• Українською
  • Mykhailo Fedorov: Diia City will help reduce the tax burden fivefold
    Ministry of Digital Transformation of Ukraine, posted 25 March 2021 16:37

    The tax system under the special legal regime Diia City will reduce the tax burden fivefold if to pay taxes "in white" as compared to the current taxation. That is, the best tax conditions for conducting IT business will be created in Ukraine.

    This was stated by Deputy Prime Minister/Minister of Digital Transformation Mykhailo Fedorov at a press conference dedicated to the presentation of the revised main bill on Diia City №4303.

    According to him, currently, in many countries, there are new opportunities for the development of IT business. Instead, Ukraine, which has huge potential, keeps out of these processes. There is a catastrophic shortage of food companies in the country, while Ukrainian startups prefer other jurisdictions.

    “We want Ukraine to be known as a country with the best tax system, as a country of startups and large food companies, as a country where it is easy to do business. We need a large number of food companies in Ukraine so that IT professionals can earn more. Diia City is a unique opportunity for our country to provide this. At the same time, we will support the system that is currently working, we will act as its advocates,” the Minister of Digital Transformation emphasized.

    The concept also takes into account all possible legal safeguards to protect business and stimulate investment in Ukraine. Mykhailo Fedorov is confident that this will make Ukraine a prominent high-tech player on the world map.

    David Arahamiya, a People's Deputy and head of the Servant of the People faction, also believes that Diia City will help create conditions for the development of food companies in Ukraine.

    “Today, the conditions available in Ukraine are not suitable for everyone, global companies also cannot enter, they do not trust the current system. Therefore, it was decided to create a virtual zone, which will extend to the whole country. Participation in it will be voluntary,” the MP emphasized.

    He also assured that he would do everything possible to prevent the adoption of bill №5054 on determining labor relations and signs that they exist, which is opposed by the IT industry.

    Deputy Minister of Digital Transformation Oleksandr Bornyakov, for his part, added that the Ministry of Digital Transformation would not be the regulator of Diia City. The legislation will define clear criteria for joining the special regime, which will not allow discretion. He also stressed that the residency in Diia City will be completely voluntary.

    “We are proud of the success story of Ukrainians, but we do not have a success story of Ukrainian high-tech companies. Diia City is a way to create such conditions for these companies to choose Ukraine,” he added.

    Deputy Chairman of the Committee on Digital Transformation Yegor Chernev dwelled on the details of the revised basic bill on Diia City №4303. He said that the document takes into account most of the wishes of the IT industry and the best provisions of alternative draft laws №4303-1 and №4303-2.

    Co-chairman of the IT Committee of the European Business Association Valery Krasovsky stressed that in the process of developing the legal framework Diia City a number of issues had been solved through a fruitful and constant dialogue. In particular, the obligation to establish a Residents' Organization with mandatory contributions has been abolished, the transparent entry has been provided, residency criteria and automatic verification have been agreed, and the minimum possible scope of regulatory and supervisory powers of the Ministry of Digital Transformation has been agreed.

    Olexandr Konotopsky, the founder and CEO of Ajax Systems, said during a press conference that Ukraine desperately needs to introduce special tax conditions for IT companies, as the current ones are non-competitive.

    “For example, currently Ukraine's exports are about $ 50 billion, and sales of Airpods headphones are within $ 15 billion. We need to create conditions for talented people to create values, there are no other options,” he said, adding that it is Diia City that forms a competitive jurisdiction.

    EPAM Ukraine Chairman Yurii Antonyuk considers Diia City the best result of cooperation between the state and the IT industry and expressed the opinion that many of his colleagues support this concept.

    "I am confident that together we will create the best conditions and will harmoniously develop the existing service areas and product companies, startups and high-tech, in order to confirm that Ukraine is the best hub and concentration of talent," he said.

    As a reminder, Diia City is a special legal regime for the IT industry, which provides a set of incentives for the development of Ukraine as a high-tech digital state.

    An extended Diia City presentation for the IT industry will be held soon.