Software rental is computer software copyright rental is not a specified software service, therefore this activity is subject to subject to VAT at the rate of 10%.

Refer to Official Dispatch 10684/CT-TTHT 

Dear: CMC Technology Group Joint Stock Company (Address: 17th Floor, CMC Tower, 11 Duy Tan Street, Dich Vong Hau Ward, Cau Giay District, Hanoi City – MST: 0100244112)

Responding to Official Dispatch No. 33/CV-CMC dated March 08, 3 of CMC Technology Group Joint Stock Company (hereinafter referred to as the Company) asking about tax policy, Hanoi Tax Department has the following comments: :

– Pursuant to Decree 71/2007/ND-CP dated May 03, 5 of the Government detailing and guiding the implementation of a number of articles of the Law on Information Technology on the information technology industry:

Article 3 provides the following:

“Article 3. Interpretation of terms

In this Decree, the terms below are construed as follows:

1. Software product is software and accompanying documents produced and displayed or stored in any physical form, which can be bought, sold or transferred to another object for exploitation and use. .

…

10. Software service means activities that directly support and serve the production, installation, exploitation, use, upgrade, warranty, maintenance of software and other similar activities related to software. soft.

… '

+ Article 9 provides for the following types of software products and software services:

"2. Types of software products include:

a) System software;

b) Application software;

c) Utility software;

d) Tool software.

d) Other software.

3. Types of software services include:

a) Administration, warranty and maintenance services of software and information systems;

b) Software quality consulting, assessment and appraisal services;

e) Consulting services, building software projects;

d) Software pricing consulting services;

dd) Software technology transfer services;

e) System integration services;

g) Safety and security assurance services for software products and information systems;

h) Software product distribution and supply services;

i) Other software services.”

– Pursuant to Circular 219/2013/TT-BTC dated March 31, 3 of the Ministry of Finance guiding the implementation of the Law on Value-Added Tax and Decree No. 2013/209/ND-CP dated December 2013, 18 of the Ministry of Finance. The Government details and guides the implementation of a number of articles of the Law on Value Added Tax:

+ In Clause 21, Article 4, non-taxable subjects include:

"...

Computer software includes software products and software services as prescribed by law.

+ In Article 11 the VAT rate of 10% is as follows:

“Article 11. Tax rate of 10%

The 10% tax rate applies to goods and services not specified in Articles 4, 9 and 10 of this Circular.

... "

Based on the above provisions, because the unit did not provide specific documents, the Hanoi Tax Department replied in principle as follows:

– In case the Company sells software products and software services according to the provisions of Articles 3 and 9 of Decree 71/2007/ND-CP dated May 03, 5 of the Government above, if the products software and software services that are computer software according to law are not subject to VAT.

– In case the company leases the copyright of computer software that is not a software service as prescribed in Clause 3, Article 9 of Decree 71/2007/ND-CP dated May 03, 5 of the Government, this activity subject to VAT at the rate of 2007%.

The Company is requested to base on the actual situation at the unit, compare with the provisions of Decree 71/2007/ND-CP dated May 03, 5 of the Government to comply with the provisions of law. If you still have problems, please contact Tax Inspection Department No. 2007 - Hanoi Tax Department for answers.

The Hanoi Tax Department replied that the company was known to implement./.

Question:

(Chinhphu.vn) – Mr. Dong Van Hoan's company (Hanoi) has 100% state capital, conducts competitive bidding online for the package of non-consulting services for software maintenance services. When bidding, the contractor is letting the value added tax (VAT) be 10%, the bid price is smaller than the approved bidding package estimate.  Reply:

However, according to the provisions of the current tax law, software maintenance services are not subject to VAT. The expert group when evaluating has two different opinions as follows:

• The bidder meets the E-HSMT and is invited to negotiate. During the negotiation process, the inviting party negotiates with the bidder on compliance with the current tax law regulations of 0% VAT. The winning bid price will be deducted from the 10% VAT;
• Request the contractor to clarify the VAT in the bid price; if the contractor confirms to offer 10% VAT, adjust the VAT from 10% to 0% for further evaluation.

Mr. Hoan asked, is it right or wrong to evaluate as an expert group in the two cases above?

The Ministry of Finance responded to this issue as follows:

Pursuant to the Government's Decree No. 71/2007/ND-CP dated May 3, 5 detailing and guiding the implementation of a number of articles of the Law on Information Technology on the information technology industry:

+ In Clause 10, Article 3 on the interpretation of words:

"ten. Software service means activities that directly support and serve the production, installation, exploitation, use, upgrade, warranty, maintenance of software and other similar activities related to software. .

+ In Clause 3, Article 9 on software industry activities:

“3. Types of software services include:

a) Administration, warranty and maintenance services of software and information systems;

b) Software quality consulting, assessment and appraisal services;

c) Consulting services, software project development;

d) Software pricing consulting services;

dd) Software technology transfer services;

e) System integration services;

g) Safety and security assurance services for software products and information systems;

h) Software product distribution and supply services;

i) Other software services”.

Pursuant to Circular No. 219/2013/TT-BTC dated December 31, 12 of the Ministry of Finance guiding the implementation of the Law on VAT and Decree No. 2013/209/ND-CP dated December 2013, 18 of the Government on detailing and guiding the implementation of a number of articles of the Law on VAT:

+ In Article 4, guidance on subjects not subject to VAT:

“21… Computer software includes software products and software services as prescribed by law”.

+ In Article 9 guidance on 0% tax rate.

+ In Article 11 guiding the 10% tax rate: "The 10% tax rate applies to goods and services not specified in Articles 4, 9 and 10 of this Circular".

Pursuant to the above provisions, the case of Mr. Hoan's company providing software products and software services as prescribed in Articles 3 and 9 of Decree No. 71/2007/ND-CP dated May 3 /5 of the Government, they are not subject to VAT according to the provisions of Article 2007 of Circular No. 4/219/TT-BTC dated December 2013, 31 of the Ministry of Finance.

In case the company provides products and services that are not specified in Clause 3, Article 9 of Decree No. 71/2007/ND-CP dated May 3, 5 of the Government, they are subject to VAT at the rate of VAT. VAT is 2007% as prescribed in Article 10 of Circular No. 11/219/TT-BTC dated December 2013, 31 of the Ministry of Finance.

Hoan suggested that based on the actual situation, compare legal documents to comply with regulations. During the implementation process, if you still have problems, please provide documents related to the problem and contact the tax authority directly managing it for specific instructions.

Original post: Software maintenance service subject to VAT?

Software rental do Company that produces or buys out If it is not a software service as prescribed in Clause 3, Article 9 of Decree 71/2007/ND-CP dated May 03, 5 of the Government, then this activity is subject to VAT at the rate of 2007%.

Original article: Is software produced and leased by a company taxable?