Subject. The article addresses the tax expenditure of the State in the framework of the corporate income tax, aimed at encouragement of investments. Objectives. The purpose of the study is to assess the impact of stimulating tax expenses for corporate income tax on the volume and structure of investments in fixed capital within the framework of the current legislation and in the context of the ongoing tax reform in the Russian Federation. Methods. The study employed general scientific research methods, methods of economic analysis, correlation and regression analysis. Results. The paper analyzes State tax expenditures for 2016–2023 and the forecast period for 2024–2026 under the current legislation. It assesses the planned changes in the corporate income tax as part of the ongoing tax reform, presents a regression model to reflect the impact of stimulating tax expenditures of the State on corporate income tax for investments in fixed assets. Conclusions. Higher corporate income tax rates (up to 25%) may reduce investment activity of businesses that do not have access to investment tax benefits. There will be increased interest in applying reduced tax rates in both legal and illegal ways. Therefore, the federal investment tax deduction should be provided to a wide category of taxpayers, and the availability of borrowed funds for the implementation of priority investment projects should be ensured.
Keywords: tax incentives, corporate income tax, income effect, substitution effect, tax expenses
References:
Abramishvili N.R., Andrianov A.Yu., Bun'ko V.A. et al. Nalogovoe stimulirovanie investitsionnoi aktivnosti rossiiskikh predpriyatii: determinanty, instrumentarii: monografiya [Tax incentives for the investment activity of Russian enterprises: Determinants, tools: a monograph]. St. Petersburg, Politekh-Press Publ., 2021, 226 p.
Pokrovskaya N.V., Razuvaeva A.A. [Demand of organizations for accelerated return of capital investments in profit taxation in Russia]. Nauchnyi vestnik Yuzhnogo instituta menedzhmenta = Scientific Bulletin of the Southern Institute of Management, 2020, no. 2, pp. 57–62. URL: Link (In Russ.)
Panskov V.G. [Tax incentives for investment activity]. Nauchnye trudy Vol'nogo ekonomicheskogo obshchestva Rossii = Scientific Works of the Free Economic Society of Russia, 2009, vol. 106, pp. 12–18. URL: Link (In Russ.)
Lykova L.N. [Tax incentives for support of investments: Russian history and current state]. Vestnik Instituta ekonomiki Rossiiskoi akademii nauk = Bulletin of the Institute of Economics of the Russian Academy of Sciences, 2020, no. 6, pp. 66–79. URL: Link (In Russ.)
Ovsyanko L.A., Chepeleva K.V., Borodina T.A. [The impact of the applied taxation regimes on the efficiency of agricultural organizations in the region]. Mezhdunarodnyi sel'skokhozyaistvennyi zhurnal = International Agricultural Journal, 2022, no. 6, pp. 594–597. URL: Link (In Russ.)
Sokolov A.B. [Special investment contract as a tool to support technological modernization of the Russian economy]. Vestnik Instituta ekonomiki Rossiiskoi akademii nauk = Bulletin of Institute of Economics of the Russian Academy of Sciences, 2022, no. 3, pp. 182–194. URL: Link (In Russ.)
Tubanova Yu.B. [Conditions and features of the application of investment tax deduction for corporate income tax]. Nalogovaya politika i praktika = Tax Policy and Practice, 2021, no. 1, pp. 72–76. (In Russ.)
Maremkulov A.N. [The stabilization clause as an instrument of encouragement in law]. Pravo i gosudarstvo: teoriya i praktika = Law and State: Theory and Practice, 2023, no. 9, pp. 113–115. URL: Link (In Russ.)
Orihara M., Suzuki T. Windfalls? Costs and benefits of investment tax incentives due to financial constraints. Journal of Corporate Finance, 2023, vol. 82, 102469. URL: Link
Eichfelder S., Jacob M., Schneider K. Do tax incentives affect investment quality? Journal of Corporate Finance, 2023, vol. 80, 102403. URL: Link
Anjos M.R., Mimoso M.J. Free Competition in EU: An Exploratory Study about Tax Benefits to Foreign Investment as a Distortion Measure of Free Competition. International Investment Law Journal, 2021, vol. 1, iss. 1, pp. 38–48.
Dahliah D., Tjan J.S., Aulia F.D. Implementation Evaluation Tax Holiday and Tax Allowance Policies on the Growth of Foreign Investment. Atestasi, Jurnal Ilmiah Akuntansi, 2022, vol. 5, no. 2, pp. 334–346. URL: Link
Pinskaya M.R., Steshenko Yu.A. [Investment tax incentives in Russia: Legislative regulation]. Ars Administrandi, 2024, vol. 16, no. 1, pp. 172–197. URL: Link (In Russ.)
Mandroshchenko O.V., Tatarenko A.M. [Implementation of foreign experience in using tax incentives for investments in industrial technologies in Russia]. Imushchestvennye otnosheniya v Rossiiskoi Federatsii = Property Relations in the Russian Federation, 2023, no. 7, pp. 24–31. URL: Link (In Russ.)
Staroverova O.V. [Tax incentives for investment activities]. Nauchnye issledovaniya i razrabotki. Ekonomika firmy = Scientific Research and Development. Economics of the Firm, 2023, vol. 12, no. 1, pp. 31–36. (In Russ.)
Shatalov S.D., Pinskaya M.R., Steshenko Yu.A. [Best practices for providing tax benefits for investments]. Uchenye zapiski Mezhdunarodnogo bankovskogo instituta = Scientific Notes of the International Banking Institute, 2022, no. 4, pp. 7–23. (In Russ.)
Goncharenko A.E. [Tax incentives for investment activity in Russia: Problems and development prospects]. Vestnik Altaiskoi akademii ekonomiki i prava = Bulletin of Altai Academy of Economics and Law, 2024, no. 3-1, pp. 32–36. (In Russ.)
Pinskaya M.R., Steshenko Yu.A., Tsagan-Mandzhieva K.N. [Evaluation of the effectiveness of investment tax incentives in Russia]. Journal of Applied Economic Research, 2023, vol. 22, no. 3, pp. 522–550. (In Russ.)
Holcomb A., Mason P., Zhang H.H. Investment income taxes and private equity acquisition activity. Journal of Empirical Finance, 2020, vol. 59, pp. 25–51. URL: Link
