Taxation Instruments for the Support of Research and Advanced Development Expenses in the Manufacturing Sector of the Economy

Abstract

The goal of this research is studying the results achieved by using the existing taxation instruments regulating the creation of R&D expenses during the profits tax calculation and payment in the manufacturing sector of the economy of the Russian Federation. The main methods of this research are the analysis and the generalization of regulatory documents, as well as the mathematical representation based on the extrapolation of empiric data on the structure of R&D expenses incurred within 2012-2018 on the profit tax base. In terms of expense tracking, Russian tax legislation prescribes complicated procedures for R&D expenses accounting taking into consideration such limitation as using a minimum of 75% of the labor costs. The mechanism of fiscal expansion for the innovative activities in terms of R&D is separate from the methods of innovation process implementation, including the product life cycle phases and innovation process stages. Due to this, it is important to treat manufacturing enterprises as a separate category, because their operations are innovation-active. In practice, we suggest expanding the existing list of innovative activities in strategic areas of the country’s economic safety in order to increase the rates of high-end technology introduction in manufacturing.

Effects of Fiscal and Tax Policies on Stimulating the Development of Advanced Manufacturing Industry Clusters

“…Concentrated in key areas and critical links of the industrial chain [2], these clusters have demonstrated remarkable resilience, exceptional innovation capabilities and unmistakable leadership, thereby becoming a vital force in achieving sustained industrial growth, bolstering the core incentives of the manufacturing sector and safeguarding the stability of industrial supply chains [3]. Therefore, it is imperative to examine the impact of local fiscal and tax incentives on industrial clusters [4] and to further refine the support system for cluster policies, particularly in the realms of finance and taxation [5,6].…”