VAT rebate for software transactions
At the beginning of 2008, the Federal Law of 19.07.2007 N 195- was vigorously discussed, by which the Tax Code (NK) was amended to provide VAT exemption in the exercise of rights to computer programs and the database. Three years have passed, the Ministry of Finance expressed its opinion on the procedure for applying benefits, developers and distributors arranged contractual schemes for them, and passions subsided. However, the time has come for tax audits for the period from 2008, when the industry adopted VAT evasion schemes will come under close attention of the tax authorities. Will they stand in the courts? Let's try to figure it out.
Let's start with the essence of the amendment. The law establishes that VAT is not subject to taxation (exempted from taxation) implementation (as well as transfer, performance, rendering for own needs) in the territory of the Russian Federation exclusive rights to programs for electronic computers, databases, as well as rights to use the specified intellectual property on the basis of a license agreement. At first glance, it would not seem like a tricky formulation, but how fully does it fall on real schemes for creating and distributing software?
In the first approximation, we see that the privilege applies at least to agreements on the alienation of exclusive rights (Art. 1285 of the Civil Code (GC)) and licensing agreements (Art. 1285 GK). The difference between these types of contracts is as follows. Under an agreement on the alienation of an exclusive right to a computer program or database, the author or other rightholder shall transfer or undertake to transfer the exclusive right to a work to him in full to the acquirer of such right. The conclusion of a license agreement does not entail the transfer of the exclusive right to the licensee, but involves the grant of the right holder to use a computer program or database within the limits established by the agreement.
And then everything becomes not so simple. First, the transfer of exclusive rights to computer programs and databases is also not limited to those specified in Art. 1233 GK agreement on the alienation of the exclusive right and the license agreement. In addition, the transfer and / or granting the right to use the exclusive right to computer programs and databases is possible under the following types of contracts:
• contract of author's order (Article 1288 of the Civil Code);
• contract for the creation of computer programs and databases (art. 1296 GK);
• contract agreement, under which the software was created as a side effect (Article 1297 of the Civil Code of the Russian Federation);
• state or municipal contract (Article 1298 of the Civil Code);
• agreement of commercial concession (Article 1027 of the Civil Code).
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Does VAT exemption apply to them? Indeed, despite the special subject in the above agreements, the transfer or granting of an exclusive right to software on them comes down to the well-known model of the transfer of rights in full or a license.
Secondly, the right to use the software obtained under a license agreement may be transferred by the licensee further with the written consent of the licensor on the basis of a sublicensing agreement. In this case, on the basis of the law, the rules on the license agreement are applied to the sublicensing agreement. Does this mean that the rule for exemption from VAT, valid for a license contract, also applies in the case of the exercise of rights under a sublicensing contract?
And thirdly, the transfer of software or rights to it (as you like), as a rule, is accompanied by the provision of additional services (works) for technical support and maintenance, and for complex software, services for its installation, debugging and implementation can also be provided. How to deal with the implementation of related services? Do I need to allocate their cost from the contract price and charge VAT?
To begin, I propose to deal with the primary ways of acquiring rights to software during its development.
Unfortunately, in the discussed rate on VAT exemption there is a direct reference to only one type of contract to which it applies. Granting rights under a license agreement, as they say, is “beyond suspicion”. And what about the rest, and first of all those agreements on the basis of which exclusive rights arise? Alas, in the article they are not directly named, and therefore we risk a refusal to apply the benefits if we do not convince the tax authority that it is unjustified with weighty references to civil law.
We believe that no one should have any doubts (even a tax one) regarding the possibility of using the exemption when executing under an alienation agreement of exclusive rights, since this type of agreement is directly specified in the Civil Code as the main contractual structure for transferring exclusive rights to software. At the same time, this agreement is not the only basis for the transfer of exclusive rights to the new owner.
So on the basis of paragraph 2 of article 1288 of the Civil Code. an author's contract may provide for the alienation of the exclusive right to the customer for the software to be created by the author, or the provision of the client with the right to use this software within the limits established by the contract In the first case, the law establishes the application of the rules on the contract of alienation of the exclusive right to such contract, and the second is a license agreement. Thus, it is possible to reasonably consider it necessary to apply VAT exemption in case of obtaining rights to computer programs and a database under the author's contract of order.
The situation is quite rare, because the contract of the author's order assumes that the performer on it is an individual (the author). Therefore, the origin of the obligation of the author to pay VAT can, in principle, be discussed only if he carries out his activity as an entrepreneur. In this case, an entrepreneur usually uses a simplified tax regime. But anything can happen, but from the song, as they say, you cannot throw out the words.
More interesting is the situation with the contract for the creation of software, which is the most frequently used type of development contract.
When a computer program or database is created under a contract, the subject of which was its creation (by order), the exclusive right to such a program or such database belongs to the customer, unless otherwise provided by the contract between the contractor (performer) and the customer ).
