Taxation is one of the primary reasons why technology companies consider operating under the Diia City regime rather than under the general corporate tax framework.
At the corporate level, Ukrainian companies are generally subject to 18% corporate income tax (CIT) on taxable income.
Diia City residents may choose between:
- The standard 18% corporate income tax; or
- 9% tax on distributed profits
Under the profit distribution model, taxation is triggered only when profits are distributed (for example, as dividends or certain equivalent payments).
The difference becomes even more visible at the payroll level.
Outside Diia City, remuneration paid to employees is generally subject to:
- 18% personal income tax
- 5% military tax
- 22% unified social contribution calculated from the employee’s salary
For Diia City residents engaging employees or gig specialists, a preferential model applies:
- 5% personal income tax (provided the remuneration of IT specialist does not exceed EUR 240,000 per year)
- 5% military tax
- 22% unified social contribution calculated only from the minimum wage base, rather than from the full remuneration
This payroll structure significantly reduces the effective tax burden on payroll costs and is one of the key financial drivers behind Diia City structuring.
Overall, compared to the general regime, Diia City provides a more flexible corporate taxation mechanism and a materially lighter payroll structure for qualifying IT businesses.
