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Road vehicles account for almost two thirds of the leasing volume in Germany

Leasing [ ˈliːzɪŋ ] (from English to lease , to rent, to lease ”) is a leasing contract or an atypical rental agreement in the civil law sense . In public communication, however, the term has a broader meaning as a financing alternative in which the leased object is procured and financed by the lessor and made available to the lessee for use in return for payment of an agreed leasing fee . However , there is no uniform definition of the term leasing in either business practice or literature.

Definition of terms

Leasing contracts are similar in character to rental contracts. Of the rental , leasing is distinguished by the fact that the rental contract due maintenance and repair power or the warranty claim is circulated to the lessee.

This is done in exchange for the assignment of the purchase rights by the lessor and the financing function in leasing. The lessee bears the risk of property and price. Lease contracts are therefore "atypical" rental contracts.

Both independent leasing companies and leasing companies associated with the interests of a bank or manufacturer act as lessors. Lease contracts can include additional agreements such as the lessor taking over the maintenance of the leased property for a monthly flat rate. Since the end of 2008, finance leasing has been a financial service requiring a license in Germany within the meaning of the German Banking Act (KWG).

Leasing is popular because the psychological inhibition threshold when concluding a contract is lower than when submitting a loan application to a bank. Depending on the individual case, tax and / or balance sheet advantages come into play.

Civil law ownership and beneficial ownership can diverge in leasing transactions. A particular difficulty lies in the fact that national tax regulations and international accounting standards such as US GAAP and IFRS affect the economic allocation of the leased object to the lessor or the lessee differently. In the German-speaking world, leasing is usually understood to be a leasing agreement in which the lessor remains the owner of the leased object under civil law. Other constellations are referred to as hire purchase . In international parlance, regardless of the question of who is the beneficial owner of the property, the term lease with distinctions, for example, between operate lease and capital lease, is common.

Leasing business

Typical process

Example of a leasing business
€ 50,000 Purchase price of a vehicle
€ 1,019.61 monthly leasing rate
36 months running time
€ 22,500 residual value
8.57% Effective interest rate
The above view of the lessee can be somewhat different for the leasing company if, for example, it receives an additional discount or discount of three percent from the supplier, which the lessee does not know, and on the other hand a commission is paid to an agent:
€ 50,000 Purchase price of a vehicle
- € 1,500 Discount, cash discount, subsidy
500 € commission
€ 49,000 Calculation basis of the contract
€ 1,019.61 monthly leasing rate
36 months running time
€ 22,500 residual value
9.67% Effective interest rate
Refinancing by the leasing company results in the following:
6.4% Refinancing rate
2.86% Interest margin
€ 51,895.74 Present value of the refinancing
€ 2,895.74 Present value margin
The present value of the sold or otherwise refinanced receivables from the contract for the refinancing interest is used to pay the purchase price and other costs. The excess, the present value margin, is the leasing company's contribution margin for administration, taxes, profit, etc. The leasing company can generate additional income if more than the calculated residual value can be earned at the end of the contract. The higher the property value and the interest margin, the higher the net present value margin generated for the leasing company. High-quality products that are marketable and technologically sustainable increase the chances of generating income for the leasing company after the end of the contract.

When leasing mobile capital goods, a leasing company usually orders an object desired by the lessee or enters into a sales contract that has already been concluded. The lessee determines the make, special equipment options and the supplier and has generally also negotiated the price with the supplier. The costs of the procurement and financing of the property by the leasing company are financed in whole or in part by a concurrent lease agreement for the property with the lessee with guaranteed minimum income during the term. For the acceptance of a leasing application by a leasing company, the creditworthiness of the applicant and the valuation of the property are decisive. Objects that are difficult to sell second-hand, that have been bought too expensively by the contractor, or that are technologically outdated or that are imminent to become obsolete represent inadequate security for the lessor be made.

Purchase and leasing are often negotiated in parallel if a prospect cannot enter into a purchase agreement without fixed financing. Agreements between the supplier and the leasing company, of which the interested party has no knowledge, are common. In this way, the supplier can offer the leasing company a cheaper purchase price to enable inexpensive financing or enter into obligations to sell the property at the end of the contract. On the other hand, if the supplier has made contact with the leasing company, he usually receives a commission.

The lessee pays leasing installments that cover the cost of consuming the property during the leasing period, its financing and a surcharge for administrative costs and the lessor's profit. Agreed ancillary services by the lessor such as insurance of the property or maintenance of the property are billed at a flat rate in service leasing contracts through surcharges.

After the end of the leasing contract and on the assumption that the lessee does not exercise a possible purchase or extension option, the lessor can dispose of the leased object again. Sale to the lessee or a third party, sublease to the lessee or a third party, storage and scrapping are possible recycling options. Often the original supplier of the property is involved. Car dealers, for example, usually record the condition and other data required for the final invoice when the vehicle is returned on behalf of the leasing company and take care of sales on the used car market.

In addition to the lessor, the lessee and the supplier of the leased object, other parties can be involved in leasing transactions. Examples are security providers who provide a deposit or a guarantee, intermediaries who receive a commission from the leasing company, and banks who purchase the receivable from a leasing contract and take on the credit risk.


According to the lessor

  • Manufacturer leasing : The manufacturer of the leased item is the lessor. However, this constellation does not apply in practice. As a rule, manufacturers maintain their own leasing companies as subsidiaries . A kind of "manufacturer leasing" is implemented through this. A typical example of this are the leasing companies of the major automobile manufacturers. Leasing companies with the name of a manufacturer do not have to be a 100% subsidiary of the manufacturer or a subsidiary of the manufacturer at all. In the company Linde Leasing GmbH , for example, the companies IKB Leasing GmbH and Dresdner Bank AG have a combined company share of 55% (as of 2009). As a rule, however, these companies act through contractual agreements in coordination with the interests of the manufacturer.
  • Leasing with leasing companies without manufacturer connection: The lessor is not the manufacturer of the leased item. It is a legally independent leasing company without any connection of interest to a manufacturer, which allows a lessee to use a certain leasing object (triangular relationship). The lessor finances the leased property and derives its profit from the financing. A leasing company that is not bound by any manufacturer's interests can be a more cooperative partner in the replacement of leased equipment with that of another manufacturer. The leasing of vehicle fleets with the use of vehicles from different manufacturers is only offered by independent leasing companies.
The interests of leasing companies can be different. In the case of a manufacturer leasing company that is obliged to promote sales, the interest in leasing a new property can prevail at the end of the contract, while an independent leasing company generates profits with a contract extension.
Financing companies of large manufacturers usually have better access to inexpensive finance on the capital market than medium-sized leasing companies. To promote sales of the products, these advantages are often passed on to lessees in the form of inexpensive leasing offers.

