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LAW OF UKRAINE

of July 15, 2021 No. 1667-IX

About stimulation of development of digital economy in Ukraine

Section I. General provisions

Article 1. Determination of terms

1. In this Law terms are used in such value:

1) gigabyte contract - the civil agreement on which the specialist gigabyte shall perform works and/or render services according to tasks of the resident Deystviye City as customer, and the resident Deystviye City shall pay the performed works and/or the rendered services and to provide specialist gigabyte proper conditions for performance of works and/or rendering services, and also the social guarantees provided by the Section V of this Law;

2) specialist gigabyte - the physical person who on gigabyte contract is contractor and/or the contractor;

3) total income of the legal entity - the amount of net income from sales of products (goods, works, services), other operating income in the form of royalty if such royalty are considered in net income from sales of products (goods, works, services);

4) the applicant - the legal entity who filed in authorized body petition for receipt of resident status Action of City;

5) the qualified income - the amount of net income from sales of products (goods, works, services) and the royalty (if such amounts of royalty are not included in net income from sales of products) received as a result of implementation of the types of activity provided by part four of article 5 of this Law;

6) compensation - the cash amount which is subject to payment in the cases provided by this Law or the agreement which party is the resident Deystviye City;

7) competitive action - any of the actions specified in Items 1 - 4 parts three of article 27 of this Law, or other action determined by the agreement on abstention from making of competitive actions between the resident Deystviye City and as competitive the specialist;

8) independent conclusion - the report on confidence provision provided by the subject of auditor activities for results of check of the statements of the resident Deystviye City stated in the report on compliance for certain period;

9) legal regime of Deystviye City - set of precepts of law which determine the rights and obligations of person which arise change and stop in connection with the address about obtaining, acquisition and loss of resident status of Deystviye City, and also feature of regulation of the relations with participation of the resident Deystviye City and participation in its authorized capital;

10) the register Action of City - the register which is kept electronically and contains information on legal entities who are or were in resident status Action of City;

11) the resident Deystviye City - the legal entity who according to this Law received resident status of Deystviye City and according to information containing in Deystviye City's register is in this status;

12) the size of average monthly salary to workers and specialists gigabyte - the amount calculated by division of the amount of all payments in the form of remuneration (salary) (to tax withholding, charges and other obligatory payments) made by the legal entity to workers and specialists gigabyte in the corresponding calendar month into total quantity of workers and specialists gigabyte which performed such payments;

13) residence term - the period from the date of acquisition by the legal entity of resident status Action of City about day of loss by such legal entity of resident status Action of City;

14) authorized body - the central executive body providing forming and realization of state policy in the sphere of digital economy;

15) the specialist - the worker or the specialist gigabyte of the resident Deystviye City or the physical person (physical person entrepreneur) attracted with the resident Deystviye City based on another civil or the economic legal instrument about performance of works (rendering services) within implementation of the types of activity provided by part four of article 5 of this Law.

2. The term "Unified State Register" is used in this Law in the value given in the Law of Ukraine "About state registration of legal entities, physical persons entrepreneurs and public forming", the terms "final beneficial owner", "service provider, the virtual assets connected with turnover" and "structure of property" - in the values given in the Law of Ukraine "About prevention and counteraction of legalization (washing) of income gained in the criminal way, to financing of terrorism and financing of distribution of weapons of mass destruction", the term "net income from sales of products (goods, works, services)" - in the value given in the Law of Ukraine "About financial accounting and the financial reporting in Ukraine", the terms "connected persons", "tax debt" and "royalty" - in the values given in the Tax code of Ukraine.

Article 2. The relations regulated by this Law

1. This Law determines organizational, legal and financial basis of functioning of legal regime Action of City, is entered for the purpose of stimulation of development of digital economy in Ukraine by creating favorable conditions for conducting innovative business, development of digital infrastructure, investment attraction, and also talented specialists.

2. The relations concerning acquisition and loss of resident status of Deystviye City, the relation with participation of the resident Deystviye City and about participation in the authorized capital of the resident Deystviye City are regulated by the Constitution of Ukraine, the Civil code of Ukraine, this Law, the laws of Ukraine which determine features of the taxation of residents of Deystviye City, other laws and subordinate regulatory legal acts, and also international treaties which consent to be bound is provided by the Verkhovna Rada of Ukraine.

3. If the international treaty of Ukraine which consent to be bound is provided by the Verkhovna Rada of Ukraine establishes other rules, than provided by this Law rules of the international treaty of Ukraine are applied.

