Yuliia О. Mazur, 78_04
Wednesday, 14 June 2017 03:32 | Author: Покотиленко Р.В. | 
Yuliia О. Mazur
PhD in Economics, The Institute of the Economy of Industry of the NAS of Ukraine
Address: 03057, Ukraine, Kyiv, 2 Gelabov Str.
E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
Tax incentives for R&D in emerging economy conditions: direction of reforms for Ukraine
Section: Macroeconomic and regional problems of industrial development
Ekon. promisl. 2017, 78(2): 61-79
https://doi.org/10.15407/econindustry2017.02.061
Language: Russian
| Full text (PDF)
| References:
1.OECD (2015). Main features of R&D tax incentives provisions in selected OECD and non OECD countries. Retrieved from: https://www.oecd.org/sti/rd-tax-incentives-provisions.pdf
2.OECD (2015). Compendium of R&D tax incentive schemes: OECD countries and selected economies. Retrieved from: https://www.oecd.org/sti/rd-tax-incentives-compendium.pdf
3.OECD (2016). Business and finance outlook 2016. Paris: OECD Publishing. Retrieved from: http://www.keepeek.com/ Digital-Asset-Management/oecd/finance-and-investment/oecd-business-and-finance-outlook-2016_9789264257573-en#page257
4.OECD (2016). R&D tax incentive indicators. Retrieved from: http://www.oecd. org/sti/rd-tax-incentive-indicators.htm
5.OECD (2015). Data: Real GDP forecast. Retrieved from: https://data.oecd. org/gdp/real-gdp-forecast.htm#indicator-chart
6.OECD (2011). Divided we stand: why inequality keeps rising. Paris: OECD Publishing. Retrieved from: http://www.keepeek.com/Digital-Asset-Management/oecd/social-issues-migration-health/the-causes-of-growing-inequalities-in-oecd-countries_9789264119536-en#.V9beVvqLSUk#page387
7.Transparency International (2015). Corruption perceptions index 2015. Retrieved from: https://www.iaca.int/images/ news/2016/Corruption_Perceptions_Index_2015_report.pdf
8.Democracy index 2015. Democracy in an age of anxiety: a report by the Economist Intelligence Unit. Retrieved from: http://www.yabiladi.com/img/content/EIU-Democracy-Index-2015.pdf
9.Heyts, V.M. Et al. (2015). Innovative Ukraine 2020: national report. Kyiv: NAS of Ukraine [in Ukrainian].
10.Moldovan, O.O., & Medvyedkova, N.S. About the feasibility of introducing tax mechanisms to encourage innovation and investment development in Ukraine: analytical note. Retrieved from: http://www.niss.gov.ua/articles/1315/ [in Ukrainian].
11.Moldovan, O.O. (2013). R&D tax incentive tools of corporate sector: international practice using. The Strategic Priorities, 3 (28), 38-45. [in Ukrainian].
12.Mazur, Yu.A. (2015). Tax regulation of investment-innovative development of the economy: an evolutionary ap¬pro¬ach. NAS of Ukraine, Institute of Economics of Industry. Kiev. Retrieved from: http://iep.donetsk.ua/publish/mono/Mazur.pdf [in Russian].
13.Mazur, Yu.O. (2016) Prospects of R&D tax incentives in Ukraine: experience of innovative developed countries. Econ. promisl., 2 (74), 33-48. Retrieved from: http://nbuv.gov.ua/UJRN/econpr_2016_2_5. [in Ukrainian].
14.Vyshnevskyy, V.P., Zbarazska, L.O., Zanizdra, M.Yu., Chekina, V.D., Et al. (2016). National model of neoindustrial development of Ukraine. NAS of Ukraine, Ins-titute of Economics of Industry. Kyiv. Re¬trieved from: http://iep.donetsk.ua/publish/ mono/Vishnevsky_Polovyan_Zbarazska_2016.pdf. [in Ukrainian].
15.Marchenko, O., Tkachenko, V. (2013). Directions of tax stimulation of innovative activity. Ekonomist. 1. pp. 13-17. [in Ukrainian].
16.Reddy, P. (2011). Global innova-tion in emerging economies. Ottawa: International Development Research Centre.
