Preferential tax treatment of IT-companies in Ukraine

Despite the skepticism and experience of the biggest IT-industry players, July 5, 2012 the Verkhovna Rada of Ukraine taking into account the proposals of the President adopted the Law on the basis of the draft law number 9744 on Amendments to the Tax Code of Ukraine Concerning the Special Regime of Taxation of the Software Industry Products.

The special regime of taxation will be take place  from January 1, 2013 to January 1, 2023.

Implementation of the Law provides a number of positive changes for the software industry companies, namely:

  •        value added tax exemption;
  •        personal income tax in the amount of 5% instead of 15-17%;
  •        reduction of corporate income tax to 5% instead of 19%;
  •        introduction of exemptions from payment of the single social fee for both employers and employees of IT-companies.

It should also be noted that according to the adopted amendments to the Law, the need to conduct unscheduled inspections of IT-companies by bodies of the State Tax Service is eliminated, as well as obtaining the opinion letter of the State Agency for Science, Innovation and Information for obtaining the status of the subject of special-regime of taxation.

Preferential tax treatment will provide a strong impetus for growing competitiveness of the software industry and to support this huge promising market to grow at a rapid pace in future.