4. The general principles of legal regime Action of City are:

1) freedom of activities - availability at all residents Action of City of the right to independently perform economic activity, the rights to choose forms of the organization of such activities and form of cooperation with the third parties taking into account provisions of this Law, and also availability at specialists of the right to independently perform any activities which are not forbidden by the law, the rights to choose forms of the organization of such activities and form of cooperation with other persons;

2) non-interference - non-interference of the state, state bodies and local government bodies, their officials to activities of residents Action of City if such activities are performed within this Law and other legislation of Ukraine;

3) presumption of legitimacy of activities of residents Action of City - decision making for benefit of residents Action of City or applicants if the provision of the law or other regulatory legal act published based on the law or if regulations of the different laws or regulatory legal acts allow ambiguous (multiple) interpretation of the rights and obligations of residents Action of City either applicants, or the states, or state bodies or local government bodies or their officials;

4) stability - guarantee of preserving legal regime by the state Action of City and stability of its conditions provided by this Law and the laws of Ukraine which determine features of the taxation of residents Action of City, during the term determined by this Law including inadmissibility of restriction or narrowing of content of the rights and guarantees provided by legal regime Action of City, and also inadmissibility of increase in regulatory load of residents Action of City during such term;

5) formal nature of the procedure of acquisition of resident status Action of City - lack of requirements for receipt of special permissions, licensing or implementation of actions of the state supervision (control) for idea and consideration of the application of receipt of resident status Action of City and entering of information on the applicant into the register Action of City;

6) voluntariness of residence in Action of City - inadmissibility of the direct or mediated compulsion of legal entities to receipt of resident status Action of City.

5. The legal regime of Deystviye City is applied to the relations with participation of the resident Deystviye City or concerning participation in the authorized capital of the resident Deystviye City during the term of its residence taking into account provisions of parts six and the seventh this Article.

6. To contractual relations with participation of the resident Deystviye City or concerning participation in the authorized capital of the resident Deystviye City, arisen during the term of its residence, the legal regime of Deystviye City irrespective of the fact of loss by such legal entity of resident status of Deystviye City is applied if other is directly not provided by the agreement or this Federal Law.

7. Features of application to the resident Deystviye City of special conditions of the taxation, day of the beginning and day of phase-out of such conditions are determined by the Tax code of Ukraine.

Article 3. Guarantee period of stability of legal regime Action of City

1. The legal regime of Deystviye City according to this Law is set for unrestricted term, but for 25 years at least from the date of entering into Deystviye City's register of record about the first resident Deystviye City.

2. Within 25 years from the date of entering into Deystviye City's register of record about the first resident Deystviye City the state guarantees to Deystviye City's residents force of legal regime of Deystviye City and stability of its conditions determined by this Law, the laws of Ukraine which determine features of the taxation of residents of Deystviye City, and also observance of the rights and legitimate interests of residents of Deystviye City and the experts involved with them.

3. If during the term determined by part two of this Article the legislation establishes other regulations than provided by this Law, the laws of Ukraine which determine features of the taxation of residents of Deystviye City and the experts involved with them which will provide more favorable conditions for conducting activities and/or to reduce the amount of taxes, charges and other obligatory payments, or to cancel them, will mitigate or cancel responsibility of the resident Deystviye City and/or the experts involved with it, or will improve in a different way their provision, other regulations shall be applied to the resident Deystviye City and attracted with it to specialists.

4. The guarantees of stability of legal regime provided by this Article Action of City do not extend to changes in the legislation of Ukraine which concern questions of defense, homeland security, ensuring public order and environmental protection.

5. On all residents Action of City and their participants (shareholders) expatiates system of the state guarantees of protection of investments, stipulated by the legislation on investing activities and the mode of foreign investment.

Section II. Residents Action of City

Article 4. Resident status Action of City

1. Acquisition of resident status Action of City under this Law is voluntary. For receipt of resident status Action of City the legal entity shall file in authorized body petition according to the procedure, determined by this Law.

2. The legal entity acquires resident status Action of City from the date of entering of the corresponding record into the register Action of City taking into account provisions of part seven of article 2 of this Law.

3. The legal entity loses resident status Action of City from the date of entering of the corresponding record into the register Action of City taking into account provisions of part seven of article 2 of this Law.

4. For implementation of economic activity the resident Deystviye City has the right to involve workers based on employment contracts (contracts), specialists gigabyte - on the basis gigabyte contracts according to this Law, and also contractors and contractors, including physical persons entrepreneurs, - based on others civil or economic legal instruments according to the procedure, determined by the legislation.

Article 5. Requirements to the resident Deystviye City

1. The legal entity registered in the territory of Ukraine in the procedure established by the legislation of Ukraine irrespective of its location and the place of implementation of economic activity which meets all following requirements can be the resident Deystviye City:

1) is performed by one or several types of activity determined by part four of this Article that is specified in its charter and/or the information about him containing in the Unified state register;

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