VAT exemption for software transactions (part 2)
In the first part of the article, we discussed general issues of exempting software transactions from the VAT, and also examined in detail the tax implications of concluding separate contracts for creating software and transferring exclusive rights to it to third parties.
Now I propose to dwell on the problems of applying VAT exemption when distributing programs and databases on licensing agreements and sales contracts that raise a lot of questions from software distributors.
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New software distribution scheme, as a rule, is based on concluding a chain of sublicensing contracts. However, many market participants continue to fear the tax consequences of such transactions. According to many consultants, the use by the taxpayer of privileges under sublicense contracts in the future may entail additional VAT and tax penalties from fines.
However, despite the fact that the Tax Code of the Russian Federation (NC RF) contains a direct reference to the exemption from VAT of granting the right to use programs and databases only under a licensing agreement, we believe it is possible to use this privilege in the case of granting rights to software under a sublicensing agreement .
As a justification of this position, we can refer to the following. These contracts have the same subject - the right to use computer programs and databases for a term. Contracts are distinguished according to subject composition: in the licensing agreement on the side of the licensor, the author or other rightholder acts (that is, the owner of exclusive rights), and in a sublicensing agreement, the person who previously was granted the right to use the software acts as a licensor.
In our opinion, the VAT exemption is not limited to granting preferences to developers when introducing rights to software into civilian circulation under a license agreement. The copyright holder of the exclusive rights to programs or databases can be any person who is not the author, and received such rights by way of alienation, under a contract to create software, or in another manner established by law. Thus, the Federal Law of 19.07.2007 N 195-FZ puts the authors on an equal footing with other rightholders. Therefore, in the same way, it would be wrong to put the owners of derivative rights (licensees) with the owners of secondary rights (rightholders who are not developers) in unequal taxation terms. That is, the provisions under discussion are not related to the establishment of a special tax status of the author or rightholder acting as a licensor under a licensing agreement, but are aimed at introducing a preferential tax regime for operations granting the right to use special innovative objects - computer programs and databases.
The position on the admissibility of applying the provisions of the Federal Law of 19.07.2007 N 195- when transferring rights to software carried out by the licensee on the basis of a sublicensing agreement has also been repeatedly confirmed in letters of the RF Ministry of Finance (see Letter of the RF Ministry of Finance dated December 25, 2007 N 03-07 -11/640, Letter of the Ministry of Finance of the Russian Federation of January 30, 2008 N 03-07-07 / 06, Letter of the Ministry of Finance of the Russian Federation of February 21, 2008 N 03-07-08 / 36, Letter of the Ministry of Finance of the Russian Federation of April 1, 2008 N 03 -07-15 / 44, Letter of the Ministry of Finance 02.11.2009 N 03-07 / 280, 09.11.2009 N 03-07-11 / 287).
Strictly speaking, the sale of a copy of a computer program or database on a tangible medium is not accompanied by the granting of rights to use it.
On the basis of Article 1280 of the Civil Code of the Russian Federation, a person legally owning a copy of a computer program or a copy of a database (user) is entitled, without permission of the author or other copyright holder and without paying additional remuneration, to perform the actions necessary for the functioning of such a program or database in accordance with their purpose, including recording and storing in the computer memory (one computer or one network user). Thus, the user does not need a software license for its installation and functional use.
However, prior to the use of programs and databases, the user, as a rule, is invited to join the license agreement of the copyright holder. On the basis of paragraph 3 of article 1286 of the Civil Code of the Russian Federation, it is expressly permitted to enter into license agreements on granting the right to use a computer program or database by entering into an agreement of accession by each user, the terms of which are set out on the purchased copy of such program or database or on the packaging of this instance. The commencement of the use of such a program or database by the user, as determined by these conditions, signifies his consent to conclude a contract.
At the same time, a copy of such software, as indicated above, prior to the conclusion of a licensing agreement could be sold to a user under a contract of sale of its tangible medium. Those. the sale of a copy under a sales contract precedes the exercise of rights under a license agreement. In this case, wrapping licenses usually do not contain conditions for remuneration, in connection with which they, in principle, do not comply with the requirements of the law on licensing agreement, since on the basis of the absence in the paid license agreement of the condition on the amount of remuneration or the procedure for determining it, the agreement shall be deemed not concluded.