17.Jha, S., Dhanaraj, Ch., Krishan, R. (2015). How does multinational R&D evolve in emerging markets? Lausanne: IMD, 2015.
18.Brodzka, A. (2013). Tax incentives in emerging economies. Business Systems and Economics. 3 (1). pp. 26-36.
19.Tanzi, V., Zee, H.H. (2000) Tax policy for emerging markets: developing countries National Tax Journal. 53. № 2. pp. 299-322. DOI: 10.17310/ntj.2000.2.07
20.Zolt, E. (2015). Tax incentives: protecting the tax base. New York: Department of Economic and Social Affairs. Retrieved from: http://www.un.org/esa/ffd/wp-con-tent/uploads/2015/04/2015TIBP_PaperZolt.pdf
21.Department of Finance (2013). Review of R&D Tax Credit. Invitation for Submissions. Retrieved from: http://tax-policy.gov.ie/wpcontent/uploads/downloads/ 2013/04/Invitation-for-Submissions-for-Consultation-onRD-Tax-Credit.pdf
22.Rao, A. (2011). R&D tax credits. A tool to advance global health technologies? Washington: Center for Global Health R&D Policy Assessment.
23.OECD (2013). Raising the returns to innovation: structural policies for a knowledge-based economy. OECD Econom-ics Department Policy Notes. May. 17.
24.Deloitte (2015). 2015 Global sur-vey of R&D incentives. Retrieved from: https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-global-survey-of-research-and-development-incentives.pdf
25.Transparency International (2016). Corruption perceptions index 2015. Retrieved from: http://www.transparency.org/cpi2015/
26.Fichtner, J.J. Michel, A.N. (2015). Can a research and development tax credit be properly designed for economic efficiency? Washington: Mercatus Center - George Mason University.
27.Tyson, L. Linden, G. (2012). The corporate R&D tax credit and U.S. inno-vation and competitiveness. Gauging the economic and fiscal effectiveness of the credit. Washington: Center for American Progress. Retrieved from: http://usa.cciee.org.cn/WebSite/usa/Upload/File/201207/20120717203 427826500.pdf
28.United Nations Convention against Corruption (UNCAC). Retrieved from: https://www.unodc.org/unodc/en/treaties/CAC/ [in Russian].
29.The OECD Anti-Corruption Convention and the Working Group on Combating Acquisition. Retrieved from: http://www.oecd.org/daf/antibribery/oecdantibriberyconvention.htm [in Russian].
30.Council of Europe conventions and other relevant standards. Retrieved from: http://www.coe.int/t/dghl/monitoring/ greco/documents/instruments_en.asp [in Russian].
31.International Standards and Best Practices for Combating Corruption and Ethics of Public Officials. Retrieved from: http://www.oecd.org/cleangovbiz/ [in Russian].
32.Analytical reports of civil society organizations. Retrieved from: http://www.uncaccoalition.org/uncac-review/cso-review-reports [in Russian].
33.Hodgson, G.M., Knudsen, T. (2006). Why we need a generalized Darwin-ism, and why generalized Darwinism is not enough. Journal of Economic Behavior & Organization. 61. pp. 1-19. DOI: 10.1016/j.jebo.2005.01.004
34. Hodgson, G.M. (2008). How Veb-len generalized Darwinism. Journal of Eco-nomic Issues, 2 (XLII), 399-405. Retrieved from: www.jstor.org/stable/25511324. DOI: 10.1080/00213624.2008.11507148
35.Nizhegorodtsev R.M. Models of logistic dynamics as a tool for economic analysis and forecasting. Retrieved from: http://econ.asu.ru/lib/sborn/modec97/pdf/1_2.pdf [in Russian].
36.Klump, R., McAdam, P., Willman, A. (2007). Factor Substitution and Factor Augmenting Technical Progress in the US. Review of Economics and Statistics, 89 (1), 183-192.
37.Klump, R., McAdam, P., Willman, A. (2011). The Normalized CES Production Function. Theory and Empirics. ECB: Working Paper Series. 1294. 52 p.
