The Impact of Preferential Taxation on the Stimulation of Investment Processes in Ukraine in the Context of the Experience of EU Member States

Abstract

In modern conditions, one of the main tasks of the fiscal mechanism is to create favorable conditions for maintaining and activating investment processes at the micro level. Thanks to tax incentives as a leading element of the fiscal mechanism, the state influences the amount of financial resources that are at the disposal of taxpayers − legal entities and individuals - and can be used for investment. Therefore, the purpose of the study was to evaluate the use of tax incentives to ensure the investment development of enterprises and households in EU member states and in Ukraine; to conduct SWOT analysis of investment tax incentives, and to find opportunities to further improve of their management. The study substantiates the content of tax incentives and the conditions of their use to activate investment processes at the micro level. The experience of EU member states in the use of different ways of tax stimulation of investments of legal entities and individuals is generalized. The tax incentives introduced in Ukraine are considered and the key problems of their existence are described in the context of stimulating the investment activity of taxpayers. SWOT analysis of investment tax incentives was carried out, which helped to identify the positive and negative impact of the external and internal environment on their implementation. The necessity and principles of management of investment preferential taxation are established. Improvement of the management of providing investment tax incentives in Ukraine is proposed on the basis of taking into account the experience of EU member states. It has been proven that the purposeful use of tax incentives stimulates the investment activity of households and economic entities, so Ukraine’s use of the experience of EU countries to solve the problems of providing tax incentives to individuals and legal entities will eventually lead to the intensification of investment processes at the micro level.