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Market Watch: Ukraine grants 10-Year VAT relief for IT sector

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Aug. 1, 2012, 9:32 a.m. | Business — by Market Watch

Starting January 1, 2013, and up until January 1, 2023, Ukrainian enterprises producing software are exempt from paying value added tax on software supply operations.
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Starting January 1, 2013, and up until January 1, 2023, Ukrainian enterprises producing software are exempt from paying value added tax on software supply operations. VAT relief will apply to the supply of operating systems, regular computer programs, system administration, encryption software, websites, online services, testing and consulting in the area of IT, etc. The President of Ukraine Viktor Yanukovych signed the respective law on Monday, July 30th.

In order to obtain tax relief, IT companies are expected to submit the respective form to the tax authorities. Currently, Ukrainian IT industry remains the subject to 20 percent VAT. Importantly, starting January 2013, the corporate tax for IT companies will be reduced from 21 percent to five percent, according to the new law. Comparably, corporate tax in the U.S. is variable and may go up to 35%.

Read more here.

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