Tax Incentives under Sanctions: Evidence from Russian Tax Authorities

Nam T. Vu (), Kiet Tuan Duong () and Luu Duc Toan Huynh ()
Additional contact information
Nam T. Vu: Miami University
Kiet Tuan Duong: University of York
Luu Duc Toan Huynh: Queen Mary University of London

No 121, Working Papers from Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research

Abstract: We examine how access to tax incentives may serve as a novel channel through which firms can alleviate the effects of economic sanctions. By leveraging the universe of more than eight million unique Russian firm-year observations from 2000 to 2023, we show that firms receiving tax incentives the year prior to the sanctions imposed on Russia in 2014 exhibit higher capital investments and return on assets than firms without such incentives. These improved outcomes are shown to be linked to the corresponding increases in both revenue and profits and a decrease in their overall labor costs ex-post.

Keywords: Russian; sanctions; tax incentives (search for similar items in EconPapers)
JEL-codes: F51 H25 H71 (search for similar items in EconPapers)
Pages: 63 pages
Date: 2025-04
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Persistent link: https://EconPapers.repec.org/RePEc:cgs:wpaper:121

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