October 2025 update on the regulation of financial leases in Germany

At the beginning of 2025, we reported on significant changes in the area of finance leasing in Germany. Before the year ends, there are further developments that leasing companies need to be aware of.

BaFin supervisory notice on financial leases

On October 13, 2025, BaFin published a supervisory notice on financial leases that reveals a significant development: the adjustment made in December 2024 to the assessment of what constitutes actual-imputed amortisation (faktisch-kalkulatorische Amortisation) has been quietly withdrawn. In its current supervisory notice, BaFin refers exclusively to the stricter regulatory position set out in its May 2021 guidance note. Below, we briefly outline the development and explain the practical consequences.

Context

In its May 2021 guidance note on financial leases, BaFin (continuing its administrative practice from its previous guidance note on financial leases from January 2009) classified leases with actual-imputed amortisation as financial leases. BaFin clarified that actual-imputed amortisation does not require a formal residual value guarantee from the lessee if the lessee has covered a significant portion of the lessor's costs through the lease payments and the amortisation gap can be closed through sale (without further leasing).

This position made it possible for lease agreements without a fixed residual value to also be classified as financial leases requiring approval, provided that there was a liquid secondary market for the leased asset.

In December 2024, BaFin made a minor adjustment to its guidance note on financial leases (we reported here). BaFin now assumed that a “residual value to be offset (as a figure) must be specified” in order for the investment risk to effectively lie with the lessee. Only then would the contract be considered a financial lease.

This amendment represented a significant change in the form of a restriction on the licensing requirement for leasing agreements: whereas according to the position taken in the guidance note dated May 2021, the proceeds from a possible sale covering the amortisation gap were sufficient, the December 2024 version required a specific residual value figure to be specified in the agreement.

After the change, however, the question arose as to whether the actual-imputed amortisation still constituted a separate basic type of amortisation and how it could still be distinguished from partial amortisation if a residual value was guaranteed in both cases. BaFin has since removed the guidance note on financial leases from its website and announced in its supervisory notice of October 2025 that it is sticking to the position taken in the May 2021 guidance note. The reason for this return to the May 2021 position is that the German government is planning to introduce a clarifying legal provision. As part of the Banking Directive Implementation and Bureaucracy Relief Act (BRUBEG), the licnece requirement of Section 1 (1a) sentence 2 no. 10 KWG is to be expressly confirmed by law for mileage leasing without a residual value guarantee (see below under “Outlook: BRUBEG”).

In its guidance note of October 2025, BaFin clarifies that, in order to avoid legal uncertainty, it will continue to apply the administrative practice described in its leaflet of May 2021 during the ongoing legislative process for BRUBEG, according to which for actual-imputed amortisation, it is sufficient that a possible sale closes the amortisation gap and that such leasing agreements are therefore subject to a reservation of permission.

It is noteworthy that BaFin refers exclusively to the May 2021 guidance note and does not mention the December 2024 amendment at all. In addition, the guidance note on financial leases has been removed from the BaFin website, suggesting that the amendment has been quietly withdrawn.

What applies now?

In its administrative practice, BaFin is now (once again) using the definition from May 2021 (see above). This means that contracts for mileage leasing in particular are classified as financial leases.

In contrast to the short-lived December 2024 position, a fixed residual value guarantee in the contract is no longer a prerequisite for classification as actual-imputed amortisation. It is sufficient that the realisation of the leased asset at the end of the term is realistically possible.

The challenge remains that, especially for goods without a liquid secondary market, the exclusion of actual-imputed amortisation is obvious, as the necessary realisation cannot be reliably accomplished in these cases. The problem is that there are no clearly defined criteria that can be used to objectively determine the liquidity of a secondary market. Instead, the assessment is always dependent on the individual case. Even the market for used vehicles (which forms the basis for the assessment in so-called mileage leasing) has been very volatile in recent years due to the different legal frameworks for the various drive technologies, so that the question could also arise in this market as to whether it can still be considered a liquid and predictable secondary market.

Outlook: BRUBEG

Practical implications

The German federal government is currently working on the Banking Directive Implementation and Bureaucracy Relief Act (BRUBEG), which is intended to implement CRD VI (Directive (EU) 2024/1619), among other things. Some of the amendments proposed in the ministry’s draft bill also related to leasing institutions, but did not address the question of what should be classified as financial leasing.

However, the government draft provides for further changes with regard to financial leases. One of the changes is an adjustment to the conditions for the authorisation of financial leases in Section 1 (1a) sentence 2 no. 10 KWG. The planned revision of Section 1 (1a) sentence 2 no. 10 KWG is intended to expressly clarify that financial leases also cover “contracts that secure the financing of essential parts of the value chain.” The explanatory memorandum to the law states that mileage leasing without a residual value guarantee is to be treated in the same way as other forms of financial leasing, which is in line with the legislative concept when the provision was introduced in 2009.

In addition, the BRUBEG introduces further changes for leasing institutions. For example, leasing institutions may no longer operate in the legal form of a sole proprietorship. This is a consequence of the obligation introduced on January 1, 2024, that leasing institutions must appoint two responsible managers (which is not possible in the case of a sole proprietorship).

Furthermore, the BRUBEG introduces special obligations for institutions with regard to environmental, social, and corporate governance risks. Certain reliefs are to apply to leasing institutions.

The government draft of the BRUBEG was approved by the cabinet on 8 October 2025 and afterwards submitted to the Bundesrat.

The legislative process is currently in the phase following the cabinet decision. After the Bundesrat has issued its opinion, the draft will be forwarded to the Bundestag for deliberation. The key provisions for implementing the EU Banking Directive CRD VI are scheduled to enter into force on January 11, 2026.

Developments in recent months show that the distinction between actual and imputed amortisation continues to be associated with legal uncertainties. In addition, leasing institutions must keep an eye on the BRUBEG legislative process.

The following recommendations for action arise in practice:

Short term – lessors can again refer to the May 2021 guidance note. A fixed residual value figure in the contract is not absolutely necessary for it to be classified as actual-imputed amortisation (and thus as a financial lease requiring approval).

Medium term – The development of the BRUBEG should be closely monitored. It is conceivable that the legislator will codify the current position, but there is also the possibility of a change.

For lessors who only want to provide a simple transfer of use (and not a financial lease requiring approval), it is advisable to develop a coherent argument as to why there is no liquid secondary market in the respective case in order to protect themselves against possible classification as a financial lease.

In addition, the obligations of the BRUBEG with regard to ESG must be observed.

With the kind support of Elias Karmoussi – student assistant