IT companies face a number of challenges in the field of accounting and taxation. Numerous transactions, international contracts, complex tax requirements, and bureaucracy can complicate business operations. In Ukraine, a special regime called Diya City was created to facilitate the work of the IT industry. As of April 2025, 2,318 residents had joined it. Iryna Kachmarczyk, managing partner of CeDePe Group in Ukraine, explained why IT specialists choose Diya City and what accounting "bonuses" residency provides.
Tax accounting for IT: challenges and solutions
IT companies work with various sources of income: software sales, consulting services, custom product development, etc. Each type of activity may have its own taxation nuances: VAT, income tax, currency transactions. This creates confusion and a high risk of accounting errors.
Residents of Dія.City can choose between two taxation models: the classic model with an income tax of 18% or a capital gains tax (CGT) of 9%.
These rates significantly simplify tax administration and reduce the burden on accountants, as they eliminate the need for detailed accounting of VAT and income tax.
About the specifics of international operations
Many Ukrainian IT companies work with foreign customers and freelancers. This complicates accounting due to:
- currency transactions;
- taxes on non-resident income;
- the need to comply with international standards.
City allows IT companies to easily work with foreign clients. Contracts can be concluded without unnecessary bureaucracy, and income from abroad can be kept in foreign currency.
A separate advantage for residents is the ability to conclude gig contracts. This is a new format of cooperation that combines the flexibility of the sole proprietorship model with social guarantees for employees. Gig contracts allow you to quickly attract specialists, assemble teams for specific projects, and at the same time remain in the “white” legal plane.
Bureaucracy and labour-intensive reporting
Traditional accounting involves filling out numerous paper documents, reports, and declarations. This distracts from the company’s core business, takes time, and increases the likelihood of errors.
The regime provides for digital reporting and integration with government systems, allowing documents to be submitted online. Process automation reduces the bureaucratic burden and speeds up accounting work.
Diy City allows IT companies to focus on development and innovation by reducing the burden on accounting and simplifying tax procedures.
Conclusions: who can join Diya City and why
In summary, Diya City helps IT companies minimise routine tasks and focus on what matters most: business development and creating innovative products. Key benefits of residency:
- Simplified and preferential taxation.
- A single tax rate.
- Convenient gig contracts.
- Transparent model for working with international clients.
- Digitalisation and automation of reporting.
Who can become a resident of Dія.City:
- IT companies (legal entities registered in Ukraine) working in the field of software development, game development, cybersecurity, cloud technologies, EdTech, R&D, etc.
- Teams with at least 9 employees or gig contracts. The average monthly remuneration is at least €1,200.
- The company must have no tax debts, must not be in bankruptcy proceedings, and must have no ties to an aggressor state.
- The legal entity must receive at least 90% of its income from qualified IT activities both in the first three months after obtaining Diia.City resident status and every year thereafter.
You can apply for membership in Diia.City online through Diia, but to maintain the company’s residency, you must regularly confirm compliance with the requirements, maintain records, and undergo audits. That is why many businesses turn to professional accounting companies. CeDePe has experience working with the IT sector and provides accounting services for Diya.City residents: from setting up a tax model to subsequent auditing.
