ABSTRACT
This chapter identifies the development of leasing in the transitional economies and its financial function to the economic reforms. Leasing itself is undergoing a period of transition where many new laws and regulations have been passed to promote leasing as a valuable financing tool for companies in these countries which want to modem their outdated equipment. The leasing industry has since continued to grow in line with the overall development of the Chinese economy. The impact of the economic transition is remarkably obvious and farreaching. Apparently, the economic transition from a centrally-planned to a system of market economy must be undertaken against a background of sever economic, social and political problems. The most important taxation issue in dealing with leasing is the distinction between operating and financial leases. Ownership of a leased asset has to be passed to the lessee in a financial lease, according to the Czech taxation law.
