SAP hire purchase: buy SAP Business One in installments
Hire purchase combines installments with ownership: you pay for SAP Business One in fixed installments, depreciate the software yourself from the start, and own it after the last payment. Read how it works and how hire purchase differs from leasing.
As of: 6 November 2026
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The short answer
With SAP hire purchase, you pay for SAP Business One in fixed installments but are the beneficial owner from the start: you capitalize the software and depreciate it yourself. The financier remains the legal owner until the last installment; ownership then passes to you automatically. Under German VAT law, VAT on the full purchase price is due at the start.
How hire purchase works
Hire purchase is an installment purchase through a financier. The financier pays for licenses and agreed services, and you pay fixed installments over the term. Unlike leasing, you are treated for tax and accounting purposes as if you had bought the software yourself.
- Beneficial ownership is yours from the start. You capitalize SAP Business One on your balance sheet and show the remaining debt as a liability.
- Legal ownership stays with the financier as security until the last installment is paid. It then passes to you without any further payment.
- Depreciation is done by you. For German tax purposes, you may apply a useful life of one year to software, explicitly including ERP software (Federal Ministry of Finance letter of 22 February 2022).
- The interest portion of the installments is booked as an expense.
VAT with hire purchase
Under German VAT law, hire purchase counts as a delivery. VAT on the full purchase price therefore arises at the start, not with each installment. If you are entitled to deduct input tax, you can claim it accordingly early. Companies without input tax deduction can include the VAT in the installments, depending on the financier.
Hire purchase or leasing?
| Feature | Hire purchase | Leasing |
|---|---|---|
| Balance sheet | capitalized by you | with the lessor if the contract follows the German leasing decrees |
| Depreciation | by you | by the lessor |
| Installments | repayment and interest; only interest is an expense | fully an operating expense |
| VAT | on the total amount at the start | with each installment |
| End of term | ownership passes to you automatically | return, extension or takeover per contract |
Hire purchase suits you if you plan to use SAP Business One for the long term and want ownership and your own depreciation, but would like to spread the payment. Read more about leasing on the page SAP leasing.
Advantages and limits
- You spread the investment over the term with fixed installments and agree the term and payment profile with the financier.
- You use the depreciation yourself and become the owner with the last installment, without negotiating a residual value.
- Depending on the contract, special payments that shorten the term are possible.
- Total costs are higher than a cash purchase because interest is charged.
- The remaining debt appears as a liability on your balance sheet and affects key figures such as the equity ratio.
Other financing models
Compare this model with the other ways to pay for SAP Business One.
- Models comparedPurchase, loan, leasing, hire purchase and rental in one table: ownership, balance sheet, taxes and liquidity.Read more about Models compared
- LeasingUse it for fixed installments without tying up capital. What to agree on term and lease end.Read more about Leasing
- Rental (cloud)SAP Business One as a cloud subscription from €38 per user and month, formerly known as ASP.Read more about Rental (cloud)
- Summary and checklistThe key points at a glance and ten questions to settle before you sign.Read more about Summary and checklist
Frequently asked questions
What is hire purchase for software?
An installment purchase through a financier: you pay for the software in fixed installments, are the beneficial owner from the start and become the legal owner with the last installment.
Can I depreciate SAP Business One with hire purchase?
Yes. With hire purchase, you capitalize the software and depreciate it yourself. For German tax purposes, you may apply a useful life of one year to ERP software (Federal Ministry of Finance letter of 22 February 2022).
When do I pay VAT with hire purchase?
At the start, on the full purchase price, because hire purchase counts as a delivery under German VAT law. Companies entitled to deduct input tax claim it as input tax accordingly early.
What is the difference between hire purchase and leasing?
With hire purchase, you are the beneficial owner, capitalize and depreciate, and ownership passes to you with the last installment. With leasing, the lessor remains the owner and you book the installments as operating expenses.
Editorial team: init consulting AG, SAP Business One Gold Partner headquartered in Kösching near Ingolstadt, Germany, founded in 1999. Last reviewed on 6 November 2026. This page does not replace tax or legal advice.
