Institutional environment for tax incentives for technological sovereignty

Abstract

The deepening of geopolitical contradictions and the growing importance of national technological sovereignty predetermine the relevance of the problem of creating a favourable institutional environment for a stimulating tax policy. The article argues that a favourable institutional environment for taxation in general, on the one hand, and for tax incentives for technological development and technological sovereignty, on the other, includes interrelated but different rules and restrictions. While a favourable tax environment in general, by making it easy to pay taxes, contributes to budgetary efficiency and stable economic growth, a favourable institutional environment for tax incentives for technological development adds specific policies, rules, and restrictions that facilitate the processes of tax assistance for innovation and technology. It is reasonable to assume that the further development of such an institutional environment requires the application of a risk-oriented approach to tax incentives, based on the recognition of uncertainty and the objectively high probability of failure inherent in innovation, especially in the field of critical technologies on which sovereignty is based. Among the measures for its implementation, it is recommended to use a “negative tax on R&D” – a financial incentive in the form of a tax credit or tax deduction that reduces the tax liabilities of businesses that invest in research and development, regardless of whether they have profits and income tax liabilities.