According to the lessee

  • Private leasing
  • Commercial leasing
(Organizations such as freelancers, associations, state institutions, etc. are neither private individuals nor traders, but are usually classified as commercial leasing customers.)

According to special contractual relationships

The company sells objects it owns to a leasing company and then leases them back. This gives the company short-term liquidity, but as a result has continuous liquidity burdens from the leasing rates. Balance sheet and tax advantages can be other reasons for doing business of this kind.
  • Large property leasing:
A leasing company is set up for large objects, for example a commercial aircraft, which only leases this one object and organizes the complex financing of the procurement.

After the alignment of the leasing company

Depending on the orientation of the leasing company as a pure financier or as a company with active knowledge in the procurement and exploitation of certain product groups, the leasing contracts offered are divided into

According to the leased objects

  • Equipment leasing
  • Real estate leasing
  • Vehicle leasing (special case of equipment leasing)
  • Fleet leasing (special case of vehicle leasing)

According to the location of the lessor and lessee's place of business

If the lessor and lessee are based in different countries, this is known as cross-border leasing. The usual constellation of the place of business of both contractual partners in the same national tax area is usually not referred to separately; the term domestic leasing appears occasionally . The different tax treatment of leasing in the different countries allows numerous tax-saving variants, which are usually prevented after some time by the tax authorities of the countries involved. For example, until 2009 it was attractive for Austrians to lease vehicles in Germany. Due to a decision by the EU on the treatment of sales tax, the benefits will no longer apply as of January 1st, 2010

After the contractual relationship between lessor and lessee

  • direct contractual relationships
  • indirect contractual relationships through subletting
Occasionally, dealers and leasing companies appear to their customers. Because of the better customer loyalty, the entire process by a dealer has advantages; the lessee also has only one contact and contractual partner. The dealer in turn leases the property from a leasing company, which puts the credit risk on the end customer without coming into contact with him. A distinction is made between direct contractual relationships with a lessee and indirect contractual relationships as dealer leasing with subletting and risk exposure to the subtenant. If, on the other hand, the credit risk is based on the dealer himself, who is granted the right to sublease, it is a direct leasing contract with the dealer, who is then bound to the leasing contract even if his subtenant fails.
Some smaller leasing companies and leasing agencies also use this model. In principle, they are sales organizations that look after their customers themselves, but leave the actual leasing business with credit checks, asset management, refinancing, etc. and all risks to a third party.

According to the distribution channel

  • direct sales
  • Vendor leasing
In vendor leasing, a leasing company works with a dealer who, in many business transactions, acts in place of the leasing company on the basis of cooperation agreements. For example, he knows the currently valid conditions and can offer leasing and purchase in one offer. In the event of a desire for innovation, the dealer can often determine the replacement costs of an old contract that may still be running without involving the cooperating leasing company and include them in offers.
With direct sales, the leasing company negotiates itself with the lessee in every phase of the business.

According to the property value

  • Small ticket leasing
  • Big ticket leasing
The terms are used without a precise definition. Small ticket leasing is usually understood to mean objects with a purchase price of less than 25,000 euros, such as small computer networks, office copiers, telephone systems for smaller companies, medical technology, etc. Big ticket leasing means real estate , commercial aircraft, vehicle fleets, etc. but does not have a definition of a minimum property value. There is no separate term for object values ​​in between.

Leasing contract

Leasing contracts are so-called sui generis contracts , ie they are not expressly regulated by law.

Basic types

  • Full amortization:
In this case, the acquisition costs of the leased item and the financing costs are paid in full within the agreed term, but there is no transfer of ownership. The leased item still has a residual book value.
  • Partial amortization (residual value leasing):
The lessee pays part of the acquisition costs of the leased property and its financing costs. After the contract expires (contract end) there is a calculated residual value. This residual value can be linked to contract options of the lessor or the lessee. Usual contractual agreements are:
  • Extension option with leasing rate calculation based on the residual value
  • Lessee purchase option
  • Lessor's right to tender
  • Clauses on the participation of the lessee in a sale proceeds above the calculated residual value or the obligation to compensate for the difference from a sale proceeds below the calculated residual value
In order to avoid classification as a hire purchase transaction, a transfer of ownership to the lessee must not be certain when the contract is concluded. The lessor will only make use of a put option if the market value of the property at the end of the contract is less than the calculated residual value.
Because the leased item does not have to be paid off in full with partial amortization, the leasing rates are lower than with full amortization for an identical term. If the rates are the same, the full amortization contract has a longer term than the partial amortization contract.
  • terminable leasing contracts:
If a lease is terminated prematurely, a lessee is dependent on the lessor's offer to consent to this change in the contract. In the case of terminable leasing contracts, however, the conditions for possible premature termination are already fixed when the contract is concluded. In order to avoid a classification of the contract as a rental purchase contract according to German tax law, termination is possible at the earliest after the expiry of 40% of the normal useful life of the property.


