Finance leasing
When finance leases (: well english finance leases ) as a typical lease , the lessor passed on the investment risk to the lessee. The giver therefore only bears the credit risk and any agreed services .
General
During the term of the contract, the lessee does not become the real owner of the asset if the asset can also be attributed to him economically as property, since the lessor has no interest in getting the property back. After the contract period has expired, the lessee is usually entitled to a contractually granted option to purchase the item at the price of the residual value . According to jurisprudence, finance leasing is therefore an atypical rental agreement ( payment in installments against transfer of use ) with the material and price risk being passed on to the lessee in connection with a later purchase option at the lower residual value purchase price.
Since December 2008, finance leasing has been a financial service requiring a license within the meaning of Section 1 (1a) No. 10 of the German Banking Act (KWG).
Typical content of the contract
Such contracts are characterized by a fixed basic leasing period within which termination by the lessee is excluded. The main criteria of finance leasing according to international accounting is that the contract term covers the major part of the life of the asset (according to US-GAAP / IFRS > 75%) or that the majority of the present value of the leasing object is financed through the installment payments (according to US-GAAP / IFRS> 90%).
These features differentiate finance leasing from operate leasing :
- Fixed basic lease period without the right to terminate over a relevant period of the useful life,
- The lessee bears the investment risk,
- In principle applicable to all goods,
- The lessor bears the capital procurement and credit risk,
- A wide variety of options after the end of the basic lease period (purchase, return, etc., especially if the transition takes place on special terms)
- The lessee bears measures to maintain value (maintenance, insurance),
- The leased item is custom-made for the lessee and cannot be used by third parties.
- Full amortization.
Due to the various options for drafting contracts, it is not possible to make a clear statement about the accounting for the leased property. According to the principles of international accounting, however, the substance-over-form principle often applies here . This means that the economically achieved result always applies and has priority over the legal form . If, for example, only the lessee can de facto use the object, this must be classified as a finance lease, even if something different is stated in the contract.
Accounting according to German commercial and tax law
The question of accounting for the leased item by the lessor or lessee and thus the tax deductibility depends on what should be done with the item after the basic lease period. There are four types of contract:
- Leasing contracts without options
- exist if no agreement has been made about use after the basic lease period
- Leasing contracts with purchase option
- here the lessee has the right to acquire the item after the basic lease period has expired.
- Leasing contracts with an extension option
- with these, the lessee is allowed to extend the contractual relationship
- Leasing contracts with automatic contract renewal / special leasing
- With these, the leasing is automatically extended by a contractually defined period if the contract has not been terminated by either the lessor or the lessee.
In detail, according to the leasing decree of the Federal Ministry of Finance, the leased item is allocated to the lessor if the basic leasing period is between 40 and 90% of the useful life and the contract
- does not have an option right or
- if the purchase option has been agreed, provides for a purchase price that is greater than or equal to the residual book value
or
- provides for an extension option and the follow-up leasing is higher than the straight-line depreciation rate of the list price accordingly.
The residual book value is calculated using straight-line depreciation from the list price of the leased property.
For the investor, it is usually a tax advantage if the leased item is accounted for by the lessor.
Individual evidence
- ↑ Leaflet - Notes on the facts of finance leasing . Federal Financial Supervisory Authority , January 19, 2009, accessed on May 28, 2013.
- ^ Income tax treatment of leasing contracts for movable assets , BMF letter of April 19, 1971 (BStBl I p. 264) - IV B / 2 - S 2170 - 31/71.