In connection with the absence of transfer of rights to the software in these cases, the VAT exemption introduced by the Federal Law of 19.07.2007 N 195- is not applicable.
The Ministry of Finance of the Russian Federation shares the position that operations on the transfer of rights to use the software when selling their copies on carriers in commercial packaging containing the terms of the license agreement (packaging license) are subject to VAT. However, the Ministry of Finance of the Russian Federation makes one significant reservation, according to which VAT is charged if, at the time of such implementation, a licensing agreement is not in writing (see Letter of the Ministry of Finance of the Russian Federation of December 29, 2007 N 03-07-11 / 648, Letter of the Ministry of Finance of the Russian Federation of February 21, 2008 N 03-07-08 / 36, Letter of the Ministry of Finance of the Russian Federation of 01.04.2008 N 03-07-15 / 44).
Thus, the Ministry of Finance of the Russian Federation leaves open the possibility of applying VAT exemption when transferring software on tangible media with proper registration of contractual relations. In a letter dated December 29, 2007 N 03-07-11 / 648 it is explicitly stated that when an organization carries out distribution activities for software products through a network of resellers (dealers, distributors) with the transfer of non-exclusive rights from the producer organization through a chain of intermediaries to the final on the basis of the licensing agreements concluded by them, then in accordance with Federal Law of 19.07.2007 N 195-FZ, such operations are not subject to value added tax.
Similarly, the issue can be resolved in the case of the delivery of software as part of the software and hardware complex on OEM terms. In this case, the software actually pre-installed on the computer is purchased and, in the absence of a separate license agreement for its use, the application of VAT exemption is unreasonable. However, the supply of equipment with installed software may be accompanied by the conclusion of a license agreement, the remuneration for which will not be subject to VAT.
When providing copies of software under a license agreement on tangible media in product packaging, the issue of exempting them from VAT should also be positively resolved. The transfer of the material carrier to the licensee is carried out in the order of fulfillment of obligations under the license agreement, therefore there is no need to separate their cost from the license remuneration and to charge VAT on it.
As the RF Ministry of Finance rightly points out in a letter of 01.04.2008 N 03-07-15 / 44, these operations are exempt from taxation regardless of the method of transferring computer programs and databases. Therefore, if the transfer of these rights provides material carriers in which the results of intellectual activity are expressed, as well as documentation, technical means of protection and other accessories in packaging containers necessary for the effective use of the results of intellectual activity, the transfer of such material carriers and accessories is exempt from tax value added, provided that their value is taken into account in the value of the rights transferred by license (subli enzionnym) contracts. At the same time, the amount of value added tax imposed by suppliers, including tangible media, documentation, technical means of protection and other supplies used in the transfer of rights to use the results of intellectual activity that are not taxable, in accordance with paragraphs. 1 p. 2 Art. 170 NC are taken into account in the cost of the relevant goods (works, services) and are not deductible.
At the same time, we would like to draw attention to the fact that in the case of applying VAT exemption on transactions with boxed software and OEM products, it is necessary to take into account high tax risks due to possible re-qualification of transactions for the following reasons.
The transfer of rights "by chain" is built on the sublicensing scheme. Under the law, the licensee cannot transfer more rights to the sublicensee than he himself received under a license agreement. Thus, in order to grant the sublicensee the rights to use the programs, the licensee needs to acquire such rights that he, in principle, is not required to implement the programs. In the case of distribution of boxed software, its copy has already been put into civil circulation by replicating on tangible media and selling them by the first seller. Consequently, the right to reproduce and distribute copies has already been used. The right of reproduction (installation) and the functional application of the sold software to the distributor is not required, since its goal is the subsequent implementation, rather than extraction of useful properties of such software. The end user also does not need them due to the provisions of the earlier provisions of article 1280 of the Civil Code of the Russian Federation.
The situation is the same with OEM products: the terms of the license agreement are accepted by the installer of the software, then such software is transferred as part of the equipment and does not require the end user to re-enter the license agreement.
Thus, sublicensing contracts for the provision of rights for boxed software and OEM products can be recognized as sham transactions aimed at obtaining tax benefits from the use of VAT benefits.