  • Leasing contracts with agreed deposit payments:
This is often a special form of partial amortization contracts. At the beginning of the contract, the residual value excluding sales tax is deposited in a deposit. This deposit reduces both the monthly leasing rate and the lessor's credit risk. Deposit payments do not have to be related to a residual value and do not have to reduce the leasing installments. Deposit payments by the lessee or a third party can function as a security analogous to an interest-bearing deposit.
  • Leasing contracts with an agreed advance rent payment:
An advance rent payment, which is to be paid at the beginning of the contract or when the leasing contract is accepted by the leasing company, reduces the leasing installments to be made during the term of the contract. A rental prepayment also reduces the risk of default for the leasing company. Depending on the creditworthiness of the lessee and the fungibility of the leased property, a rental prepayment is often made a condition of the contract. With property procurement costs of € 25,000 and a rental prepayment of € 5,000, the leasing company only needs to finance € 20,000. Occasionally, advance rent payments are agreed during the term of a lease, which then reduce the subsequent installments. Corporate offices and authorities use this option to use up annual budgets that would otherwise expire. A rent prepayment can be associated with tax advantages for taxpayers who only have to prepare an income-excess-invoice.
  • Leasing contracts with a right to tender:
Partial amortization agreements often include the lessor's right to tender. If the lessor does not find a utilization of the leased object that covers the calculated residual value at the end of the term, he can force the lessee to purchase the object via the right of tender. The lessee practically guarantees the calculated residual value via the put option, but for his part has no possibility of requesting the sale to him at the calculated residual value. If the market value at the end of the contract is higher than the calculated residual value, the leasing company will charge the higher price.
  • Leasing contracts with staggered leasing rates:
Leasing rates can be staggered in various ways, for example a seasonal company can pay higher rates during the season than outside of the season, or a new company that wants to establish itself can initially offer lower rates in order to preserve its liquidity.
  • Leasing contracts with variable leasing rates:
Leasing contracts with variable leasing rates are rarely offered. If a lessee expects interest rates to fall, refinancing the lessor with variable interest rates and continuously adjusting the leasing rates can be an attractive option. Some lessees are not interested in predictable costs in euros, but in predictable costs in dollars or another currency. Appropriate refinancing by the lessor and ongoing adjustment of the agreed leasing rate to the current exchange rate is then an option.
  • Leasing contracts with a participation of the lessee in the proceeds from the sale:
A participation by the lessee in the proceeds from the sale of an object or, in the case of partial amortization contracts, in the portion exceeding the calculated residual value can be advantageous for both contracting parties, as it justifies the lessee's greater interest in good maintenance of the leased object. In order to comply with the tax criteria for leasing contracts, the lessee's participation is limited to 75% of the proceeds exceeding the calculated residual value.
  • Vehicle leasing contract with mileage limit:
With this type of leasing contract, a maximum mileage is stipulated for the leasing vehicle. When the vehicle is returned, its mileage will be charged. If the specified mileage has been exceeded, the lessee must make an additional payment. Conversely, the lessee also receives a payment if the mileage is not reached. Lease contracts of this type usually contain a calculated residual value, which the lessee does not guarantee, but which represents a risk for the lessor. For the lessor, the calculated market value of a vehicle depends largely on the mileage.
  • Vehicle leasing contract with residual value fixed:
If you conclude a leasing contract with a fixed residual value, the market value of the leasing vehicle is determined at the end of the contract. In addition to the kilometers driven, the external and technical condition of the vehicle as well as the situation on the used car market are taken into account when returning the vehicle. If the market value determined in this way is below the residual value agreed in the leasing contract, the difference must be borne by the lessee. In the case of a market value above the agreed residual value, the lessee can agree to participate in the additional proceeds. The residual value risk in these contracts lies with the lessee, in particular the risk of disrupted used car markets at the end of the lease.
  • Service leasing:
In the case of service leasing, the lessee pays a fixed flat rate in addition to the leasing rate for a certain service such as vehicle inspection, vehicle repair, tire replacement, etc. The lessee thus has fixed, fixed monthly costs for the calculation of his business. The lessor has to calculate these costs and financially manage the asynchronous generation of income and expenses. The calculation has parallels to the insurance business, contingent risks can only be offset using large portfolios. The lessor must have extensive product knowledge.
  • Fleet leasing:
Fleet leasing is a special case of service leasing. The object of the leasing contract and its calculation is not a single object, but a vehicle fleet. The agreed services are often very extensive and include, for example, fuel billing or replacement vehicles. Agreed mileage of the vehicles is often offset against the vehicles in a fleet. Often these are not leasing contracts in the actual sense, but complex contracts in the field of outsourcing , with which administration, maintenance, financing and continuous renewal of the company vehicles are transferred to a service company.
  • Zero leasing:
Example of a zero leasing business
2700 € Object value of a computer
50 € monthly leasing rate
54 months running time
0 € residual value
0% Effective interest rate
Formally, this is a zero lease offer. The leasing rate does not include any interest or administration surcharge and is therefore cheaper than the purchase offer, as you can invest the money you do not need with interest. If, on the other hand, the selling price is overpriced or there is an immediate risk of a drop in price due to innovations that are not yet generally known on the market and the fair market value of the property is set at € 2000,
2000 € Object value of a computer
50 € monthly leasing rate
54 months running time
0 € residual value
13.87% Effective interest rate
There are also costs at the end of the contract. Before you return the device, which is costly with transport, packaging, etc., and have minor defects repaired because of the maintenance obligation, a lessee in practice prefers to buy it for 150 euros and dispose of it as electrical waste. With that, the deal looks like this:
2000 € Object value of a computer
50 € monthly leasing rate
54 months running time
150 € residual value
15.74% Effective interest rate
Zero leasing is more of a marketing term than a well-founded variant of the contract. From the lessee's point of view, the leasing rates do not include any surcharges for financing, administration, etc. This leasing application is used in the automotive industry in particular as a sales promotion instrument. Zero leasing often results from the fact that the calculation is based on list prices. In fact, hardly any buyer pays z. B. the list price of a car. The discounts granted to buyers are sometimes used to subsidize financing. Based on normal market sales prices, it is therefore often not a question of zero leasing. The leasing company's point of view, procurement at the normal market price minus any major customer discounts and subsidies from the manufacturer, and the lessee's point of view, object value equals list price, lead to different evaluations of the leasing business. However, manufacturers sometimes subsidize leasing transactions to promote sales. Unlike lowering list prices or large discounts on list prices, this does not damage a brand's quality image. Manufacturers expect advantages through the subsidy for follow-up business, which they see easier through permanent customer loyalty through the leasing contract and precise knowledge of the date of a necessary replacement.
The term zero leasing is sometimes also used for contract drafting, especially of vehicle leasing contracts, in which a high rental prepayment, a high calculated residual value and a low maximum mileage reduce the monthly payments to zero. Consumption of the property during the term of the lease is practically paid for by the rental prepayment. If the lessee bears the risk of the mostly high residual value, this variant can involve considerable costs at the end of the contract.

