Innovations review in the package of bills in the introduction framework of the legal regime "Diia City"

// sbh-partners.com.ua

The “Diia City” legal regime, aimed at establishing special conditions for the operation of IT business, establishes tax and other preferences for Ukrainian companies – “Diia City” residents.

The concept of "Diia City" was presented by the Ministry of Digital Transformation of Ukraine in mid-2020. The main goal of "Diia City" was to create in Ukraine one of the most powerful IT hubs in Central and Eastern Europe. At the moment, within the framework of the implementation of the “Diia City” concept, Verkhovna Rada of Ukraine has adopted in the first reading two bills on “Diia City”:

It is expected that the adoption of a package of these bills "Diia City" will create favorable conditions for the development of Ukrainian IT business and make Ukraine more attractive for investments.

The main innovations provided by the Bill № 4303.

According to the provisions of Bill № 4303, the legal regime of “Diia City” is established for at least 15 years from the date of entry into force of Bill № 4303.

There are criteria for “Diia City” residency:

 

There are "anti-criteria" of residency - who can not be a resident of "Diia City":

1. Foreign legal entities.

2. State or communal enterprises, or legal entities, in the authorized capital of which 25% or more belong to the state or territorial community.

3. Non-profit legal entities.

4. Legal entities whose information on beneficial owners has not been disclosed, or whose ownership structure has not been submitted.

5. A legal entity, in the authorized capital of which 10% or more belongs, and / or the ultimate beneficial owners (controllers) of which is the state recognized by the Verkhovna Rada of Ukraine as the aggressor state, or a resident of this state.

6. A legal entity in the authorized capital of which 25% or more belongs to legal entities registered in the states included in the Group for the Development of Financial Measures to Combat Money Laundering (FATF) in the list of countries that do not cooperate in combating money laundering.

7. A legal entity in respect of which special economic or other restrictive measures (sanctions) have been applied in accordance with the legislation of Ukraine or international sanctions recognized by Ukraine, as well as persons affiliated with it.

8. Legal entity is declared as bankrupt.

9. A legal entity that is in the process of termination, except for transformation.

10. Legal entities that have overdue obligations for the payment of taxes, fees and other mandatory payments to the budget of Ukraine of any level in the amount of 10 minimum wages or more, as of January 1 of the current calendar year.

11. A legal entity provides services related to the circulation of virtual assets, does not meet the qualification requirements for providers of such services.

Other key changes under the Bill № 4303:

The main innovations provided by the Bill № 5376.

If Bill № 4303 is more aimed at regulating the procedure and criteria for obtaining and losing the status of a resident of “Diia City”, as well as establishes the powers and scope of control over the activities of residents, Bill № 5376 aims to regulate the taxation of residents of “Diia City”.

Key changes within the framework of the Bill № 5376:

Of course, the bills were passed only in the first reading and the conditions for creating a legal regime for “Diia City” may change, especially given the discussions around the proposed alternative bills. However, the lawyers and attorneys of SBH Law Offices are ready to help you understand and clarify current issues within the legal regime of “Diia City”.

 

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