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Publication date: 20.05.2024
Lawyer
Handy reporting advisor for Diia.City residents: instructions and procedure
It is very important for a Diia.City resident to understand and comply with statutory reporting requirements.
### Submission deadlines
According to Article 13 of Chapter II of the Law of Ukraine 1667-IX, residents of Diia.City must submit reports on the results of work for the previous calendar year no later than June 1 of the following year. In addition, within six months of obtaining Diia.City residency, residents must submit an initial compliance report.
### Submission process
#### Initial compliance report
- **Chronology**: summarizes activities and compliance with legislation for the first three full calendar months after obtaining Diia.City resident status.
- **Audit**: must be accompanied by an independent opinion of the audit organization confirming the statements made in the report.
#### Annual compliance report
- **Chronology**: covers the entire calendar year from January 1 to December 31.
- **Audit**: must also be accompanied by an independent opinion from an audit organization confirming the assertions made in the report.
### Content of the Diia.City resident status compliance report
1. **Ensuring compliance**: The report must ensure compliance with all requirements specified in Article 5 of the Law of Ukraine 1667-IX.
2. **Remuneration and personnel information**:
- Information on the average monthly salary of employees and specialists for each calendar month of the reporting period.
- Certificate on the average number of employees and specialists for each calendar month.
3. **Income information**:
- Certificate on the share of qualified income received during the reporting period in the total amount of income.
- Income declarations for residents who have acquired Diia.City resident status as specified.
### Submission of an independent opinion
An independent opinion must be provided by an audit entity authorized to conduct a mandatory audit of financial statements in accordance with the Law of Ukraine "On the Audit of Financial Statements and Auditing". This conclusion confirms the accuracy and integrity of the Resident Eligibility Report.
### About the nuances of resuming reporting for Diia.City residents in 2024
The recent resolution of the Cabinet of Ministers No. 163 dated February 13, 2024 restored the reporting obligations for Diya.City residents, which marked a significant development of the regulatory environment for the digital economy of Ukraine. This recovery comes at a crucial time, prompting a closer examination of the reporting procedure and the reasons for this decision.
### Reference: Diia.City and special taxation regime
Diia.City, created as a special tax regime for IT companies on January 1, 2022, played a key role in promoting technological innovation and economic growth in Ukraine. According to this regime, residents can choose between income tax or tax on withdrawn capital, as well as other tax incentives aimed at stimulating investment and entrepreneurship in the IT sector.
### Reporting requirements and compliance
In order to maintain Diya.City resident status, companies must meet certain criteria, including:
- Mainly focuses on IT services (90%).
- Observance of the minimum salary thresholds for specialists (1,200 euros).
- Availability of the required number of employees and specialists (9).
Compliance requires the submission of an initial compliance report and then annual reports accompanied by an independent auditor's report, a measure put in place to prevent potential abuse of the regime's privileges.
### Changes introduced by Resolution No. 163
The renewal of reporting obligations by Resolution No. 163 indicates the active approach of the Cabinet of Ministers in regulating the digital economy. The provision mandates the submission of the 2023 annual compliance report by June 1, 2024, to address concerns about potential reporting gaps during wartime operations.
