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EBA IT community welcomes the adoption of Diia.City tax component

14/ 12/ 2021
  On December 14, the VRU voted 285 in favor of draft law №5376 which identifies the tax rates and terms in Diia.City, a special regime for the IT industry. The IT community of the European Business Association welcomes the adoption of this document that would give a new impetus for the further development of the IT industry in Ukraine. Why is this important? This project introduces rather attractive tax rates for businesses operating in the field of information technology, namely: possibility to choose one of the tax options: income tax at the rate of 18% or - withholding tax at 9%; tax rates for company employees under gig contracts: personal income tax - 5%, SDR - 22% of the minimum wage, military duty - 1.5%; these tax terms are fixed for a period of 25 years. The draft law also provides for a transition period so that companies can regulate their interaction with FOPs (individual entrepreneurs). Until 2024, no restrictions are established but starting from 2024 - the expenditures of Diia.City residents on interactions with FOPs should not exceed 50%, and from 2025 - no more than 20%. Meanwhile, companies that stay with the income tax model, rather than the withholding one and whose annual turnover does not exceed UAH 40 million - will be able to work with FOPs without any restrictions, as residents of Diia.City. The IT Committee of the European Business Association is grateful to the authors of the draft laws for fruitful and constructive cooperation over the past two years on the text and terms of the initiative. Thanks to this, the industry has received quite attractive terms which, in the end, we hope will be able to stimulate the development of Ukrainian IT shortly. The draft law is currently awaiting signing by the President.   Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.

On December 14, the VRU voted 285 in favor of draft law №5376 which identifies the tax rates and terms in Diia.City, a special regime for the IT industry. The IT community of the European Business Association welcomes the adoption of this document that would give a new impetus for the further development of the IT industry in Ukraine.

Why is this important? This project introduces rather attractive tax rates for businesses operating in the field of information technology, namely:

  • possibility to choose one of the tax options: income tax at the rate of 18% or – withholding tax at 9%;
  • tax rates for company employees under gig contracts: personal income tax – 5%, SDR – 22% of the minimum wage, military duty – 1.5%;
  • these tax terms are fixed for a period of 25 years.

The draft law also provides for a transition period so that companies can regulate their interaction with FOPs (individual entrepreneurs). Until 2024, no restrictions are established but starting from 2024 – the expenditures of Diia.City residents on interactions with FOPs should not exceed 50%, and from 2025 – no more than 20%.

Meanwhile, companies that stay with the income tax model, rather than the withholding one and whose annual turnover does not exceed UAH 40 million – will be able to work with FOPs without any restrictions, as residents of Diia.City.

The IT Committee of the European Business Association is grateful to the authors of the draft laws for fruitful and constructive cooperation over the past two years on the text and terms of the initiative. Thanks to this, the industry has received quite attractive terms which, in the end, we hope will be able to stimulate the development of Ukrainian IT shortly.

The draft law is currently awaiting signing by the President.

 

Be the first to learn about the latest EBA news with our Telegram-channel EBAUkraine.

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