In recent years, BRDO, together with other NGOs and entrepreneurs, demanded the publication of financial statements of enterprises in the form of open data. As a result, in March 2023, the State Statistics Service of Ukraine finally published the information submitted by companies for 2022. Using these data, the BRDO IT&Telecom sector team prepared an overview of the situation on the Ukrainian IT market.
Before that, for similar studies, we relied on generalised information, surveys, and expert assessments. The release of the financial statements allowed BRDO to analyse the industry in more detail. When working on the review, the BRDO team used data from the State Statistics Service, aggregated by the analytical service YouControl.
Which IT companies added the most to the state budget with income tax in 2022?
The largest payer of income tax was the largest service company “Epam Systems” LLC: they paid more than the next five combined. In the second place is the global service company Globallogic Ukraine LLC; in the third place is the product company Fintech Band LLC.
Income tax is 18%, but not all companies pay exactly that much due to accounting features. For example, Persha Studio Development LLC – the developer of the World of Tanks video game – paid income tax at an effective rate of 23.6%. Ukrainian service company “Softserve Industry” LLC – at a rate of 23.1%. At the same time, there are companies that pay less: “Epam Digital” LLC and “Metinvest Digital” LLC paid at rates of 1.2% and 1.3%, respectively.
The difference between the nominal income tax rate and the effective rate can be explained by the peculiarities of the company’s accounting policies, the existence of tax credits or liabilities, the application of special tax regimes, etc.
In 2022, a special tax regime began to apply for IT companies within the Diya.City residency. It allows you to choose special conditions of taxation with income tax, namely the exit capital tax at the rate of 9%. Companies could use this opportunity only starting from the second quarter of 2022. According to the plan, the exit tax should reduce the tax burden on companies.
In fact, the companies that became residents of Diia.City changed the effective tax rate in 2022 in different ways. At least three Ukrainian food companies have significantly reduced it: LLC “Fintech Band”, “Uaprom” and “Netcracker”. At the same time, it has not changed for other residents, and for some it has even increased.
With this material, we continue the series of publications dedicated to the review of the largest Ukrainian IT companies in 2022 by the amount of net income. The full version of the document, which provides information on the top 30 companies, is available at the link. The previous material of the series is here.