The Ministry for Digital Development, Communications and Mass Media of the Russian Federation has published explanations of terms on the use of benefits by IT companies as part of a tax manoeuvre.
These explanations define the content of such terms as “development”, “installation”, “support”. These concepts are used in Tax legislation to describe the activities of IT companies and allow such companies to apply tax benefits.
Explanation of the term “development”
In accordance with this document, software development is understood as a set of actions, the result of which are software tools. At the same time, software development includes the following processes:
The process of determining software requirements provides a number of processes, for example:
Explanation of the term “installation”
Owing to the lack of a definition of the term “installation” in the current legislation of the Russian Federation, the bodies of the Ministry for Digital Development, Communications and Mass Media (Russian acronym – Mintsifra) use the following interpretation of it:
Installation – an installed, mounted somewhere mechanism, device or system of mechanisms, devices.
An analogue of the word “installation” is the word “setting up”, whose task is to guarantee the readiness of a software product (a set of computer programs) for use in the environment intended for it. One of the results of performing works (rendering services) under the software product installation agreement is the realization by the customer of the power to reproduce such a software product. The setting up process may include such execution steps as:
Therefore, during the installation process, the work included in the development and support processes can be performed, as well as the necessary work on the adaptation of the software product.
Explanation of the term “support”
Support – actions of a software tool throughout its entire life cycle in order to maintain the efficiency of its operation.
For the best understanding of this concept, the Minttsifra recommends using the state standards GOST ISO/IEC 12207-2010, 14764-2002, 90003-2014. The provisions contained in them are applicable to various types of software: embedded and system software, mass-production products and systems, mobile and server applications, cloudware, etc. The maintainer should carry out such activities as:
And from this we can conclude that the process of software support can include a number of the following works (services):
The Mintsifra also notes that the incoming requests to the Ministry are related to the fact that organizations use concepts in contracts that are not mentioned in existing statutory enactments or normative technical documentation, but are similar in meaning and content (for example, a software package, configuration, testing, data bank, etc.). When determining the consequences of using such terms, it is recommended to proceed not from the form, but from their semantic meaning.
The most detailed information about the above-mentioned concepts is noted in the Letter No. P11-2-05-200-38749 of the Ministry dated September 7, 2021.
Please be reminded that within the framework of the current “Tax manoeuvre”, companies can count on the following types of state preferences:
These benefits can be applied by Russian organizations that carry out activities in the field of information technologies and meet a number of requirements.
In the matters of the application of tax legislation and the use of tax benefits, please contact Acsour specialists.