№ 7/2019

Fìnansi Ukr. 2019 (7): 35–51https://doi.org/10.33763/finukr2019.07.035

PUBLIC FINANCE MANAGEMENT

KRYSOVATYY Andrij ¹, KOSHCHUK Tetiana ², VATAHOVYCH Mykhailo ³

¹West Ukrainian National University, Research ID : http://www.researcherid.com/rid/H-5477-2017
OrcID ID : https://orcid.org/0000-0002-5850-8224
²SESE “The Academy of Financial Management”
OrcID ID : https://orcid.org/0000-0003-1013-4603
³Ternopil National Economic University

Tax and budget support for producers in the context of EU state aid legislation

The influence of the EU legislation in the field of state aid on application of measures of fiscal support for producers in the territory of European integration is analyzed. It is established that EU state aid rules regulate the implementation of only those support instruments that meet the criteria for their recognition of state aid: it is granted by the state or through state resources; the measure creates an advantage to its addressees and selectivity; the measure distorts or threatens competition, or affects trade in the EU. A simplified approach to providing de minimis aid and horizontal support for business entities to encourage the activity desirable for the European Union and the limitation of the provision of most types of state aid to particular sectors of the economy are applied. It is substantiated that in the context of the implementation of the EU-Ukraine Association Agreement, the urgency of the use of regional investment state aid, state aid to small and medium-sized enterprises (according to the criteria for classification of enterprises by size which are in force in the EU), state aid for environmental protection and energy, state aid for research and development and innovation (primarily through the provision of tax incentives for investment and innovation) will be strengthened. In addition, the wide “field for maneuvers” in the implementation of measures of fiscal support for producers also leaves the possibility of applying a simplified procedure for state aid in the amount of up to 200 thousand euros for one enterprise over a three-year period. Instead, for our state the scope of application of fiscal support for business entities by sectoral principle (excluding agricultural producers) is limited, especially in the form of aid to support current activity, restoration of solvency and restructuring.

Keywords:state aid to economic entities, tax and budget support of producers, horizontal and sectoral state aid, regional investment state aid, tax incentives

JEL: Н25, Н32, Н54

Krysovatyy A. . Tax and budget support for producers in the context of EU state aid legislation / A. . Krysovatyy, T. . Koshchuk, M. Vatahovych // Фінанси України. - 2019. - № 7. - C. 35-51.

Article original in Ukrainian (pp. 35 - 51)

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