Tax and accounting law

Tax delimitation

In national tax law, criteria are defined that distinguish leasing contracts from hire purchase contracts , installment transactions, etc. The criteria vary from country to country. If the criteria for the economic assignment of the property to the lessor are not met, a civil law leasing contract is treated like a hire purchase contract or an installment transaction for tax purposes. In this case, the contractor is the beneficial owner of the property.

Business people can only achieve tax and balance sheet advantages with the procurement of capital goods through leasing if the lessor is the beneficial owner of the objects.

A leasing contract, which is valued like a hire purchase contract or an installment purchase under tax law, remains a leasing contract under civil law. A transfer of legal ownership under civil law at the end of the term requires the civil law design as a hire purchase agreement.


A transfer of ownership to the lessee must not be the fixed or probable goal of a leasing contract, which would otherwise qualify as a hire-purchase contract for tax purposes. An agreed purchase option of the lessee must not be cheap, i.e. below the book value of the property at the end of the contract, for example, since the legislature assumes in this case that the exercise of the purchase option is already certain when the contract is concluded and the transfer of ownership is the actual goal. If the contract object is practically consumed by a contract period close to the normal operational useful life, the tax authorities assign beneficial ownership to the contractor. In the case of a full amortization contract over a short term, the tax authorities assume that this is economically unreasonable and assume hidden ancillary agreements for the transfer of ownership.

In terms of tax law, a leasing contract for a mobile asset is qualified as a hire purchase agreement with the assignment of beneficial ownership of the object to the contractor, if

  • In the case of full amortization contracts, the term of the contract is less than 40% or greater than 90% of the normal operating life of the property ( 40-90 rule )
  • an extension option has been agreed, whereby the present value of the extension rent is less than the book value of the property at the time of the option
  • a purchase option has been agreed, whereby the purchase option price is lower than the book value of the property at the time of the option
  • after the end of the term, it has been agreed that the contractor will participate in the sales proceeds exceeding the calculated residual value of more than 75%
  • a non- fungible object is the subject of the contract

If none of these criteria apply, the beneficial ownership of the object is assigned to the lessor, and the contract is also classified as a leasing contract for tax purposes with economic attribution of the object to the lessor. Different criteria apply to real estate leasing.

Leasable goods with assignment to the lessor according to tax law or commercial law can be movables , real estate and conditionally intangible assets, provided they are also useful for third parties and are fungible. An object that is specially manufactured for a company and can only be used by this company, however, is always assigned to the lessee for tax purposes (so-called special leasing).

In the case of a hire purchase agreement, the property is economically attributable to the hire buyer. This must include both the property and the obligations from the hire purchase agreement in his balance sheet. The monthly costs consist of the interest portion of the hire purchase installments and the depreciation of the property.

In the case of a leasing contract that complies with tax law, the object is economically attributable to the lessor. The leasing installments are the full monthly costs of a commercial lessee who neither reports the property as fixed assets nor does it have to account for long-term debts from its financing.

20% of the leasing rates for movable assets (§ 8 No. 1d) GewStG) and 50% (until December 31, 2009: 65%) of the leasing rates for immovable assets (§ 8 No. 1e) GewStG) have been commercial since the corporate tax reform of 2008 To add the lessee to the profit to determine the assessment base for trade tax . The trade tax advantages of leasing are practically eliminated, especially since the inclusion of interest paid for loans in the trade income has been reduced at the same time. In a publication by the Research Institute for Leasing at the University of Cologne , a disadvantage of leasing is found.


In Switzerland, leasing is classified as a special type of transfer of use. The accounting of the property at the lessor and full recognition of the leasing installments, there called leasing interest, as operating expenses of the lessee is the usual accounting of these transactions. The case law and recommendations of the Swiss Leasing Association (SLV), which claims to represent most of the Swiss leasing companies, define the conditions for the aforementioned treatment vaguely. The terms of the leasing contracts must be based on the depreciation periods and any intention to avoid tax must be excluded. According to a code of the SLV, a finance lease contract (according to the definition of finance lease in Switzerland) should not be less than two thirds of the useful life of the leased object. According to the SLV, Swiss lessees cannot achieve significant tax advantages.


In the Income Tax Guidelines 2000 (EStR 2000; Rz. 135 ff.), The Federal Ministry of Finance makes a distinction to leasing that corresponds to the German hire-purchase definition, but in detail there are deviations for determining the allocation of a leased object to the lessor or the lessee.

There are a number of special features in vehicle leasing. The input tax deduction is excluded for both purchase and leasing. A luxury limit limits the maximum depreciable purchase price of a vehicle and therefore the proportion of a leasing rate that can be calculated as a business expense.


While the tax advantages of leasing are determined by the respective national tax law and the distinction made there between leasing and purchase transactions, different definitions apply to international accounting standards such as US GAAP and IFRS . This limits the design options for leasing contracts if they are to meet the leasing classification with economic allocation of the property to the lessor in order to achieve balance sheet and tax advantages according to all accounting standards.

The tax allocation in Germany is regulated by the leasing decrees of the Federal Ministry of Finance , whereby a distinction is made between movables decrees and real estate decrees. Hire purchase and leasing are differentiated.


US-GAAP defines in the provision SFAS 13 a distinction between capital lease and operate lease . While German tax law allows a maximum term of leasing contracts over 90% of the normal operational useful life of the property as a distinction to hire purchase , the limit for operating leases in SFAS 13 is set at 75%.

A leasing contract is qualified as a capital lease if one of the following four conditions applies, otherwise it is an operating lease :

  • There is a transfer of ownership at the end of the contract period.
  • There is an advantageous purchase or extension option for the lessee at the end of the contract period. ( bargain option )
  • The contract period is 75% or more of the economic useful life of the property.
  • The present value of all payments to be made by the lessee, calculated using the effective interest rate of the contract, is 90% or more of the market value of the property. ( fair market value )
  • It is a special leasing, the property cannot be used by third parties without major modifications.

With capital leases, the lessee must capitalize the present value of the future lease payments to be made to the lessor as fixed assets. This asset value is offset by a corresponding item as a liability from this leasing obligation on the liabilities side of the balance sheet. The ongoing lease payments are split into a repayment portion and an interest portion. The asset itself is capitalized and depreciated over its normal useful life.

