First companies have already applied for Diia.City

09/ 02/ 2022

On February 8, the Diia portal and application, which offers digital services and opportunities for Ukrainians, turned 2 years old. The big celebration of this landmark event took place at Diia Summit, with the participation of the President of Ukraine, the First Lady, and the countrys leaders. Representatives of the IT Committee of the European Business Association also joined the event. The launch of Diia.City, one of the main news of recent years for the IT industry, was announced at the event. This is a special legal and tax regime aimed at stimulating the development of the IT industry. From now on, companies can apply for participation in Diia.City. By the way, some of the EBA member companies have already submitted their applications. The IT community of the European Business Association welcomes the launch of this powerful initiative, especially given the long and sometimes difficult work on the concept. After all, at the initial stage, there were certain critical moments that the Association outlined both during the meetings and in official letters. However, the Ministry of Digital Transformation was open to changes and close cooperation with business. And just like that the attractive conditions have crystallized not only for Ukrainian but also foreign IT companies. Most important are the following positive changes noted below: An obligation of a self-regulatory organization with mandatory membership fees within Diia.City has been removed; Transparent and declarative entry criteria have been agreed upon. The verification will be conducted in a formal way with maximum automatization; The minimum possible scope of regulatory and supervisory powers of the Ministry of Digital Transformation has been agreed upon; Mandatory payment of non-solicitation agreements with clients has been removed; The minimum required level (25%) of salaries within non-compete agreements with the companys specialists has been removed; The 25-year period of operation of Diia. City regime has been agreed, counting from the date of entry of the first resident; It has been agreed on the possibility of restoring the residency and tax benefits by a court decision from the date of expulsion; The procedure for startups to join Diia.City at the end of the grace period has been harmonized Preferential PIT rates apply to all specialists of Diia.City residents without exception; An annual income per employee of € 240,000 has been agreed with a 5% PIT rate; The payment of single social contributions in the amount of the minimum insurance premium has been agreed upon; It was agreed to have the withholding tax at the rate of 9%. Thus, the established Diia.City regime will allow the IT industry to grow domestically through tax incentives, elements of English law, ensuring that these conditions remain unchanged and, most importantly, with minimal government intervention. Olga Kunychak. IT Committee Manager at the European Business Association. Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.

The launch of Diia.City, one of the main news of recent years for the IT industry, was announced at the event. This is a special legal and tax regime aimed at stimulating the development of the IT industry. From now on, companies can apply for participation in Diia.City. By the way, some of the EBA member companies have already submitted their applications.

The IT community of the European Business Association welcomes the launch of this powerful initiative, especially given the long and sometimes difficult work on the concept. After all, at the initial stage, there were certain critical moments that the Association outlined both during the meetings and in official letters. However, the Ministry of Digital Transformation was open to changes and close cooperation with business. And just like that the attractive conditions have crystallized not only for Ukrainian but also foreign IT companies. Most important are the following positive changes noted below:

An obligation of a self-regulatory organization with mandatory membership fees within Diia.City has been removed;
Transparent and declarative entry criteria have been agreed upon. The verification will be conducted in a formal way with maximum automatization;
The minimum possible scope of regulatory and supervisory powers of the Ministry of Digital Transformation has been agreed upon;
Mandatory payment of non-solicitation agreements with clients has been removed;
The minimum required level (25%) of salaries within non-compete agreements with the company’s specialists has been removed;
The 25-year period of operation of Diia. City regime has been agreed, counting from the date of entry of the first resident;
It has been agreed on the possibility of restoring the residency and tax benefits by a court decision from the date of expulsion;
The procedure for startups to join ” Diia.City at the end of the grace period has been harmonized
Preferential PIT rates apply to all specialists of Diia.City residents without exception;
An annual income per employee of € 240,000 has been agreed with a 5% PIT rate;
The payment of single social contributions in the amount of the minimum insurance premium has been agreed upon;
It was agreed to have the withholding tax at the rate of 9%.

Thus, the established Diia.City regime will allow the IT industry to grow domestically through tax incentives, elements of English law, ensuring that these conditions remain unchanged and, most importantly, with minimal government intervention.