allowing only financial leasing. Key advantages included VAT subsidies for lessors and tax depreciation benefits. Over time, regulations evolved, with significant changes in 2003 and 2007 regarding tax incentives. By 2013, operational leasing and related processes gained acceptance. The leasing sector saw fluctuating penetration rates, heavily impacted by VAT and market dynamics, with banks dominating the industry. Effective risk management strategies are essential for navigating credit, operational, and financial risks.

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Development of Leasing in Turkey

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  1. Development of Leasing in Turkey Started at 1985 with the special Leasing Law Only financial leasing was allowed and licensed Advantages: VAT subsidies for lessor reflected to lessee and tax depreciation for lessor In 2003 tax depreciation disappeared. In 2007 VAT subsidies was disappeared In 2011 VAT subsidies reestablished for machinery investments and construction machines. In 2013 operational leasing ,sale and lease back and sublease was allowed

  2. Leasing Volume(Bio usd)

  3. Development of Leasing • In 1988 the penetration rate of leasing was %0,8 increased to %8 in 2007 and decreased to %4 when VAT subsidies was disappeared. • Leasing become much more expensive than credit financing because of %18 VAT was applied to lease purchases and lease rentals. • The market is dominated by bank owned leasing companies(%95) and 28 leasing companies are active in the market.

  4. Development of Leasing

  5. Risk Managment in Leasing • Credit risk company evaluation asset value • Operational risk legal process purchase process service process • Financial risk fx risk interest rate risk price risk

  6. Risk Managment in Leasing • Credit risk financial analysis monitoring and controlling credit risk credit buraue data and market information down payments and first and second hand market valuesof leased assets. • Operational risk contract management and legal procedures and repossesion purchase process of import and domestic purchases special fleet and equipment management companies

  7. Risk Managment in Leasing • Financial risk natural hedge of fx risk forward contracts natural hedge of interest rate risk swap contracts for interest rate risk

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