A disadvantage of this accounting method for the lessee is the fact that it extends the balance sheet . This is accompanied by a deterioration in the equity ratio . If, on the other hand, a lease can be classified as an operate lease , the equity ratio does not deteriorate. The leasing rates are operating expenses, there are no balance sheet items.


In the provision of IAS 17, IFRS defines a distinction between finance leases and operate leases . For example, IFRS qualifies a contract as a finance lease , whereby the property is assigned to the lessee's fixed assets in the same way as a hire purchase if the present value of all payments guaranteed by the lessee from the contract exceeds 95% of the property's value. US GAAP knows a similar condition for the classification as a capital lease , but defines the limit of the present value of all guaranteed payments as 90% of the market value of the property at the start of the lease.

Finance leases ( capital leases ) are to be assessed economically as financing purchases, while operating leases represent pure leases.

The accounting of contracts classified as finance leases is carried out as with capital leases under US GAAP with the same disadvantages for the lessee.

According to IFRS, a lease is qualified as a finance lease if one of the following five conditions is met, otherwise it is an operating lease :

  • There is a transfer of ownership at the end of the contract period.
  • There is an advantageous purchase option for the lessee at the end of the contract period. ( bargain option )
  • The contract period is 75% or more of the economic useful life of the property. (The rule only speaks of major part , which is interpreted differently.)
  • The present value of all payments to be made by the lessee ( minimum lease payments ), calculated using the effective interest rate of the contract, is almost the market value of the property at the start of the contract. ( substantially all of fair market value ) (usually set at 90%)
  • It is a special leasing, the property cannot be used by third parties without major modifications.

The representation here only covers the essential classification features. There are extensive decisions on specific contract constellations.

There are proposals to standardize the provisions of US GAAP and IFRS and, in particular, to account for obligations and rights of use from operating leases. The informative value of balance sheets is reduced if, for example, airlines can lease entire aircraft fleets without the resulting liabilities being shown in the balance sheet. The International Accounting Standards Board (IASB) intends to adopt new rules by mid-2011 that will entail extensive changes for lessees who have to prepare annual financial statements in accordance with IFRS. The balance sheet advantages of leasing will then probably no longer apply.

Civil law (Germany)

In the event of a defect in the leased item, the lessee must bring a civil action against the supplier of the leased item. This typically corresponds to the contractually agreed civil law situation between the parties involved in the leasing business. In this case , the lessee also asserts a right of retention to the leasing installments against the lessor. The limitation of the claim of the lessor to pay the lease rate according to § 205 BGB during a rescission of the sales contract directed dispute the lessee, the exclusion of the liability for defects in the context of the lease purchase legal warranty claims have been transferred and rights against the supplier inhibited . Because the right of the lessee to temporarily suspend the payment of the leasing installments if he asserts claims and rights against the supplier that have been transferred to him is a temporary right to refuse performance agreed in the leasing contract. The limitation period is also suspended if the lessee is contractually bound form, the retained lease payments during the warranty process for hedging purposes in accordance with §§ 232 ff BGB in court deposit. The right to provisionally suspend payment of the leasing installments in accordance with Section 205 of the German Civil Code (BGB) does not apply retrospectively if the action against the supplier aimed at rescinding the purchase contract is legally rejected. If the lessee's resignation turns out to be unjustified, it is certain that the lessor's claim to payment of the leasing installments was entirely justified and not temporarily unfounded. The suspension of the statute of limitations of the lessor's claim to payment of the leasing installments according to § 205 BGB due to the right of the lessee to provisionally suspend the leasing installments also acts against the surety who has undertaken to take responsibility for the lessee’s liabilities from the leasing contract.

Leasing company

Organization and way of working

Owning company and double-decker model

Some leasing companies work with holding companies that acquire the leased objects and lease them to the leasing company, which then leases them to end users. Owning and leasing companies often have the same owner.

This construction has two advantages.

There are tax advantages because the holding companies with high fixed assets are located in communities with low trade tax or abroad. Furthermore, profits can be steered to the location of the holding company by appropriately drafting the leasing contract between the holding company and the leasing company. However, these constructions are partly also necessary for reasons of competitiveness in order to achieve tax neutrality for loan financing. Until the end of 2008, leasing companies were excluded from the banking privilege of trade tax, since then only pure finance leasing companies have been able to take advantage of this.

On the other hand, this construction makes financing easier. Leasing companies often finance themselves by selling the receivables from leasing contracts to a bank, as this is tax-neutral due to the trade tax disadvantage vis-à-vis banks. The cash value paid is then used to pay for the leased property and covers the leasing company's margin. The creditworthiness of the lessee plays a role here. In the construction with a holding company, the claim of the leasing contract between the holding company and the leasing company can also be sold. In particular, leasing companies of manufacturers with an interest in selling their products to customers with poor credit ratings can manage the refinancing in this way, but then bear the risk of default, because the contract between the owner and leasing company is not affected by disruptions to the contract between the leasing company and the end user. Cheaper refinancing rates can be another reason for refinancing the leasing business between the owner and rental company.


Some large leasing companies have financing departments or independent financing subsidiaries who bundle the newly concluded leasing contracts in packages according to duration and risk and negotiate these larger volumes with banks. The conversion into interest-bearing securities ( asset-backed securities , secured money market paper ) and their sale on the capital market is also practiced.

Smaller leasing companies, on the other hand, always look for a refinancing bank or a company specializing in the refinancing of leasing companies and can only accept a leasing application if it is successful. Usually the minimum payment to be made by the lessee from a lease is sold.

For large properties, special financing with often several banks involved is set up. Financing through shareholders as investors in the property is another variant.

Some companies work with high equity, which is realized through leasing funds and the status of the investors as atypical silent partners , which brings tax advantages for investors, but also risks. Because of the bankruptcy of leasing companies and problems with keeping the prospectus promises, some of these funds have come under fire.

As a result of the financial crisis , banks have reduced or even stopped refinancing leasing transactions due to the loss of part of their equity, including Landesbanks such as LBBW . Refinancing has become scarce and more expensive in the leasing industry. There is also the discrediting of debt-backed securities as an alternative as a result of the financial crisis.

