INVESTMENT TAX CREDIT AS AN INSTRUMENT FOR THE HARMONIZATION OF PRIVATE AND PUBLIC INTERESTS
The article is devoted to the research of the issue of stimulating investment and innovation activity of economic entities by one of the modern tools of intensification of such an activity – investment tax credit through the prism of harmonization of private and public interests. The urgency of this topic, as well as the necessity to develop and implement such a mechanism in fiscal and economic practice, is explained, in particular, by the low level of innovation of the Ukrainian economy, the high degree of moral and physical depreciation of fixed capital and Ukraine's integration processes in the world markets, that impose increased requirements on quality and competitiveness of domestic products. As a result, there is a growing social need for attracting investment in research, development of new technologies, innovative and modernization of fixed assets, as well as for expanding of the use of the resource-efficient and energy-efficient technologies and manufacturing of the up-to-date high-value-added products.
In the framework of this goal, the article analyzes the essential and preferential aspects and features of the investment tax credit in the context of its harmonization potential in terms of reconciling of the investment interests of the two key subjects of fiscal relations – taxpayers and the state. In particular, the advantages of such an instrument for the state and society, on the one hand, and its attractiveness for business entities, on the other, are revealed.
In the framework of the study, the authors studied, analyzed and compared the characteristics of the mechanism and the results of the application of investment tax credit in the developed countries (USA, Canada, Great Britain, Japan and France). Thus, the presence of certain common and distinctive features has been revealed. The common features are the lack of both the payment and the need to repay the loan. As to the distinctive ones, the authors outline three approaches to the application of this privilege: the reduction in the amount of corporate income tax; the reduction of profits subject to taxation; the return of previously invested funds. In addition, in each mechanism there are inherent features of the volume of such a tax discount that, in particular, depends on the size of the enterprise (small, medium, large), and restrictions on its application.
Also, the article presents the analysis of the domestic legislative initiatives on the practical implementation and application of investment tax credit in Ukraine, in which the authors identified a number of weaknesses that may affect the effectiveness of such a mechanism or even compromise it.
The result of this study is the development of its own model of investment tax credit, created on the basis of the foreign experience, taking into account the Ukrainian realities, which would potentially contribute to the harmonization of private and public interests both in the field of taxation and in the sphere of investment and innovative development of socio-economic relations in our country.
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Keywords: investment tax credit, harmonization of interests, private interests, public interests, investments and innovations, corporate income tax, expansion of tax base, increase of economic efficiency, research and development works (R&D), macroeconomic moderniz |
MACROECONOMICS
Lubkovskyi Serhii
SHEI «Kyiv National Economic University named after Vadym Hetman»
Dorosh Bohdan
student Taras Shevchenko National University of Kyiv
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