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IT Committee experts join the working group to finalize the Diia City project

08/ 05/ 2020
  Yesterday, May 7, representatives of the EBA IT Committee took part in an online meeting with the Ministry of Digital Transformation. At the meeting, there was a presentation of the new project “Diia City” followed by the discussion. The initiative was presented by Oleksandr Borniakov, Deputy Minister of Digital Transformation. The idea of Diia City is to create a free economic zone with extraterritorial features - such as e-residence. The main goal is to establish specific rules for the functioning and development of creative industries to enhance the digital and technical potential of Ukraine for it to become an important global IT hub in the future. At the first stage, the project will be focused on IT and R&D. According to the Deputy Minister, the main principles of this project include digital society, transparency, self-government, and innovation. As for now, the main tasks are to establish interaction between the state and business online, to provide legal protection to potential residents of Diia City based on the principles of English law. To obtain such residency and prevent its possible abuse, it is necessary to fulfill some conditions on economic activities, the number of specialists in the company (the figure is not yet specified), and probably a certain share of exports in the revenue structure of a potential resident company (e.g. 50-60%). At the same time, the project also provides the tax regulation of this zone. Thus, it is proposed to set tax rates on withdrawn capital at 10%, labor tax – at about 10% of the total workload. The project does not imply any other taxes. The industry also made some valuable points that cannot be ignored – to revise the norms of the outdated Labor Code and to focus on the implementation of the established and effective contractual mechanism of interaction between companies and sole proprietors. It is worth noting that this version of the project is currently under discussion and is being studied by the business. It was agreed that representatives from the EBA IT Committee would join the Working Group to finalize the Diia City project to create an efficient and well-developed mechanism with the common effort so that the IT industry and the state can harmoniously develop their potential in the creative industry with Diia City. IT business thanks Oleksandr Bornyakov and the Ministry of Digital Transformation for the meeting and willingness to work together. The Committees experts will analyze the project in detail and provide their suggestions and comments.

Yesterday, May 7, representatives of the EBA IT Committee took part in an online meeting with the Ministry of Digital Transformation. At the meeting, there was a presentation of the new project “Diia City” followed by the discussion. The initiative was presented by Oleksandr Borniakov, Deputy Minister of Digital Transformation.

The idea of Diia City is to create a free economic zone with extraterritorial features – such as e-residence. The main goal is to establish specific rules for the functioning and development of creative industries to enhance the digital and technical potential of Ukraine for it to become an important global IT hub in the future. At the first stage, the project will be focused on IT and R&D.

According to the Deputy Minister, the main principles of this project include digital society, transparency, self-government, and innovation. As for now, the main tasks are to establish interaction between the state and business online, to provide legal protection to potential residents of Diia City based on the principles of English law. To obtain such residency and prevent its possible abuse, it is necessary to fulfill some conditions on economic activities, the number of specialists in the company (the figure is not yet specified), and probably a certain share of exports in the revenue structure of a potential resident company (e.g. 50-60%).

At the same time, the project also provides the tax regulation of this zone. Thus, it is proposed to set tax rates on withdrawn capital at 10%, labor tax – at about 10% of the total workload. The project does not imply any other taxes. The industry also made some valuable points that cannot be ignored – to revise the norms of the outdated Labor Code and to focus on the implementation of the established and effective contractual mechanism of interaction between companies and sole proprietors.

It is worth noting that this version of the project is currently under discussion and is being studied by the business.

It was agreed that representatives from the EBA IT Committee would join the Working Group to finalize the Diia City project to create an efficient and well-developed mechanism with the common effort so that the IT industry and the state can harmoniously develop their potential in the creative industry with Diia City.

IT business thanks Oleksandr Bornyakov and the Ministry of Digital Transformation for the meeting and willingness to work together. The Committee’s experts will analyze the project in detail and provide their suggestions and comments.

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