The State Tax Service of Ukraine issued a release on 28 December 2021 that provides an overview of the main provisions of Law No. 1946-IX of 14 December 2021 on amendments to the Tax Code to stimulate the development of the digital economy, which includes measures for the introduction of a special tax regime for residents of "Diia City" (or Diya City). The Law enters into force on 1 January 2022.

The special tax regime provides qualifying IT companies in Diia City the option to be taxed at a rate of 9% only on certain distributions (operations), including dividend distributions, interest payments to non-resident related-parties and residents of low-tax jurisdictions, provision of interest-free financing, gratuitous provision of property, royalty payments in excess of certain limits, and certain others. Distributions subject to the special tax regime are also subject to general withholding tax when made to non-residents, which may be reduced by a treaty. Further, it is provided that where this option for the special tax regime is taken, rules for a separate tax base apply for controlled transactions not at arm's length, with a rate of 18%.

Certain benefits are also provided for employees of qualifying IT companies in Diia City, including a reduced tax rate of 5% on the income of qualifying specialists up to an annual income cap equivalent to EUR 240,000. Income exceeding the cap is subject to 18% tax.