Prospects for Use of Tax Incentives to Encourage Investment Activities in Russian Federation in Case of Investors’ Losses

Abstract

Andrey Alexandrovich German -E-mail: marteleur@yandex.ru

Subject: Support of is among of the priorities of the state policy of the Russian Federation. In order to encourage investment activities various support tools are developed. Simultaneously the investments rather entail losses in the process of investment, as well as at the start of production. Therefore, the topic of application of tax incentives when incurring losses is interesting for analysis.

Objectives: This article is aimed at the highlighting of certain tax investment support measures, the definition of the stimulating effect of these support measures when investors incur losses and the development of prospects for the development of measures to support investors that incur losses.

Methodology: In order to determine the prospects for the development of measures to support investors that incur losses the simulation of a firm’s activities according to the “European Tax Analyzer” approach is applied. The return and value of firm after taxation with application of various tax incentives both in the aggregate and in isolation are calculated.

Conclusions: Based on the calculated return and value of firm after taxation a conclusion has been made about the support measures that can be installed in order to provide the most stimulating effect on investors in the period of incurring losses.