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“The risk of charging VAT”, or What you need to know when buying software

What are the licenses?

Let’s start with a simple one. The publisher of commercial software does not want everyone to use its product for free and is trying in every possible way to prevent it – it sets a protective framework. A license is a guarantee that the copyright holder of the program will not sue you for using it. They are of four main types:OEM – pre-installed software, comes with a computer or server. Convenient for those who buy new hardware: no need to worry about which software to put on it. It can only be used on a purchased PC.
A boxed product – software of the “buy and use” class, is convenient and familiar to individuals and small businesses. Keys for such software have been provided by e-mail for a long time, and they are called boxed by old memory – they used to sell it in boxes. Suitable for those who have purchased equipment, but the necessary software is missing. Especially if the company is small and several employees will use it at once.
Corporate license – suitable for medium and large companies with a large staff and computers. Such a product contains a registered software license with information about the customer and the list of software and keys for its installation. It is optimal for companies who want to manage all licenses from one personal account, use good technical support and receive additional discounts from the manufacturer.
A subscription to software licensing requires minimal costs and allows you to receive all software updates without buying a new version. Convenient for almost all companies: the IT director does not have to keep track of when and which licenses need to be updated.
How long should I wait?

Now about the deadlines: most contracts stipulate that the delivery of software takes up to 14 days. Why?

Firstly, often this figure is registered with large vendors, so it is broadcast by all suppliers. Secondly, most manufacturing companies do not have legal entities in Russia, and they sell licenses through distributors. It turns out the following chain: the buyer goes to the software seller (reseller, online store or integrator), the software seller places an order with the distributor, the distributor directly addresses the copyright holder for the necessary software, the vendor forms an order, places it, issues licenses and sends it back. All this takes time.

Of course, the process can be accelerated, but in order not to fall under penalties for failure to meet deadlines, suppliers are reinsured and prescribe for two weeks in the contract, laying unscheduled force majeure in them.

Is there a difference between licenses for individuals and legal entities?
There are different products and licensing schemes for individuals and legal entities. Microsoft, for example, has Office Home & Student – a version for individuals and Office Standard – a corporate office license.

Whether you have selected the correct license is sometimes checked. Vendors can conduct an audit and make sure that non-commercial (home) versions of the software do not stand on working computers, and versions for educational institutions are not installed in commercial companies.

There are other types of licenses. For example, academic: they enable educational institutions to buy software at a significant discount. This is beneficial for the manufacturer: it means that the university will use the software to educate students – in fact, prepare new loyal users. However, to obtain such a discount, you must provide a copy of supporting documents: for an academic discount, a license for educational activities is required.

In addition, some manufacturers offer bonuses and discounts for large consolidated purchases of government agencies.

Why do all manufacturers switch to subscriptions?

The main trend in the development of licensing is the transition from perpetual licenses to subscription. We do not buy gas, water or light forever, but pay upon use. Striving for flexibility and licensing: how much you use – how much you pay.

This is convenient: you do not have to pay a large amount for the software right away, but limit yourself to small regular payments that do not hit your wallet so much. At the same time, the user has direct access to the latest versions and updates and high quality support. It becomes easier and scale the number of licenses. Need more? Not a problem, the monthly payment will simply increase. Pay-as-you-go, pay-as-you-grow.

How to buy software and avoid fines?

Who should I run for licensed software in order not to get problems with paying VAT and delivery times? To the official online store of the vendor or to the Russian partner?

It seems more logical to the vendor – after all, the supply chain is shorter. However, for Russian companies, a serious “minus” of buying from a vendor is the independent payment of VAT.

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