A loan granted to an employee by the employer for a specific purpose. In most cases, this is aid related to the creation of housing for the employee. In order to rule out a disguised salary increase in this context, the tax authorities almost always require the difference between the bank’s market interest rate and that of the employer to be taxed as – in the language of tax law – a „non-cash benefit“ (pecuniary advantage). The German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) has so far not regarded the granting of corresponding loans as the conduct of lending business requiring a license within the meaning of Section 1 (2) sentence 2 no. 2 of the German Banking Act (Kreditwesengesetz, KWG). – In some German states (e.g., Prussia by law of June 7, 1922), public servants were entitled to corresponding loans „to reduce the overpricing of construction costs“ under conditions regulated by law. – See Abzahlungshilfen, Baukosten-Zuschuss, Bauzinsen, Frings Benefits.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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