In this case, the legislator, in order to further protect the customer of software development, as in the case of creating a service work, established the presumption of ownership of exclusive rights to the work to the customer.
From this provision, the tax authorities conclude that, within the framework of this contract, the transfer of exclusive rights is not exercised, as the customer has exclusive rights to the software developed under the contract by law (see Letter of the RF Ministry of Finance dated January 22, 2008 N 03-07 -11/23, Letter of the Ministry of Finance of the Russian Federation of 01.04.2008 N 03-07-15 / 44, Letter of the Federal Tax Service Directorate in Moscow dated August 11, 2008 N 19-11 / 75222).
However, this position is not perfect. Firstly, in NK there is no indication of a specific type of agreement on the transfer of an exclusive right to computer programs and a database for which a benefit can be applied. Secondly, the conclusion about the impossibility of transferring exclusive rights to software under a contract agreement is questionable.
In the development of the second thesis, we can refer to the fact that, in terms of the subject matter, the contract for the development of programs and databases does not differ from the contract of the author's order. The distinction is made again only by subject composition: the legal entity acts as the contractor (art. 1296 GK), and a natural person in the author's contract (art. 1288 G) is a natural person. At the same time, the article on the contract of authoring order refers to the application to it of the provisions of the contract on the alienation of the exclusive right or license agreement, whereas article 1296 of the Civil Code explicitly states that the customer’s rights belong to the customer if the contract between the contractor (performer) and the customer does not provide otherwise. However, the establishment of the presumption of ownership of rights to the customer does not mean the emergence of his exclusive right from the moment of creating the ordered software without transfer from the contractor (contractor).
The copyright of the work in full initially belongs to its author. Thus, an organization acting as a contractor under the contract, the subject of which was its creation (by order), must first obtain such rights from the author under the author's order contract or on the basis of the provisions of the law on official work. Thus, the exclusive rights to the software can not arise from the customer without their transfer from the author and the contractor.
Similarly, the issue can be resolved under the contract, by which the creation of software for the customer was not provided when the parties provided for the transfer of such right to the customer.
However, due to the lack of law enforcement practice on this issue, in order to minimize tax risks, it is only recommended to create exclusive rights to them when creating programs and databases on the basis of a separate agreement on the alienation of exclusive rights. The above rules of law and the principle of freedom of contract do not prevent the parties from concluding a contract providing for the financing of work on creating software with the subsequent transfer of exclusive rights to them to the customer for a separate fee.
At this point I finish the first part of the article. Further, if the public is interested, the application of VAT will be considered:
• when transferring rights through a chain of sub-license agreements;
• under contracts for the sale of boxed software and as part of OEM products;
• for additional support services and software technical support;
• as well as foreign trade transactions.
Let's start with the essence of the amendment. The law establishes that VAT is not subject to taxation (exempted from taxation) implementation (as well as transfer, performance, rendering for own needs) in the territory of the Russian Federation exclusive rights to programs for electronic computers, databases, as well as rights to use the specified intellectual property on the basis of a license agreement. At first glance, it would not seem like a tricky formulation, but how fully does it fall on real schemes for creating and distributing software?
In the first approximation, we see that the privilege applies at least to agreements on the alienation of exclusive rights (Art. 1285 of the Civil Code (GC)) and licensing agreements (Art. 1285 GK). The difference between these types of contracts is as follows. Under an agreement on the alienation of an exclusive right to a computer program or database, the author or other rightholder shall transfer or undertake to transfer the exclusive right to a work to him in full to the acquirer of such right. The conclusion of a license agreement does not entail the transfer of the exclusive right to the licensee, but involves the grant of the right holder to use a computer program or database within the limits established by the agreement.
And then everything becomes not so simple. First, the transfer of exclusive rights to computer programs and databases is also not limited to those specified in Art. 1233 GK agreement on the alienation of the exclusive right and the license agreement. In addition, the transfer and / or granting the right to use the exclusive right to computer programs and databases is possible under the following types of contracts:
• contract of author's order (Article 1288 of the Civil Code);
• contract for the creation of computer programs and databases (art. 1296 GK);
• contract agreement, under which the software was created as a side effect (Article 1297 of the Civil Code of the Russian Federation);
• state or municipal contract (Article 1298 of the Civil Code);
• agreement of commercial concession (Article 1027 of the Civil Code).
')
Does VAT exemption apply to them? Indeed, despite the special subject in the above agreements, the transfer or granting of an exclusive right to software on them comes down to the well-known model of the transfer of rights in full or a license.
Secondly, the right to use the software obtained under a license agreement may be transferred by the licensee further with the written consent of the licensor on the basis of a sublicensing agreement. In this case, on the basis of the law, the rules on the license agreement are applied to the sublicensing agreement. Does this mean that the rule for exemption from VAT, valid for a license contract, also applies in the case of the exercise of rights under a sublicensing contract?
