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What Is Sale-And-Leaseback?

It is a financial transaction in which companies sell the properties within their assets and lease it back.


Companies with operational capital deficit may liquidate their balance sheets by collecting the sales price in advance from the leasing company and channel the raised funds to their business.

Paybacks to the leasing company will be in the form of extended lease payments.
For real estate transactions, the title deed fee to be charged during the purchase of the property by the leasing company is 4.55 per mil. (For real estate transactions without a sale-leaseback arrangement, a 40 per mil title deed fee is to be charged for both when the leasing company buys the property and when it is transferred to the lessee.)

For real estate transaction, the lessee shall not be paid the title deed fee during the transfer.

Real Estate Tax Exemptions in Sale-and-Leaseback Transactions

- Corporate Income Tax (CIT) Exemption

All of the gains (100%) arising from the sale to financial leasing companies (Sale-and-Leaseback) and the sale to the organization from which asset leasing and financial leasing companies took over the real estate are exempt from the Corporate Income Tax without a requirement for the property to be held for at least two years.

The following are the requirements for the transaction to be 100% exempt from Corporate Income Tax:

1. It should be a financial lease made in accordance with the Financial Leasing Law no. 6361,,

2. The asset should be sold to financial leasing companies within the scope of the same law with a provision to be purchased back at the end of the contract period,

3. The equipment subject to the contract should be a real estate,

4. The sales price should be collected by the end of the second calendar year following the year of sale,

5. The sales revenue should be kept in a special fund account as a liability for a period of five years following the year of sale,

6. The sale income should be used in addition to the capital within these five years.

7. The institutions engaged in the sale and lease of securities and immovable property are not covered by this exemption.

- Value Added Tax (VAT) Exemption

Provided that it will be applied to the immovable property directly purchased from and leased back to the lessee by the financial leasing companies and that the ownership of the immovable property in question shall be transferred to the lessee at the end of the contract period,

1. The sale of the immovable properties to be leased to the lessee,

2. The leasing of the immovable properties to be leased to the sellers,

3. The transfer of the immovable properties to be leased

are exempt from the Value Added Tax.