"It can be a trigger for people to leave." Andriy Yavorsky, GlobalLogic — on the price of NBU policy and the issue of IT specialists traveling abroad

This year, the IT industry in a pessimistic scenario can provide $7 billion in export revenues. At the same time, there are a number of factors that prevent the industry and the Ukrainian economy from developing: the lack of booking specialists, business travel, as well as the acquisition of the status of a tax resident of another country by IT specialists. This was announced on June 1 at the IT Media Club by Andrey Yavorsky, senior vice president for strategy and technology at GlobalLogic. DOU publishes its key theses.

"This year, Ukrainian IT in a pessimistic scenario can provide експорт 7 billion in export revenues." Last year, the IT sector brought about 6 6.8 billion in export revenues to Ukraine. IT ranked third in the overall service export rating. And, most likely, it will become No. 1 this year. For the first calendar quarter of 2022, IT brought in about.2 billion. This was a record figure for the entire history of the industry — there was an increase of almost 30%, [compared to the previous period]. If there was no war, each subsequent quarter would be larger than the first. And this year IT should generate from експорт 8 billion or more in export revenues. This is a significant increase that would help the Ukrainian economy, create direct and indirect jobs (after all, there are 3-4 indirect jobs per engineer), and so on. Due to the war, according to various estimates, the IT business sank by 5-10%. Accordingly, we can expect експорт 1.7 billion in export revenues in the next quarter. Although a further decline is also possible, because the influx of new projects is weak. Accordingly, according to pessimistic forecasts, the industry will generate about.7 billion this year. I want to believe that the industry will not fall and we will make 7 7.5 billion. In addition, the billion that we lost because of Russia can be used up thanks to companies that relocated here [from enemy territories]. "Now this is the price of preserving the banking system." The NBU's multiple exchange rates during the three months of the war were correct: there was no collapse, the economy continues to work. However, we have warnings that we voiced at the meeting of representatives of the export business with the NBU leadership. This, in particular, concerns the unfair situation regarding IT engineers [in the issue of the National Bank's currency policy]. This does not help the industry and leads to the fact that a number of people who are already abroad or can work remotely for foreign companies can provide services outside the tax legislation of Ukraine. The NBU said that there is no single good answer. But now, as far as I can see, there is a consensus. The NBU was able to influence commercial banks in a certain way, and write-off rates did not go sky-high. The difference in the exchange rate now is 5-10%, as it was before the adopted Resolution. [The current currency policy of the NBU] may become an additional trigger so that people either do not want to stay in Ukraine now, or leave there later, disappointed. At the same time, an artificially low exchange rate affects tax revenues, because the money that enters Ukraine is sold at an undervalued exchange rate. GlobalLogic slightly postponed the payment of compensation to colleagues, but now we see that the NBU does not intend to reconsider its decision. Accordingly, we plan to resume compensation this week or next. Let's return to payments at the exchange rate set by the NBU, and we will carefully monitor the situation. We understand that there is a war going on and now this is the price of preserving the banking system. "The Ministry of economy helped to move the issue forward." About business trips abroad and booking IT specialists it needs stability and predictability. Our partners take into account the risks, so they would like to have guarantees from the industry that we will fulfill our promise. First, we need a key employee booking mechanism to demonstrate that customers have nothing to worry about. Secondly, we need a mechanism for temporary travel abroad. It is impossible to work globally for export, constantly being inside the country. The Ministry of economy helps us solve these issues, which helped move the issue of business travel from a dead end. I hope that soon we will reach the necessary conditions: there is an understanding that IT is a critical industry that helps in supporting the economy, and it needs to be helped. This also includes the issue of the NBU exchange rate. I would like to receive notifications about changes in advance, so that there are no waves of panic and demotivation. "There is no consensus." We sent letters about negotiations with the European Union regarding the tax residency of IT specialists abroad to the countries with the highest concentration of Ukrainians who left because of the war. They were asked that these people should not become their tax residents after 180 days of stay on the territory of a particular state. This applies to people who are there as temporarily displaced persons. They work remotely in Ukraine, so it is better that they continue to pay taxes to our budget, because this helps the economy work. And abroad, these people buy food, rent housing, that is, they have a positive impact on the economic activity of the countries where they find themselves. What to do with those who have already been abroad for more than 180 days and have already become tax residents of other countries? There is no consensus. Most people cooperate with US based on the FLP model. We can't even tell where they are, we can't check it out. Therefore, we are still looking for a solution to this situation. But since most of the IT industry operates under this model, the tax obligations of sole proprietors who stay in another country for more than 180 days are on the side of the sole proprietor, not the business. In European countries, there is also an analog of FLP. I think the EU is also not ready to resolve this issue. After all, according to various estimates, there are more than 5 million such people abroad. Of course, our government should be interested [in resolving this issue], because this is our tax base. I hope that everything will be settled soon.