Leasing or purchase

Leasing or purchase

Leasing has been part of everyday business for years when investing in the company vehicle fleet. In view of the rapid development in the plastics industry, more and more companies are discovering leasing for their production machinery as well. In practice, however, the question arises before every investment as to which option is better: leasing or the classic installment purchase?

Leasing is ideal for machines with fast innovation cycles. In other words: If a production machine is technically obsolete after three years, because in the plastics industry the further development of new production technologies is progressing rapidly, a company can return its leased machine at the end of the contract period and lease a new machine on the latest technical level.

If the company's bank refuses to grant further loans, many companies are given the opportunity to realize their planned investments, especially with leasing companies. The leasing financing is not subject to the regulations of Basel II and Basel III. Although the conclusion of a leasing contract does not worsen the equity ratio of the balance sheet. But banks take leasing liabilities into account when rating. Demand higher interest rates or more collateral for new loans.

Bank advisors can see that leasing agreements exist either from the income statement or from the notes to the financial statements. Leases do not have to be small corporations according to § 285 no. 3, 3a HGB and groups of companies according to § 314 Abs. 1 no. 1, 2a HGB in the notes to the financial statements.

Leasing from a tax perspective

Plastics processors who always produce at the highest technical level should choose the leasing terms so that the leasing company remains the owner of the machine during the contract period. In this case, the machine is not capitalized as a fixed asset. Leasing installments represent fully deductible operating expenses. The special payment at the beginning of the leasing period must be actively deferred. To be distributed over the term of the contract with a reduction in profit.

Example: The Kunststoff-GmbH leases a newly developed machine. The leasing contract runs from January 2013 to January 2018. At the beginning, a special leasing payment of 100.000 EUR due. This special payment is to be actively deferred. This means a deduction of operating expenses of 20.000 EUR per year in the years 2013 to 2017.

Machine leasing: You should pay attention to this

1. Tax advisors Avoid going it alone with high investment sums at all costs. When clarifying the question "Buy or lease?" So consult your tax advisor. 2. Take your time. Do not make any hasty decisions. Obtain offers from at least three leasing companies. In addition to the terms and conditions, compare the provisions in the fine print. 3. Insurance For leased machines, you must of course take out insurance against damage, destruction or theft. Compare also here the offer of different leasing companies. 4. Contractual content Before concluding the leasing contract, obtain a written assurance that the leased asset is still attributable to the leasing company and not to you for tax purposes. This allows you to book all leasing installments as operating expenses.

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