And thirdly, the transfer of software or rights to it (as you like), as a rule, is accompanied by the provision of additional services (works) for technical support and maintenance, and for complex software, services for its installation, debugging and implementation can also be provided. How to deal with the implementation of related services? Do I need to allocate their cost from the contract price and charge VAT?
To begin, I propose to deal with the primary ways of acquiring rights to software during its development.
VAT on contracts for the creation of computer programs and databases
Unfortunately, in the discussed rate on VAT exemption there is a direct reference to only one type of contract to which it applies. Granting rights under a license agreement, as they say, is “beyond suspicion”. And what about the rest, and first of all those agreements on the basis of which exclusive rights arise? Alas, in the article they are not directly named, and therefore we risk a refusal to apply the benefits if we do not convince the tax authority that it is unjustified with weighty references to civil law.
We believe that no one should have any doubts (even a tax one) regarding the possibility of using the exemption when executing under an alienation agreement of exclusive rights, since this type of agreement is directly specified in the Civil Code as the main contractual structure for transferring exclusive rights to software. At the same time, this agreement is not the only basis for the transfer of exclusive rights to the new owner.
So on the basis of paragraph 2 of article 1288 of the Civil Code. an author's contract may provide for the alienation of the exclusive right to the customer for the software to be created by the author, or the provision of the client with the right to use this software within the limits established by the contract In the first case, the law establishes the application of the rules on the contract of alienation of the exclusive right to such contract, and the second is a license agreement. Thus, it is possible to reasonably consider it necessary to apply VAT exemption in case of obtaining rights to computer programs and a database under the author's contract of order.
The situation is quite rare, because the contract of the author's order assumes that the performer on it is an individual (the author). Therefore, the origin of the obligation of the author to pay VAT can, in principle, be discussed only if he carries out his activity as an entrepreneur. In this case, an entrepreneur usually uses a simplified tax regime. But anything can happen, but from the song, as they say, you cannot throw out the words.
More interesting is the situation with the contract for the creation of software, which is the most frequently used type of development contract.
When a computer program or database is created under a contract, the subject of which was its creation (by order), the exclusive right to such a program or such database belongs to the customer, unless otherwise provided by the contract between the contractor (performer) and the customer ).
In this case, the legislator, in order to further protect the customer of software development, as in the case of creating a service work, established the presumption of ownership of exclusive rights to the work to the customer.
From this provision, the tax authorities conclude that, within the framework of this contract, the transfer of exclusive rights is not exercised, as the customer has exclusive rights to the software developed under the contract by law (see Letter of the RF Ministry of Finance dated January 22, 2008 N 03-07 -11/23, Letter of the Ministry of Finance of the Russian Federation of 01.04.2008 N 03-07-15 / 44, Letter of the Federal Tax Service Directorate in Moscow dated August 11, 2008 N 19-11 / 75222).
However, this position is not perfect. Firstly, in NK there is no indication of a specific type of agreement on the transfer of an exclusive right to computer programs and a database for which a benefit can be applied. Secondly, the conclusion about the impossibility of transferring exclusive rights to software under a contract agreement is questionable.
In the development of the second thesis, we can refer to the fact that, in terms of the subject matter, the contract for the development of programs and databases does not differ from the contract of the author's order. The distinction is made again only by subject composition: the legal entity acts as the contractor (art. 1296 GK), and a natural person in the author's contract (art. 1288 G) is a natural person. At the same time, the article on the contract of authoring order refers to the application to it of the provisions of the contract on the alienation of the exclusive right or license agreement, whereas article 1296 of the Civil Code explicitly states that the customer’s rights belong to the customer if the contract between the contractor (performer) and the customer does not provide otherwise. However, the establishment of the presumption of ownership of rights to the customer does not mean the emergence of his exclusive right from the moment of creating the ordered software without transfer from the contractor (contractor).
The copyright of the work in full initially belongs to its author. Thus, an organization acting as a contractor under the contract, the subject of which was its creation (by order), must first obtain such rights from the author under the author's order contract or on the basis of the provisions of the law on official work. Thus, the exclusive rights to the software can not arise from the customer without their transfer from the author and the contractor.
Similarly, the issue can be resolved under the contract, by which the creation of software for the customer was not provided when the parties provided for the transfer of such right to the customer.
However, due to the lack of law enforcement practice on this issue, in order to minimize tax risks, it is only recommended to create exclusive rights to them when creating programs and databases on the basis of a separate agreement on the alienation of exclusive rights. The above rules of law and the principle of freedom of contract do not prevent the parties from concluding a contract providing for the financing of work on creating software with the subsequent transfer of exclusive rights to them to the customer for a separate fee.
At this point I finish the first part of the article. Further, if the public is interested, the application of VAT will be considered:
• when transferring rights through a chain of sub-license agreements;
• under contracts for the sale of boxed software and as part of OEM products;
• for additional support services and software technical support;
• as well as foreign trade transactions.
Source: https://habr.com/ru/post/284612/
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