Dear Treasurers, is your company subject to the #InterestBarrier?
Yes? Then #ValueCreation is straightforward: Use #Leasing!
I frequently speak with tax advisors and law firms specializing in financing matters.
One topic whose lack of awareness no one has been able to explain to me so far is the interest barrier rule, which prevents companies with large financing arrangements (those below the threshold of EUR 3.0 million net interest expense per year are exempt) from fully deducting their total interest burden for tax purposes.
A note for LBOs: interest on shareholder loans (including deferred interest) as well as all PIK instruments count toward this limit!
The impact: For these companies, supplementary financing — i.e., financing taken on in addition to the core components of corporate financing (syndicated loans, unitranches, Schuldscheindarlehen, bonds, etc.) — becomes very expensive!
This applies with only a few exceptions.
Almost even less known than the interest barrier itself is the obvious solution: Leasing!
Increase your share of leasing and reduce your cost of debt!
Take advantage of the opportunities that the Leasing Basket provides!
Let's talk!
#Treasury #CFO #LBO #PrivateEquity
Dear Treasurers, is your company subject to the #InterestBarrier?
