Diia.City residents are companies and entrepreneurs registered under a special legal regime created within the framework of the Ukrainian government’s Diia.City initiative.
Under Ukrainian Law No. 1667-IX “On Stimulating the Development of the Digital Economy in Ukraine” dated July 15, 2021 (hereinafter referred to as Law No. 1667-IX), Diia.City residents are required to annually submit, no later than June 1 of the following year, a compliance report to the authorized body (Ministry of Digital Transformation of Ukraine, hereinafter referred to as the Ministry) for the period from January 1 to December 31 of the previous calendar year (annual compliance report).
The annual compliance report shall be accompanied by an independent opinion provided by an audit entity based on the results of verifying the statements of the Diia City resident outlined in their annual compliance report.
On February 13, 2024, the Cabinet of Ministers adopted Resolution No. 163 “Certain Issues of Restoring Reporting of Diia City Residents”, which provides for the restoration of submission of the Compliance Report for the year 2023 along with the independent auditor’s opinion.
The new Resolution No. 163 defines the reporting rules for Diia City residents for the year 2024 as follows:
- Diia City residents must submit annual compliance reports and independent auditor’s opinions for 2023 by June 1, 2024.
- Initial compliance reports for the year 2024 are not submitted.
- Residents do not lose their status due to non-compliance with criteria regarding the number of actual employees, their salaries (remuneration), and the proportion of qualified income based on the reporting for the year 2023.
- From March 1, 2024, residents are obliged to comply with all Diia City requirements to maintain resident status in 2025.
The audit of the Diia City resident’s Compliance Report is carried out to ensure the statements made by the Diia City resident in their Compliance Report, regarding compliance with the requirements specified in Article 5 of Law No. 1667-IX:
Conducting relevant types of activities (as indicated in the statute and/or information contained in the Unified State Register) (computer programming, IT consulting, computer equipment management, publishing of computer games and other programs, provision of software in “online” mode, IT education, cybersecurity, etc.).
Compliance with the appropriate amount of average monthly remuneration to employees and gig-specialists (not less than the equivalent of 1200 euros).
Compliance with the average number of employees and gig-specialists of the legal entity of at least nine persons.
Compliance with the requirements regarding the amount of qualified income of the legal entity (not less than 90 percent of the total income).
Absence of circumstances specified in part 2, Article 5 of Law No. 1667-IX regarding the legal entity (foreign registration, status of a non-profit organization, bankruptcy, tax debtors, etc.).
International standard governing assurance engagements not included in an audit or review of historical financial information ISAE 3000 “Assurance Engagements Other than Audits or Reviews of Historical Financial Information” is applied for the preparation of the audit report.
The audit is an important component of the control system over compliance by Diia.City residents with the requirements of Law No. 1667-IX. If the audit results indicate that the resident does not meet the established criteria, the Ministry may decide to revoke the resident status.
We provide services for:
- Audit of the initial Compliance Report of Diia City residents;
- Audit of the Compliance Report of Diia City residents upon request of the authorized body;
- Audit of the annual Compliance Report of Diia City residents.
How to prepare for the audit?
- Thoroughly review the materials of the webinar held on February 22, 2024, with the participation of representatives from the Audit Chamber of Ukraine, the State Tax Service of Ukraine, and the Ministry of Digital Transformation moderated by Crowe Erfolg Ukraine.
- Ensure the availability of supporting documents and requirements outlined by representatives of the Ministry, Tax Authorities, and auditors.