38.The Global Innovation Index 2016. Winning with Global Innovation / Editors: S. Dutta, B. Lanvin, S. Wunsch-Vincent. Retrieved from: http://www.wipo.int/edocs/pubdocs/en/wipo_pub_gii_ 2016.pdf
PhD in Economics, The Institute of the Economy of Industry of the NAS of Ukraine
Address: 03057, Ukraine, Kyiv, 2 Gelabov Str.
E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
Tax incentives for R&D in emerging economy conditions: direction of reforms for Ukraine
Section: Macroeconomic and regional problems of industrial development
Ekon. promisl. 2017, 78(2): 61-79
https://doi.org/10.15407/econindustry2017.02.061
Language: Russian
Abstract:
One of the main features of tax incentives for R&D is the creation of certain benefits for society in general and industry enterprises in particular. This is achieved by attracting additional investments for the development of the innovative sphere of the economy. International practice confirms the effectiveness of tax mechanisms for stimulating R&D both in advanced economies and in those economies that are developing and considered as emergent. Governments use these mechanisms both as a tool to support broad R&D and as a targeted public policy to foster innovation in specific fields. The article is devoted to the justification of the expediency of using tax incentives for research and development for the innovative development of industrial enterprises in Ukraine.
The features of using the investment tax credits in the sphere of research and development in the conditions of the emergent economy are considered including the ease of implementation, attraction of the private investments, reducing the effective tax burden on businesses and so on. The main requirement of R&D investment tax credit should be the activity in the sphere of the scientific and technological progress.
The features of using the volume and incremental scheme of qualified expenses (income) in calculating the tax credit for investment in R&D in different countries of the world are identified. It was determined that the volume tax credit for investment in R&D is more appropriate for applying in developing countries because it is simple to use by enterprises
and to administrate by state and it contributes to the growth of profits of large enterprises, and, consequently, increases investment in research and development. In contrast to the incremental scheme aimed mainly at stimulating the small and medium-sized businesses, tax incentives for large enterprises by means of the volume tax credit for investment in R&D is a more effective tool for ensuring stable GDP growth rates in the conditions of socio-economic crisis.
The improved evolutionary approach to tax incentives for R&D is proposed. It is
aimed at researching the tax incentives for industrial enterprises in the context
of providing them with a volume tax credit for investment in R&D. It was determined
that the application of tax incentives in the field of research and development can
contribute to the growth of investment activity of enterprises and to accelerate their innovative development. The limited budget financing of industry in the country can be compensated, at least in part, with the help of such a tax policy tool as a volume tax credit for investment in R&D.
Keywords: tax incentives, R&D, innovative development, emerging economy, industrial enterprises, investment tax credit, qualified R&D expenditures, evolutionary approach.
JEL: E62, H21, H23, H25.
One of the main features of tax incentives for R&D is the creation of certain benefits for society in general and industry enterprises in particular. This is achieved by attracting additional investments for the development of the innovative sphere of the economy. International practice confirms the effectiveness of tax mechanisms for stimulating R&D both in advanced economies and in those economies that are developing and considered as emergent. Governments use these mechanisms both as a tool to support broad R&D and as a targeted public policy to foster innovation in specific fields. The article is devoted to the justification of the expediency of using tax incentives for research and development for the innovative development of industrial enterprises in Ukraine.
The features of using the investment tax credits in the sphere of research and development in the conditions of the emergent economy are considered including the ease of implementation, attraction of the private investments, reducing the effective tax burden on businesses and so on. The main requirement of R&D investment tax credit should be the activity in the sphere of the scientific and technological progress.
The features of using the volume and incremental scheme of qualified expenses (income) in calculating the tax credit for investment in R&D in different countries of the world are identified. It was determined that the volume tax credit for investment in R&D is more appropriate for applying in developing countries because it is simple to use by enterprises
and to administrate by state and it contributes to the growth of profits of large enterprises, and, consequently, increases investment in research and development. In contrast to the incremental scheme aimed mainly at stimulating the small and medium-sized businesses, tax incentives for large enterprises by means of the volume tax credit for investment in R&D is a more effective tool for ensuring stable GDP growth rates in the conditions of socio-economic crisis.
