Renting a car for employees is not actually a new practice; yet, it became popular recently due to the advantages it brings.

The Differences Between Purchasing And Renting

There are many advantages to renting a car rather than purchasing one for the company and registering it. Let’s explain the subject and start with the purchasing activity.

1- Purchasing a Car for the Company

a) For the cars purchased within a certain year, it is not possible to amortize them for the year they were purchased, in other words, for 12 months. For the period between the month the car was purchased and the end of the year, it is possible to calculate the monthly amortization and record it as an expense (Article 320 of Tax Procedure Law).

b) The value added tax paid during the purchase cannot be subject to reduction. It can qualify either as an expense or a cost. (Law on Value Added Taxes Article 270/2)