Competitive disadvantage

The leasing industry in Germany complains about distortion of competition compared to banks and loan financing.

State or federal funding programs for investments are often based on subsidized loans that are not open to leasing finance.

Since the end of 2008, finance leasing has been a financial service requiring a license in Germany within the meaning of the German Banking Act (KWG). This is accompanied by increased bureaucratic effort due to mandatory reports to the BaFin , which is comparatively more demanding on the mostly small leasing companies.

In the opinion of the BDL Bund Deutscher Leasingunternehmen , however, tax disadvantages vis-à-vis banks in Germany have only been inadequately eliminated. Interest paid can be added proportionately to a quarter of the trade income [see § 8 No. 1 letters d), e) GewStG], the assessment basis for trade tax. The refinancing of banks is excluded from this in the so-called banking privilege § 19 GewStDV. The preferential treatment for leasing companies was introduced in 2008, but limited to companies that only operate finance leasing. Auxiliary and ancillary business (e.g. services) are harmless up to a level of 50%, so that the vast majority of companies can take advantage of the relief.

For the lessee, the organization of a leasing company is irrelevant. An efficient way of working should be reflected in fair contractual terms and conditions.

Cases of fraud

There have been numerous cases of fraud in the past, the most famous being the Flowtex and Kronenberg cases . In the case of Flowtex, drilling rigs that did not exist at all were sold to leasing companies and leased back. In the case of the Kronenberg company, sham deals were made with pianos. In the case of devices that, unlike cars, are not linked to clear documents such as a vehicle registration document, fraud of this kind is difficult to detect from the information situation of a leasing company. In other cases, too, companies have fraudulently obtained loans by selling existing machines to several leasing companies and leasing them back at the same time.

Selling the leased equipment and leaving the lessee behind is another type of fraud.

If the supplier and lessee jointly pursue the goal of committing a crime against a leasing company, this is particularly difficult for a leasing company to recognize. Devices delivered to the lessee are incorrectly declared by the supplier and overpriced, on the other hand, the lessee confirms receipt of the declared devices to the leasing company. By paying the supplier for the items that were not delivered at all or not in the declared quality, both the supplier and the lessee obtained a loan by fraudulence. Cases of this type are usually only discovered when the property is insolvent and the property is secured. Since the leasing companies assign purchase rights such as the acceptance of the equipment to the lessee, the handling of criminal energy of the contractual partner has weak points.

Leasing market (Germany)

The following figures can be found in the information provided by the Federal Association of German Leasing Companies and independent economic institutes:

The volume of new leasing business for 2014 was estimated as follows:

  • Real estate € 1.4 billion
  • Movables € 45.9 billion

The forecast includes a decline in new business of around 20% caused by the financial crisis . According to the association, this is not only due to the demand. Many leasing companies have problems obtaining refinancing as banks reduce their credit exposure .

The total stock of equipment financed by leasing is given at around 200 billion euros.

The main product groups leased are:

  • Road vehicles 63.4%
  • Production machines 12.1%
  • Office machines and IT 9.6%

In Germany, leasing is said to have a share of around 21% of overall equipment investment. This number, known as the leasing rate, differs considerably when considering individual industries. The share of investments financed by leasing in 2008 in some industries:

  • Construction 82.7%
  • Trade 34.8%
  • manufacturing industry 18.3%
  • Services 12%

It is difficult to determine the number of leasing companies in Germany that operate independently of one another and actively participate in the market. Many leasing companies are property companies that were founded exclusively to finance a specific leasing object such as real estate. After mergers of smaller leasing companies, established company names were often retained, even though they were no longer independent companies. Leasing companies are sales-oriented and occasionally set up subsidiaries in order to address customers with a specific interest via company names such as X Autoleasing GmbH . About 190 leasing companies belong to the BDL Bund Deutscher Leasingunternehmen . A list published by the magazine FLF Finance Leasing Factoring in issue 6/2009 names 2221 active leasing companies. According to a table from the Bundesbank as of September 2009, 344 companies have applied for permission to operate finance leasing transactions.

The structure of leasing companies in Germany is shaped by small companies. According to information from the BDL Bund Deutscher Leasingunternehmen , half of its members have fewer than 15 employees and only a quarter of the companies organized in the association employ more than 50 employees. Only three leasing companies in Germany are listed.

Some business journalists suspect an imminent consolidation of the industry through mergers and acquisitions because of the decline in sales during the financial crisis and because of the supervision of leasing companies introduced by BaFin in 2009.

For the first time in 2009, the industry recorded declining deals in all property areas. The largest object area, road vehicles, fell by over 20 percent. In the middle and upper class, the classic leasing segment, new registrations fell by up to 20 percent and, with them, new leasing contracts. During the financial crisis, existing leasing contracts were often extended instead of new ones. A market consolidation of the leasing business is already taking place, with banks in the crisis concentrating on their core business and less on refinancing activities at leasing companies (research by the leasing institute). According to Basel II, banks must also carry out a rating for their customers, the refinanced leasing companies, and also rate the customers of the leasing companies. A bad rating may prevent further refinancing of new leasing contracts. Some leasing companies have problems with refinancing because of the bad rating, the interest costs increase. These price increases have to be passed on from the leasing providers concerned to the lessees, which will presumably lead to a market consolidation of the leasing providers. However, there should not be a comprehensive credit crunch for leasing companies in early 2010.

Leasing market (Austria)

According to the Association of Austrian Leasing Companies (VÖL), almost 169,000 leasing contracts with a total volume of EUR 5.7 billion were concluded in Austria in 2013.

Leasing market (Switzerland)

The 2011 annual report of the Swiss Leasing Association (SLV) contains the following information as of December 31, 2011, relating to the association members:

New business (turnover in billion CHF ):

  • Cars excluding fleets (private and commercial) 6.00
  • Mobile capital goods excluding fleets (including commercial vehicles) 3.08
  • Fleets 1.08
  • Real estate leasing 0.15
    • New business total 10.31

Stock (in billion CHF):

  • Cars excluding fleets (private and commercial) 10.69
  • Mobile capital goods excluding fleets (including commercial vehicles) 8.77
  • Fleets 2.06
  • Real estate leasing 1.17
    • Total number 22.69

The market share by industry:

  • Captives (brand or import-related companies) 48%
  • Swiss banks 37%
  • Bank affiliated companies 9%
  • Independent companies 6%

According to estimates by the SLV, the members of the SLV cover approx. 80–90% of the entire Swiss leasing market, the total market should have a contract volume of CHF 26 billion.

