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Recent Meeting on the Diia City, New Regulation for the IT industry

Recent Meeting on the Diia City, New Regulation for the IT industry

On January 28, Chamber IT Committee Leadership participated in the meeting with Mykhaylo Kryachko, Head of the Verkhovna Rada of Ukraine Digital Transformation Committee, Yegor Chernev, Deputy Head of the Verkhovna Rada of Ukraine Digital Transformation Committee, and Oleksandr Bornyakov, Deputy Minister on Digital Transformation devoted to presentation amendments to the Diia City initiative, new legal and tax regime for the IT industry.

Key outcomes:

  • narrowing regulatory powers of the Ministry of Digital Transformation;
  • expanded and detailed list of allowed activities of the IT company;
  • established financial criteria for startups;
  • clear criteria for “Diia City” resident status withdrawal;
  • set maximum membership fee for self-regulating organization (SRO) of “Diia City” residents;
  • SRO will not have access to commercial or other information about residents.

At the same time:

  • Not clear how newly introduced form of employment “gig” worker will operate. Legal nature and equality to labor relations of the “gig” contract needs to be clarified by the Ministry;
  • Interaction of IT companies with private entrepreneurs in the “Diia City” remains questionable. Position of the Ministry and the VRU Committee – “gig” worker is enough alternative to Private entrepreneur contract;
  • Position of the Ministry and the VRU Committee on transitional period for IT companies for switching from PE to “gig” contracts is also not clear;
  • Mandatory participation in SRO and membership fees payment amounting to 14-21$ per employee per month.
  • Still no official draft of the tax part of the “Diia City” is available.

As a result of the meeting, Head of the VRU Digital Transformation Committee suggested to include discussed amendments to new Draft Law #4303-d and continue cooperation with key stakeholders on this initiative.

The Chamber is grateful to the VRU Committee and the Ministry for the dialogue and will continue cooperation with relevant stakeholders to ensure that final version of the Draft Law is the best possible outcome of this breaking piece of legislation.

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