Exemption from VAT for the exercise of rights to computer programs and databases

10/12/2020

Dear Clients and Partners, 

We inform you about the Amendments to the Tax Code were introduced by Federal Law No. 265-FZ of July 31, 2020. The changes introduce additional requirements for exemption from VAT for the exercise of rights to computer programs and databases. Amendments to the Tax Code come into force on January 01, 2021. 

In the new version of clause 26, clause 2 of article 149 of the Tax Code the right to a VAT "exemption" is retained exclusively in relation to the exercise of rights to software included in the register of Russian programs for electronic computers and databases (Register of domestic software), which maintains Ministry of Telecom and Mass Communications. 

As a result of the tax maneuver in the IT industry, the alienation and granting of rights to foreign software, regardless of the type of contract, will be subject to VAT. By definition, such software cannot be included in the Register of Domestic Software. 


We also draw your attention to the fact that the exemption from VAT provided now for exclusive rights to inventions, utility models, industrial designs, and know-how remains.