Now I propose to dwell on the problems of applying VAT exemption when distributing programs and databases on licensing agreements and sales contracts that raise a lot of questions from software distributors.
VAT on sublicensing contracts
')
New software distribution scheme, as a rule, is based on concluding a chain of sublicensing contracts. However, many market participants continue to fear the tax consequences of such transactions. According to many consultants, the use by the taxpayer of privileges under sublicense contracts in the future may entail additional VAT and tax penalties from fines.
However, despite the fact that the Tax Code of the Russian Federation (NC RF) contains a direct reference to the exemption from VAT of granting the right to use programs and databases only under a licensing agreement, we believe it is possible to use this privilege in the case of granting rights to software under a sublicensing agreement .
As a justification of this position, we can refer to the following. These contracts have the same subject - the right to use computer programs and databases for a term. Contracts are distinguished according to subject composition: in the licensing agreement on the side of the licensor, the author or other rightholder acts (that is, the owner of exclusive rights), and in a sublicensing agreement, the person who previously was granted the right to use the software acts as a licensor.
In our opinion, the VAT exemption is not limited to granting preferences to developers when introducing rights to software into civilian circulation under a license agreement. The copyright holder of the exclusive rights to programs or databases can be any person who is not the author, and received such rights by way of alienation, under a contract to create software, or in another manner established by law. Thus, the Federal Law of 19.07.2007 N 195-FZ puts the authors on an equal footing with other rightholders. Therefore, in the same way, it would be wrong to put the owners of derivative rights (licensees) with the owners of secondary rights (rightholders who are not developers) in unequal taxation terms. That is, the provisions under discussion are not related to the establishment of a special tax status of the author or rightholder acting as a licensor under a licensing agreement, but are aimed at introducing a preferential tax regime for operations granting the right to use special innovative objects - computer programs and databases.
The position on the admissibility of applying the provisions of the Federal Law of 19.07.2007 N 195- when transferring rights to software carried out by the licensee on the basis of a sublicensing agreement has also been repeatedly confirmed in letters of the RF Ministry of Finance (see Letter of the RF Ministry of Finance dated December 25, 2007 N 03-07 -11/640, Letter of the Ministry of Finance of the Russian Federation of January 30, 2008 N 03-07-07 / 06, Letter of the Ministry of Finance of the Russian Federation of February 21, 2008 N 03-07-08 / 36, Letter of the Ministry of Finance of the Russian Federation of April 1, 2008 N 03 -07-15 / 44, Letter of the Ministry of Finance 02.11.2009 N 03-07 / 280, 09.11.2009 N 03-07-11 / 287).
VAT on software sales contracts (box software and OEM products)
Strictly speaking, the sale of a copy of a computer program or database on a tangible medium is not accompanied by the granting of rights to use it.
On the basis of Article 1280 of the Civil Code of the Russian Federation, a person legally owning a copy of a computer program or a copy of a database (user) is entitled, without permission of the author or other copyright holder and without paying additional remuneration, to perform the actions necessary for the functioning of such a program or database in accordance with their purpose, including recording and storing in the computer memory (one computer or one network user). Thus, the user does not need a software license for its installation and functional use.
However, prior to the use of programs and databases, the user, as a rule, is invited to join the license agreement of the copyright holder. On the basis of paragraph 3 of article 1286 of the Civil Code of the Russian Federation, it is expressly permitted to enter into license agreements on granting the right to use a computer program or database by entering into an agreement of accession by each user, the terms of which are set out on the purchased copy of such program or database or on the packaging of this instance. The commencement of the use of such a program or database by the user, as determined by these conditions, signifies his consent to conclude a contract.
At the same time, a copy of such software, as indicated above, prior to the conclusion of a licensing agreement could be sold to a user under a contract of sale of its tangible medium. Those. the sale of a copy under a sales contract precedes the exercise of rights under a license agreement. In this case, wrapping licenses usually do not contain conditions for remuneration, in connection with which they, in principle, do not comply with the requirements of the law on licensing agreement, since on the basis of the absence in the paid license agreement of the condition on the amount of remuneration or the procedure for determining it, the agreement shall be deemed not concluded.
