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Business Community Calls on Ukraine’s President to support the IT Industry

Business Community Calls on Ukraine’s President to support the IT Industry

The American Chamber of Commerce in Ukraine, European Business Association, Ukrainian IT Association, The Union of Ukrainian Entrepreneurs and Ukrainian Venture Capital and Private Equity Association addressed Volodymyr Zelenskyi, President Of Ukraine with asking to accelerate the implementation of measures that will strengthen the Ukrainian IT sector from January 1, 2021.

In the context of global economic crisis, as well as the tendencies of neighboring countries to stimulate the IT industry, the business believes that for the full development of the industry in Ukraine it is necessary to take several legislative steps to improve the efficiency of IT companies and ensure predictability in doing business in our country:

1. provide the declarative principle of joining the special legal regime for the IT industry, as well as ensure transparency and predictability of legal regulation, prevent an increase in the regulatory burden or the creation of additional regulators in the IT industry;

2. to guarantee the tax rates and fees invariability using the simplified taxation system in the IT industry - to leave the existing mandatory payments for IT professionals who are individual entrepreneurs: 5 % - a single tax and a single social contribution from 1 minimum salary;

3. to provide the possibility of applying the personal income tax rate of 5 percent and a single social contribution of 1 minimum wage for individuals who are in employment with companies in the IT industry;

4. to establish a special legal regime for 15 years, and clear conditions for automatic prolongation of the regime;

5. to guarantee the IT industry companies the opportunity to freely and equally choose the forms of cooperation with IT specialists: based on concluding agreements with 3rd group of individuals - entrepreneurs or by including IT specialists in the company's staff (based on the employment contract);

The project principle of the industry and the dynamic nature are better suited to contract cooperation than to full-time employment. Most IT companies hire IT professionals as entrepreneurs, not through their inclusion in the company's staff on an employment contract basis.

It is necessary to eliminate the risk of possible retraining of cooperation with 3rd group of individuals - entrepreneurs in employment relations and, accordingly, the confidence of IT business that it will not be persecuted in connection with cooperation with IT specialists who are 3rd group of individuals - entrepreneurs.

6. to ensure the possibility of using a special contract form of relations between companies in the IT industry and their full-time employees, which will be more flexible than the form in current labor legislation;

7. strengthen the protection of IT business from potentially illegal actions by law enforcement agencies and promote property rights protection;

8. to simplify the procedure for obtaining immigration permits to Ukraine for foreign IT specialists;

9. to develop mechanisms for public-private cooperation in education and state order for admission and graduation of IT professionals with higher education, and improving the quality of IT education.

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