An engineer designing individual installations (specially for a specific client order) with an authorial nature may apply a reduced VAT rate of 8% applicable to copyright. This is due to the interpretation of the National Tax Information Director at 29 November 2017 The signature. 0114-KDIP1-1.4012.561.2017.1.DG.
The interpretation concerns an engineer performing work involving the design of equipment of a computer network type, fibre optic installations and telecommunications systems. This is an economic activity defined as specialised design (PKD code) 74.10.Z.
The applicant’s question was to apply an appropriate VAT rate to such works. The basic rate in VAT is 23% However, reduced rates are also foreseen. one of them in the amount 8% concerns the sale of copyright.
If the applicant’s work were treated as a simple service, it would be subject to VAT 23%.
The applicant presented its own position according to which the projects carried out by him and the transfer of copyright will be subject to reduced VAT 8%.
The Director of National Tax Information considered that the projects of electronic systems carried out by the applicant could be regarded as a work within the meaning of copyright:
„The subject of copyright is the work, which can also be, for example, the design of the installation of computer networks, (...) the design of telecommunications systems, etc., having the individual character of its own idea. (...) The subject of copyright is any creative activity, established in any form.”
He also assessed the applicant’s position as correct:
„This operation will be subject to tax on goods and services at a rate 8% based on Article 41(2) with regard to Article 146a(2) and item 181 Annex 3 to the bill.’
It should be stressed that the Director of National Tax Information's interpretation of the reduced VAT rate concerned individual creative work signed with the applicant's name rather than an order consisting of duplication of other persons' work for commercial purposes.