Evaluation from the lessee perspective

An assessment of a leasing transaction as advantageous or unfavorable is only possible in specific individual cases compared to existing alternatives. The individual weighting of advantages and disadvantages as well as the individual assessment of risks also play a role.


For a lessee, leasing can have the following advantages:

a. qualitative: balance sheet neutrality (no change in the equity ratio ), “pay as you earn” effect, clear and transparent calculation basis, for vehicles / IT / machines: always new models
b. quantitative: preservation or increase of liquidity, preservation of equity, 100% external financing , lower administrative costs (see also Basel II )

In the case of freelancers, authorities, associations, etc. that are not subject to accounting, the advantages only partially apply, in contrast to commercial lessees, and in the case of private individuals mostly not at all.

A closer look at some of the potential benefits of leasing:

  • The liquidity is protected (instead of a one-time higher cash outflows, is a continuous lower liquidity outflow instead).
  • A credit line agreed with banks remains unrestricted and is not used by the leasing investment. However, the lessee must then ensure that the leasing company does not refinance the contract with the lessee's house bank.
  • In Germany, the leasing rates for income tax and corporation tax are fully tax deductible as business expenses, provided the lessee does not have to activate the leased property (for activation see so-called leasing decrees of the Federal Ministry of Finance). In the case of trade tax, however, these operating expenses are partly added in accordance with Section 8 No. 1 GewStG. However, this only appears to be an advantage over loan financing, because bank interest and depreciation are also fully tax deductible. However, the tax burden for leasing can be reduced in the short term, as the lessee is not bound to the useful life of the depreciation table in return for depreciation.
  • Leasing is off-balance sheet for the lessee . The following applies to leasing agreements corresponding to the leasing waivers under tax law, with the leasing object being capitalized by the lessor: They are generally neutral in the balance sheet and therefore do not appear in the balance sheet of the lessee, who only records the leasing or rental expenses in his income statement as operating expenses. The lessor capitalizes the leased assets as fixed assets or rental assets and depreciates them according to the depreciation periods . The lessee's equity ratio is not worsened by the balance sheet extension.
  • The leasing costs are periodically recurring payments that are incurred in parallel with the use of the leased property. Financial advance payments are not necessary, since the property is continuously self-financed through productive use (“Pay as you earn” effect / cost congruence ).
  • The periodic lease payments serve as a secure calculation basis for internal planning .
  • The advantages of leasing create opportunities for operational innovation and rationalization.
  • There is no disposal or recycling by the lessee at the end of the contract - the leased object is returned to the lessor at the end of the leasing period. By returning the leasing objects and moving them in, the investment objects of a company are always kept up to date. However, it depends on the competence of the leasing company whether it is more successful in realizing it. For example, a carpenter who no longer needs a leased woodworking machine may know its value and sales opportunities better. The return to the lessor can also involve costs for deinstallation and transport.
  • Any lower cost prices of the lessor, for example due to larger purchase quantities, can be passed on to the lessee in the form of favorable leasing conditions.
  • Leasing with appropriate service by the lessor saves administrative expenses for the lessee.


This is offset by the following disadvantages or possible disadvantages for the lessee:

  • Private leasing:
Since private individuals cannot claim the leasing installments for tax purposes, other types of financing are usually chosen in the private sector. In particular, a bank loan usually makes more economic sense. However, manufacturer leasing companies in particular see private leasing as a promising marketing opportunity for them. By applying for a low leasing rate, the potential customer is given the prospect of a liquidity-saving vehicle procurement. In addition, it is more attractive for large automakers to hide discounts in leasing rates than to lower list prices or give high discounts on them. The latter would annoy buyers who bought at higher prices and depress the market values ​​of the used vehicle stock. For private customers, the conclusion of a hire purchase agreement with a leasing company can be an attractive alternative to an installment loan from the house bank, especially if the offer from a manufacturer leasing company includes subsidies as marketing measures that would not be available in the event of a purchase. According to some experts, private leasing only makes sense if the lessee plans to return the leased property at the end of the contract. Which offer is the cheapest for private customers (leasing, financing manufacturer's bank , financing house bank , cash purchase) can be determined relatively easily by adding up the present value of all costs (down payment, sum of the installments, possibly final payment) due to the negligible tax aspects.
  • The lessee does not acquire ownership of the leased goods and therefore has no options for a possible sale if it is not used or liquidity problems.
  • In legal disputes, e.g. The triangle lessor-lessee-manufacturer comes into play , for example, in the areas of guarantee and warranty . The lessee may have to assert claims against the supplier or manufacturer “on his own account”, so to speak. A suspension of payments to the lessor is usually not easily possible.
  • In the event that the object is lost during the lease term, for example in the event of theft or accident of a vehicle, an insurance policy taken out usually replaces the lessor's loss of the object at its market value, but the lessee must pay fees and damages to the leasing company for the early termination of the leasing contract. Among other things, this has costs for the early redemption of refinancing over a fixed term. In addition, the book value of the property can be higher than the replaced market value; the lessee must compensate the difference between the replacement value and the residual value of the lease with the compensation claimed. Neither partial nor fully comprehensive insurance apply here. In order to prevent this, the lessee should agree a replacement value compensation in the insurance contract or take out GAP cover as an additional insurance benefit for leased vehicles, which covers this difference. However, there is an analogous problem when financing vehicles with installment loans. The replaced market value of the lost property is generally less than the remaining credit to be repaid. Both value streams run asynchronously, since a vehicle has a strong loss of value in the first year of use, while loan installments at the beginning of the term contain a high interest component and correspondingly lower repayment components.
  • The uncertain costs of returning the leased equipment must be taken into account. Contractual terms, according to which the lessee has to return the equipment in its original packaging with all operating instructions to a warehouse of the lessor, can be associated with considerable costs. Furthermore, there is often a dispute about the distinction between normal wear and tear and maintenance costs to be borne by the lessee. Smaller defects, which do not affect the basic usability, are often accepted by an owner and not repaired for economic reasons; a lessee, on the other hand, is bound by the maintenance obligation. A lessee cannot make a decision to scrap the property in the event of an uneconomical, extensive repair without prior agreement with the leasing company about the purchase of the object; in case of doubt, he must have the repair carried out.
  • In the case of complex equipment, for example the IT of a company, leasing-financed retrofitting and upgrades often no longer result in a congruent end of the lease term for all components. A renewal of the entire equipment is then burdened with costs for the premature termination of ongoing leasing contracts.
  • Complex technological equipment often cannot be replaced on time on the day the lease ends. Companies that are dependent on this equipment run a high risk with the possible loss of usage rights if they have not agreed an extension option.
  • In the event of liquidity problems and negotiations about deferrals, a house bank with which we have long-standing business relationships can be a more cooperative partner. Leasing companies have a means of asserting their interests by threatening to deprive them of the objects that a company may need for operational reasons.


