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On August 14 was entered in a legal force the Law of Ukraine “On Stimulating the Development of Digital Economy in Ukraine” (Diia City Law) (hereiafter – Law), which provides special tax conditions for the development of a virtual state in IT industry.

Diia City is a project of a special legal conditions for the IT industry, which includes a special scheme of taxation and employment for IT specialists, as well as special preferences for resident companies.

Diia City is introduced as an alternative to current conditions. Participation is voluntary. The special regime will not be limited territorially, but will operate throughout the country.

Law defines the general principles of operation, including:


  • freedom of activity – all residents have the right to carry out economic activities independently, as well as to choose the forms of its organization and cooperation with third parties;
  • non-interference of the state – a provision on the inadmissibility of direct or indirect coercion of legal entities to acquire the status of a resident of Diia City;
  • presumption of legality of residents’ activity;
  • stability – the period during which the state guarantees the IT industry the invariability of the conditions of Diia City, increased to 25 years;
  • the formal nature of the procedure for acquiring resident status.


New tax terms in Diia City:

  • personal income tax is reduced from 18% to 5%;
  • a single social contribution of 22% of the minimum wage;
  • the ability to choose which corporate tax to pay – income tax (18%) or tax on withdrawn capital at a rate of 9%;
  • the military fee will be 1.5%.
  • 0% income tax on the sale by a natural person of a share in a resident company Diia City – provided that it has owned a share for more than 1 year;
  • 0% on the income of individuals in the form of dividends accrued by the resident company, provided that they are paid not more than once every 2 years;
  • tax discount on Personal Income Tax on the amount of investment in Ukrainian startups.


Requirements to the residents of Diia City:

  • legal entity registered on the territory of Ukraine
  • carries out one or more types of IT activity, which is specified in its charter and / or information about it, contained in the Unified State Register;
  • the amount of the average monthly remuneration to the involved employees and gig-specialists, is not less than the equivalent of 1200 EUR;
  • the average number of employees and gig specialists of a legal entity (in case of involvement) is at least nine people;
  • compliance with the requirements of the legislation on the disclosure of information about the ultimate beneficial owners and / or the provision of information about the ownership structure of the legal entity.


The concept of gig-contract is introduced in Law


Particulars of gig-contract:

  • regulated by civil law;
  • it is a separate type of contract beside labor and Service agreement with PE;
  • the work under this contract is not providing of entrepreneur activity;
  • weekly work time shall be not more than 40 hours;
  • annual paid vacation is not less than 17 days;
  • gig-contract could be terminated by either party with 30 days prior notice. During first 3 months gig-contract could be terminated with 3 days prior notice.


If you want to know more about Diia.City come to the JCC Ukraine Chapter Webinar

“Diia.City – A Game-Changer for Ukraine’s IT Industry”

August 31, 2021 (16.00 – 17.00 CET)

Register on the JCC website at:

#Ukraine #ITUkraine #Diia.City #Diya.City #DiiaCity #LawUkraine #UkraineIT #ITBusinessUkraine #JCC #HWCUkraine #Digital #UkraineDigital #GIGcontract


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