Rental is a popular option among purchasers of computer or security equipment, due to its flexibility and financial benefits. Rental is used widely for equipment with a high obsolescence factor. At the end of the rental period, options can include an offer to purchase the equipment, upgrade to the latest technology, hand the equipment back or continue to rent the equipment at a reduced rate.
Rental payments are generally tax deductible if the equipment is used for business purposes, and are usually considered from balance sheet liabilities. GST is payable on the base rental amount and can generally be claimed by the customer as an input tax credit. Clients should seek their own accounting advice for all taxation matters.
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