Leasing competes with other alternative forms of financing:

Other meanings

The term leasing is a popular Anglicism that corresponds to the zeitgeist and is often used to describe business that is not a leasing business. An example are temporary employment agencies , which often advertise the posting of workers to another company as personnel leasing.

When companies offer leasing of Christmas trees or leasing toilets for events, these may be leases in a civil law sense, although normal leases are more likely to be accepted. In this context, the term leasing does not have the usual meaning as a financing alternative for capital goods.

When leasing tablecloths for restaurants and similar offers, the regular collection and cleaning services are usually the focus of value creation. It is questionable whether the concluded contracts are to be assessed under civil law as predominantly rental or leasing contracts.


Gerhard Polt wrote a satirical story about leasing. A video project containing the story of a Hitler speech, spoken by Polt himself, has become very popular on the Internet.

See also


  • Albrecht Dietz: Business administration and the practice of leasing. in: ZfB, Volume 50, 1980, Issue 9, pp. 1017-1027.
  • Albrecht Dietz: The economic fundamentals of leasing. in: Archive for civilist practice, Volume 190, Issue 3–4, 1990, published at the same time in the ZfB Zeitschrift für Betriebswirtschaft No. 11, 1990.
  • Hans J. Bender: “Compact training. Leasing. “ Friedrich Kiehl Verlag, Ludwigshafen (2001), ISBN 3-470-51501-8 .
  • Eck, Wolfgang: Interview with the leasing pioneer on 50 years of FLF, in: FLF Financing, Leasing, Factoring, 50th year, 2003, issue No. 6, p. 256.
  • Klaus Feinen: "The leasing business." Verlag Knapp, Frankfurt (2002), ISBN 3-8314-0736-3 .
  • Jost Kratzer: “Leasing compact.” Bank-Verlag, Cologne (2005), ISBN 3-86556-093-8 .
  • Martinek / Stoffels / Wimmer-Leonhardt: Handbuch des Leasingrechts. 2nd edition, Munich 2008, Verlag CH Beck, ISBN 978-3-406-56398-0
  • Stefan Papst: "Leasing." Verlag Österreich, Vienna (2006), ISBN 3-7046-4855-8 .
  • FLF financing, leasing, factoring , periodicals, publishing house for sales economy, publisher, among others, BDL Federal Association of German Leasing Companies ISSN  0174-3163 .

Web links

Wiktionary: leasing  - explanations of meanings, word origins , synonyms, translations

Individual evidence

  1. duden.de: Leasing
  2. Leaflet - Notes on the facts of finance leasing . Federal Financial Supervisory Authority , January 19, 2009, accessed on May 28, 2013.
  3. ↑ Directory of members of the BDL Federation of German Leasing Companies, as of December 2009.
  4. Silvia Schattenkirchner: The development of leasing law from mid-2009 to the end of 2011 , NJW 04/2012, p. 197.
  5. Thomas Hartmann-Wendels, Patrick Wohl: On the trade tax treatment of leasing in the Corporate Tax Reform Act 2008  ( page no longer available , search in web archivesInfo: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice. Preliminary print from Leasing - Wissenschaft und Praxis , April 2007, p. 22, PDF document, accessed on December 14, 2009.@1@ 2Template: Dead Link / www.leasing-verband.de  
  6. Portrait - History . Website of the Swiss Leasing Association, accessed on May 28, 2013: "The SLV represents most of the companies active in the leasing of capital and consumer goods and real estate as the most important interest group in the leasing industry in Switzerland."
  7. Tax issues . Website of the Swiss Leasing Association, accessed on May 28, 2013: "[...] the Swiss lessee, unlike his colleagues abroad, cannot achieve any significant tax advantages."
  8. Leasing decrees , accessed on December 7, 2009.
  9. ^ Judgment of the BGH from September 16, 2015, VIII ZR 119/14, NJW 2016, 397 with comment Simone Harriehausen.
  10. Leibniz Institute for Economic Research: Leasing business grows significantly faster in 2014 than capital investments - moderate optimism for 2015 ( memento of the original from April 19, 2015 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF), accessed on September 26, 2015. @1@ 2Template: Webachiv / IABot / downloads.leasingverband.de
  11. BDL Newsletter, October 2009, p. 2.
  12. The Bundesbank's financial leasing list, xls document ( memento of the original from March 26, 2010 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. , accessed December 19, 2009. @1@ 2Template: Webachiv / IABot / www.bundesbank.de
  13. BDL Annual Report 2008/2009, p. 38.
  14. leasing market Austria . ( Memento of the original from March 13, 2014 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. Website of the Association of Austrian Leasing Companies, accessed on May 16, 2014. @1@ 2Template: Webachiv / IABot / www.leasingverband.at
  15. a b Annual Report 2011  ( page no longer available , search in web archivesInfo: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice. . Swiss Leaing Association, accessed on May 28, 2013, here p. 10 (PDF; 266 kB).@1@ 2Template: Dead Link / www.leasingverband.ch  
  16. a b Annual Report 2011  ( page no longer available , search in web archivesInfo: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice. . Swiss Leaing Association, accessed on May 28, 2013, here p. 12 (PDF; 266 kB).@1@ 2Template: Dead Link / www.leasingverband.ch  
  17. GAP coverage. Retrieved March 9, 2018 .