Over the last few years, many businessmen have opted to rent assets, especially vehicles, as an alternative to the more established methods such as leasing or purchasing with terms, as the fiscal obligations are more favourable.
In the first place, it should be pointed out that this type of contract, which does not have any specific ruling, is usually drawn up as a rental of movable assets, for a set period.
The lessee contracts a series of complimentary services (maintenance, insurance, repairs, replacement in case of breakdown) as well as the use of the item in question and there is no purchase option included.
This usually means that the rent paid is considered to be an outgoing cost and classed as a ‘non-financial rental’.
However, on occasions the items covered by these types of contracts become the property of the lessee at the end of the contracted period at a cost approximate to the monies outstanding on the previously agreed value of the items.
This is why the tax authorities consider that, in spite of there being no option to purchase, these situations can occur which, from the economic point of view, are similar to ‘financial rental’ contracts. In other words, those that include temporary use and a purchase option such as in the following cases:

Rental contracts in which the rental period is the same as the useable life of the item or, when it is less, that there is clear evidence that both periods will coincide eventually, the residual value not being significant at the end of its use and always when the agreed conditions do not include the economic rationality of the lease.

When the special characteristics of the items contracted mean that their use is restricted to the lessee.
In these situations, if it can be proved that the economic basis of the transaction is similar to a ‘financial renting’, given that there are no reasonable doubts that the option to purchase will be taken up, the lessee must register the transaction in accordance with the regulations appertaining to ‘financial rental’ contracts, as long as the economic assessment is equal.
Therefore, the rental payments in this type of contract cannot always be set off against tax, as on many occasions they must be treated as intangible assets. The rental quotas paid are then considered to be costs of repayment of the items acquired in the same manner as acquiring assets though the leasing system.
The tax authorities apply a policy, established by the actual Ley General Tributaria, through which the tax obligations fall on both parties, independent of the legal forms or denominations the parties use.
In the event of meeting the conditions required to make a renting similar to a financial lease (leasing), the use of this method of financing the assets acquired is also subject to possible tax deductions or allowances with the same requisites and conditions needed in the case of a financial lease.

Tomás Ballestero Lawyers, C.C. Arenal - Avda. del Pla, 126-2º, despachos 28A and 28B - Jávea. Tel. 96-579-29-46. e-mail tomasabogados@expertoslegales.com