Special legal framework for IT companies: simplified rules for the “Diia.City” residents

During the period of martial law and until the first day of the month following the cancelation of martial law in Ukraine:

• it is not required to comply with the minimum monthly remuneration requirement for employees and gig specialists, which according to the Law “On Stimulating the Development of the Digital Economy in Ukraine” (hereinafter – the “Law“) should be equal at least to the equivalent of EUR 1200 at the official rate established by the NBU;
• it is not required to comply with the requirement regarding the average number of employees and gig specialists of a legal entity, which according to the Law should comprise at least nine people;
• it is not required to comply with the requirement regarding the amount of qualified income of a “Diia.City” resident, which according to the Law should constitute at least 90 percent of the amount of its total income for the respective period.

“Diia.City” residents, not complying with the mentioned criteria during the martial law should not be deprived of the “Diia.City” resident status.

Additionally, “Diia.City” residents were exempted from the obligation to submit reports on compliance and the independent conclusion of the auditor on the results of verification of the “Diia.City” residents’ reports till January 1 of the calendar year following the year of termination of martial law in Ukraine.

Moreover, on March 17, 2022, the Ministry of Finance of Ukraine has approved the form of application for the special taxation as a “Diia.City” resident, as well as the procedure for submitting and reviewing the respective application.

Henceforth, “Diia.City” residents have the opportunity to switch to the special taxation terms having submitted an application by electronic means in electronic form to the authorized body (including the moment of applying for the “Diia.City” resident status).

The respective application form and submitting procedure came into force on March 31, 2022.