The improved evolutionary approach to tax incentives for R&D is proposed. It is
aimed at researching the tax incentives for industrial enterprises in the context
of providing them with a volume tax credit for investment in R&D. It was determined
that the application of tax incentives in the field of research and development can
contribute to the growth of investment activity of enterprises and to accelerate their innovative development. The limited budget financing of industry in the country can be compensated, at least in part, with the help of such a tax policy tool as a volume tax credit for investment in R&D.
Keywords: tax incentives, R&D, innovative development, emerging economy, industrial enterprises, investment tax credit, qualified R&D expenditures, evolutionary approach.
JEL: E62, H21, H23, H25.
| Full text (PDF)
| References:
1.OECD (2015). Main features of R&D tax incentives provisions in selected OECD and non OECD countries. Retrieved from: https://www.oecd.org/sti/rd-tax-incentives-provisions.pdf
2.OECD (2015). Compendium of R&D tax incentive schemes: OECD countries and selected economies. Retrieved from: https://www.oecd.org/sti/rd-tax-incentives-compendium.pdf
3.OECD (2016). Business and finance outlook 2016. Paris: OECD Publishing. Retrieved from: http://www.keepeek.com/ Digital-Asset-Management/oecd/finance-and-investment/oecd-business-and-finance-outlook-2016_9789264257573-en#page257
4.OECD (2016). R&D tax incentive indicators. Retrieved from: http://www.oecd. org/sti/rd-tax-incentive-indicators.htm
5.OECD (2015). Data: Real GDP forecast. Retrieved from: https://data.oecd. org/gdp/real-gdp-forecast.htm#indicator-chart
6.OECD (2011). Divided we stand: why inequality keeps rising. Paris: OECD Publishing. Retrieved from: http://www.keepeek.com/Digital-Asset-Management/oecd/social-issues-migration-health/the-causes-of-growing-inequalities-in-oecd-countries_9789264119536-en#.V9beVvqLSUk#page387
7.Transparency International (2015). Corruption perceptions index 2015. Retrieved from: https://www.iaca.int/images/ news/2016/Corruption_Perceptions_Index_2015_report.pdf
8.Democracy index 2015. Democracy in an age of anxiety: a report by the Economist Intelligence Unit. Retrieved from: http://www.yabiladi.com/img/content/EIU-Democracy-Index-2015.pdf
9.Heyts, V.M. Et al. (2015). Innovative Ukraine 2020: national report. Kyiv: NAS of Ukraine [in Ukrainian].
10.Moldovan, O.O., & Medvyedkova, N.S. About the feasibility of introducing tax mechanisms to encourage innovation and investment development in Ukraine: analytical note. Retrieved from: http://www.niss.gov.ua/articles/1315/ [in Ukrainian].
11.Moldovan, O.O. (2013). R&D tax incentive tools of corporate sector: international practice using. The Strategic Priorities, 3 (28), 38-45. [in Ukrainian].
12.Mazur, Yu.A. (2015). Tax regulation of investment-innovative development of the economy: an evolutionary ap¬pro¬ach. NAS of Ukraine, Institute of Economics of Industry. Kiev. Retrieved from: http://iep.donetsk.ua/publish/mono/Mazur.pdf [in Russian].
13.Mazur, Yu.O. (2016) Prospects of R&D tax incentives in Ukraine: experience of innovative developed countries. Econ. promisl., 2 (74), 33-48. Retrieved from: http://nbuv.gov.ua/UJRN/econpr_2016_2_5. [in Ukrainian].
14.Vyshnevskyy, V.P., Zbarazska, L.O., Zanizdra, M.Yu., Chekina, V.D., Et al. (2016). National model of neoindustrial development of Ukraine. NAS of Ukraine, Ins-titute of Economics of Industry. Kyiv. Re¬trieved from: http://iep.donetsk.ua/publish/ mono/Vishnevsky_Polovyan_Zbarazska_2016.pdf. [in Ukrainian].
15.Marchenko, O., Tkachenko, V. (2013). Directions of tax stimulation of innovative activity. Ekonomist. 1. pp. 13-17. [in Ukrainian].
16.Reddy, P. (2011). Global innova-tion in emerging economies. Ottawa: International Development Research Centre.
17.Jha, S., Dhanaraj, Ch., Krishan, R. (2015). How does multinational R&D evolve in emerging markets? Lausanne: IMD, 2015.
