Publication date: 19.05.2024
Lawyer
Diia.City: Development of the IT sector of Ukraine and the strategy of national income until 2030
Launched just two weeks before the full-scale invasion, Diia.City's special tax regime for IT businesses has become a beacon of resilience and growth. Despite the difficulties, it has attracted more than 950 resident companies, which employ about 62,000 IT professionals. The Ukrainian government is currently evaluating the future of these tax benefits as part of its broader National Income Strategy 2030.
### Latest additions to Diia.City
Diya.City continues to attract innovative companies, strengthening Ukraine's position on the global IT landscape. Here are some of the recent residents:
1. **UnderSports**: A mobile application designed for football coaches to plan, track progress, collect statistics and communicate with players.
2. **cliniccards**: a single CRM system for dental clinics that provides efficient management of patient records and daily automation of processes.
3. **Quarks.Tech**: An IT company focused on social discovery and online dating, known for its flagship product Kismia, which connects millions of couples worldwide.
4. **JustSmart**: An online school for kids and teens with a trusted platform that boasts over 1,000 teachers, 10,000 students and 1 million lessons.
5. **3D Tech ADDtive**: An all-in-one company offering 3D printing, scanning and modeling services, including manufacturing drone components and supporting the Armed Forces.
6. **Impressit**: An innovative company using AI and XR technologies to develop products for UK and US start-ups in the telecoms, proptech, e-commerce and logistics sectors.
### Financial contributions and tax benefits
Monobank, a prominent Diia.City resident, paid ₴1.032 billion in taxes last year, underscoring the regime's significant financial influence. Co-founder Oleh Horohovsky emphasized the importance of paying taxes and following the rules to maintain economic stability and independence.
Diia.City offers one of the world's best tax systems for tech businesses:
- **Labor taxes**: 5% personal income tax, 1.5% military levy and 22% of the minimum wage as social security contributions.
- **Corporate income taxes**: 9% of withdrawn capital or 18% of profit.
### Support for Deep-Tech and Quantum Computing
The American-Ukrainian startup Haiqu, a resident of Diia.City, was recognized by Sifted as one of the most promising quantum startups in Europe. The company develops software for quantum computers, reducing the noise and optimizing the resources required for quantum algorithms. The EU Seeds of Bravery program allocated 20 million euros in grants to support such Ukrainian deep-tech startups.
### Compliance and Reporting
In order to maintain the benefits of Diia.City, residents must confirm compliance with its criteria through regular reporting. Companies complete a compliance report online and attach an independent audit opinion, ensuring transparency and preventing abuse of benefits. The Ministry of Digital has no influence on the cost or choice of audit services, ensuring fair and independent assessments.
### Regional IT cooperation
Diia.City is strengthening ties with regional IT clusters in Ivano-Frankivsk and Chernivtsi, discussing how to become residents and get maximum benefits for business. These meetings are crucial for the stable conditions of the IT industry and the development of the startup ecosystem, providing ample opportunities for students in these regions.
### Conclusion
Diia.City is not just a tax regime; this is evidence of Ukraine's resilience and commitment to innovation. As part of the National Income Strategy 2030, it plays a key role in stimulating economic growth, supporting the development of advanced technologies and developing a thriving IT ecosystem. Constantly attracting diverse and innovative companies, Diia.City ensures that Ukraine remains a significant player on the global technology scene.
