The President of Ukraine signed the Law on State Support of IT Industry (the "Law"), which came into force on 7 November 2012.

The Law provides various forms of state support applicable to "software industry entities" as they are specifically defined in the Tax Code of Ukraine.

The Law provides general terms of support of the IT industry, in particular:

• VAT exemption and CPT at the rate of 5% for 10 years starting from 1 January 2013;
• Other forms of support based on annual action plans developed by the State Agency on Science, Innovations and Informatization and approved by the Cabinet of Ministers of Ukraine;
• Perfection of reporting forms;
• Implementation of the interaction system between IT companies and government authorities;
• Monitoring and analytical studies of the market trends, etc.

After implementation of the President's proposals to the Law, tax benefits have been narrowed (namely, PIT benefits and social tax were abolished).

For further information please contact partner Oleksandr Padalka
and senior associate Illya Onyschenko