18.Brodzka, A. (2013). Tax incentives in emerging economies. Business Systems and Economics. 3 (1). pp. 26-36.
19.Tanzi, V., Zee, H.H. (2000) Tax policy for emerging markets: developing countries National Tax Journal. 53. № 2. pp. 299-322. DOI: 10.17310/ntj.2000.2.07
20.Zolt, E. (2015). Tax incentives: protecting the tax base. New York: Department of Economic and Social Affairs. Retrieved from: http://www.un.org/esa/ffd/wp-con-tent/uploads/2015/04/2015TIBP_PaperZolt.pdf
21.Department of Finance (2013). Review of R&D Tax Credit. Invitation for Submissions. Retrieved from: http://tax-policy.gov.ie/wpcontent/uploads/downloads/ 2013/04/Invitation-for-Submissions-for-Consultation-onRD-Tax-Credit.pdf
22.Rao, A. (2011). R&D tax credits. A tool to advance global health technologies? Washington: Center for Global Health R&D Policy Assessment.
23.OECD (2013). Raising the returns to innovation: structural policies for a knowledge-based economy. OECD Econom-ics Department Policy Notes. May. 17.
24.Deloitte (2015). 2015 Global sur-vey of R&D incentives. Retrieved from: https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-global-survey-of-research-and-development-incentives.pdf
25.Transparency International (2016). Corruption perceptions index 2015. Retrieved from: http://www.transparency.org/cpi2015/
26.Fichtner, J.J. Michel, A.N. (2015). Can a research and development tax credit be properly designed for economic efficiency? Washington: Mercatus Center - George Mason University.
27.Tyson, L. Linden, G. (2012). The corporate R&D tax credit and U.S. inno-vation and competitiveness. Gauging the economic and fiscal effectiveness of the credit. Washington: Center for American Progress. Retrieved from: http://usa.cciee.org.cn/WebSite/usa/Upload/File/201207/20120717203 427826500.pdf
28.United Nations Convention against Corruption (UNCAC). Retrieved from: https://www.unodc.org/unodc/en/treaties/CAC/ [in Russian].
29.The OECD Anti-Corruption Convention and the Working Group on Combating Acquisition. Retrieved from: http://www.oecd.org/daf/antibribery/oecdantibriberyconvention.htm [in Russian].
30.Council of Europe conventions and other relevant standards. Retrieved from: http://www.coe.int/t/dghl/monitoring/ greco/documents/instruments_en.asp [in Russian].
31.International Standards and Best Practices for Combating Corruption and Ethics of Public Officials. Retrieved from: http://www.oecd.org/cleangovbiz/ [in Russian].
32.Analytical reports of civil society organizations. Retrieved from: http://www.uncaccoalition.org/uncac-review/cso-review-reports [in Russian].
33.Hodgson, G.M., Knudsen, T. (2006). Why we need a generalized Darwin-ism, and why generalized Darwinism is not enough. Journal of Economic Behavior & Organization. 61. pp. 1-19. DOI: 10.1016/j.jebo.2005.01.004
34. Hodgson, G.M. (2008). How Veb-len generalized Darwinism. Journal of Eco-nomic Issues, 2 (XLII), 399-405. Retrieved from: www.jstor.org/stable/25511324. DOI: 10.1080/00213624.2008.11507148
35.Nizhegorodtsev R.M. Models of logistic dynamics as a tool for economic analysis and forecasting. Retrieved from: http://econ.asu.ru/lib/sborn/modec97/pdf/1_2.pdf [in Russian].
36.Klump, R., McAdam, P., Willman, A. (2007). Factor Substitution and Factor Augmenting Technical Progress in the US. Review of Economics and Statistics, 89 (1), 183-192.
37.Klump, R., McAdam, P., Willman, A. (2011). The Normalized CES Production Function. Theory and Empirics. ECB: Working Paper Series. 1294. 52 p.
38.The Global Innovation Index 2016. Winning with Global Innovation / Editors: S. Dutta, B. Lanvin, S. Wunsch-Vincent. Retrieved from: http://www.wipo.int/edocs/pubdocs/en/wipo_pub_gii_ 2016.pdf