In connection with the absence of transfer of rights to the software in these cases, the VAT exemption introduced by the Federal Law of 19.07.2007 N 195- is not applicable.
The Ministry of Finance of the Russian Federation shares the position that operations on the transfer of rights to use the software when selling their copies on carriers in commercial packaging containing the terms of the license agreement (packaging license) are subject to VAT. However, the Ministry of Finance of the Russian Federation makes one significant reservation, according to which VAT is charged if, at the time of such implementation, a licensing agreement is not in writing (see Letter of the Ministry of Finance of the Russian Federation of December 29, 2007 N 03-07-11 / 648, Letter of the Ministry of Finance of the Russian Federation of February 21, 2008 N 03-07-08 / 36, Letter of the Ministry of Finance of the Russian Federation of 01.04.2008 N 03-07-15 / 44).
Thus, the Ministry of Finance of the Russian Federation leaves open the possibility of applying VAT exemption when transferring software on tangible media with proper registration of contractual relations. In a letter dated December 29, 2007 N 03-07-11 / 648 it is explicitly stated that when an organization carries out distribution activities for software products through a network of resellers (dealers, distributors) with the transfer of non-exclusive rights from the producer organization through a chain of intermediaries to the final on the basis of the licensing agreements concluded by them, then in accordance with Federal Law of 19.07.2007 N 195-FZ, such operations are not subject to value added tax.
Similarly, the issue can be resolved in the case of the delivery of software as part of the software and hardware complex on OEM terms. In this case, the software actually pre-installed on the computer is purchased and, in the absence of a separate license agreement for its use, the application of VAT exemption is unreasonable. However, the supply of equipment with installed software may be accompanied by the conclusion of a license agreement, the remuneration for which will not be subject to VAT.
When providing copies of software under a license agreement on tangible media in product packaging, the issue of exempting them from VAT should also be positively resolved. The transfer of the material carrier to the licensee is carried out in the order of fulfillment of obligations under the license agreement, therefore there is no need to separate their cost from the license remuneration and to charge VAT on it.
As the RF Ministry of Finance rightly points out in a letter of 01.04.2008 N 03-07-15 / 44, these operations are exempt from taxation regardless of the method of transferring computer programs and databases. Therefore, if the transfer of these rights provides material carriers in which the results of intellectual activity are expressed, as well as documentation, technical means of protection and other accessories in packaging containers necessary for the effective use of the results of intellectual activity, the transfer of such material carriers and accessories is exempt from tax value added, provided that their value is taken into account in the value of the rights transferred by license (subli enzionnym) contracts. At the same time, the amount of value added tax imposed by suppliers, including tangible media, documentation, technical means of protection and other supplies used in the transfer of rights to use the results of intellectual activity that are not taxable, in accordance with paragraphs. 1 p. 2 Art. 170 NC are taken into account in the cost of the relevant goods (works, services) and are not deductible.
At the same time, we would like to draw attention to the fact that in the case of applying VAT exemption on transactions with boxed software and OEM products, it is necessary to take into account high tax risks due to possible re-qualification of transactions for the following reasons.
The transfer of rights "by chain" is built on the sublicensing scheme. Under the law, the licensee cannot transfer more rights to the sublicensee than he himself received under a license agreement. Thus, in order to grant the sublicensee the rights to use the programs, the licensee needs to acquire such rights that he, in principle, is not required to implement the programs. In the case of distribution of boxed software, its copy has already been put into civil circulation by replicating on tangible media and selling them by the first seller. Consequently, the right to reproduce and distribute copies has already been used. The right of reproduction (installation) and the functional application of the sold software to the distributor is not required, since its goal is the subsequent implementation, rather than extraction of useful properties of such software. The end user also does not need them due to the provisions of the earlier provisions of article 1280 of the Civil Code of the Russian Federation.
The situation is the same with OEM products: the terms of the license agreement are accepted by the installer of the software, then such software is transferred as part of the equipment and does not require the end user to re-enter the license agreement.
Thus, sublicensing contracts for the provision of rights for boxed software and OEM products can be recognized as sham transactions aimed at obtaining tax benefits from the use of VAT benefits.
Source: https://habr.com/ru/post/284614/
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