Article 18 of Law No. 6361 defines the finance lease: the lessor, at the lessee's request and choice, procures an asset and leaves possession with the lessee for rent. Title stays with the lessor during the contract (Article 23), and the parties may grant the lessee a purchase right at the end. In an operating lease the equipment goes back at the end.
| Item | Finance | Operating |
|---|---|---|
| At the end | Purchase right, if written, is exercised | Equipment goes back |
| Maintenance | With the lessee unless written otherwise (Article 24) | Per contract |
| Insurance and damage | Insurance compulsory, premium and damage risk with the lessee | Per contract |
The monthly figure alone misleads: if it is not written who bears wear parts such as wheels, seals and latches, the comparison is incomplete. In an operating lease the return day also sets the bill; read the normal-wear limit and the early exit clause before signing.
A business with steady volume that will use the equipment for years looks for a structure close to ownership; work tied to a contract and uncertain after three years puts flexibility first.
In accounting, IFRS 16 (TFRS 16 for entities applying TFRS) introduced a single model for lessees from 1 January 2019: leases longer than 12 months bring a right-of-use asset and a lease liability onto the balance sheet. For the lessee the finance or operating label therefore no longer decides the balance sheet; discuss the tax result with your accountant.
