Tax Holidays as an Upcoming Tool of Tax Incentive for Business Renewal

Purpose The purpose of the paper is to study modern Russian practice to grant tax holidays for entrepreneurship, substantiate the practicability of application as a tool of tax incentive for business renewal in modern Russia, reveal barriers and develop recommendations for its successful introduction in Russian tax practice. Methodology In the study we employed a complex of general scientific methods and the method of trend analysis. With their help we investigated trend data of Russian business renewal in 2007–2018. Information and analytical background of the study was a statistical data of Federal State Statistics Service of the Russian Federation (Rosstat), INSEAD, Cornell University, World Intellectual Property Organization and Federal Tax Service of the Russian Federation. Results It is revealed that since 2008 tax preferences have been applied for the purposes of tax incentive to upgrade entrepreneurship. However, they become a tax credit that is much less incentive than tax holidays. Recommendations To overcome the barrier on the way of tax holidays for tax incentive of Russian business renewal (related to tax evasion), we developed a proprietary algorithm.