Subject The priorities of the State policy of the Russian Federation include a support to domestic production, increase in investment activities, and development of export-oriented industries. A special investment contract is a tool to encourage investment activities. It is relatively new and understudied, and needs further investigation. Objectives The aim of the paper is to highlight tax arrangements to support investment activities within special investment contracts, define the stimulating effect of these support measures and identify prospects for applying the mechanism to encourage investment in Russian regions. Methods I employ the marginal analysis, calculate the cost of capital of a corporate investor at the level of the Russian Federation, taking into account different tax regimes for corporate entities, including those provided when concluding a special investment contract in accordance with the federal and regional legislation. Conclusionsand Relevance Based on the calculated cost of capital, I conclude on the support that can be provided as part of special investment contracts to stimulate corporate investors.
Keywords: investment, encouragement, tax credit, tax incentives, special investment contract
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