Is Saas a service or a license?

    I want to make a small contribution to the discussion about what SaaS is and what provisions of the Civil Code it is regulated. Well, or continue this argument. In my opinion, SaaS is a license. My arguments are as follows.

    There is an opinion that distinguishes SaaS from the license one fact: whether the program is installed on the hard drive or access to it is remote. In the case of remote access, there are arguments that it does not apply to the “use” of the Program. Possible options for using copyright objects, which include programs, are listed in part 2 of article 1270 of the Civil Code. A license agreement is an agreement on the right to use the program (article 1235 of the Civil Code). That is, it turns out that if there is no “use" of the program, then the contract on the basis of which it is used is not a license agreement. And hence the tax consequences because of the need to pay VAT, because payments under the license agreement are exempted from VAT (paragraph 26, paragraph 2, Article 149 of the Tax Code).

    Still, if you carefully look at the list of what relates to the “use” of the program, you can pay attention to subparagraph 5 of paragraph 2 of article 1270: “rental of the original or a copy of the work”. A copy is a copy of a work in any tangible form (clause 1 of article 1268), but copies of works can also exist in electronic form (clause 1 of article 1275). Although paragraph 5 of Article 1270 states that rental does not apply to computer programs, there is an exception: if the program is the main rental object, then such rental is the use of the program. It turns out that if you rent a program (for example, its electronic copy), then you use it, if you use it, then you need a license agreement. Therefore, SaaS can be seen as a rental program, which is based on a license agreement. But rental payments can only be in a solid amount (Article 630 of the Civil Code), that is, tying SaaS payments to the amount of use of the program in this case will not work.

    Ok, but there is one more provision of the Civil Code, namely paragraph 3 of Article 1270, which states that the practical application of the work is not its use. This argument justifies the fact that the functional use of the program (that is, its use) is not a use, and if there is no use, there is no license agreement. In fact, this provision of article 1279 of the Civil Code suggests that a license agreement is only necessary to obtain a copy of the program, and that it is not necessary to use a license agreement. It is logical, buying a program on disk, or downloading it from a site, you pay for this program, and not for its use. Therefore, the SaaS agreement should be formulated in such a way as to provide for the provision of the program, and not its application.

    Conclusions: SaaS can be considered as a rental copy of the program in electronic form. In this case, the SaaS agreement can be considered as a license agreement, which allows you to make payments under it without VAT, but payments can only be established in a fixed amount.

    It is interesting to discuss the arguments for and against such a position.

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