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Tax Incentives under Sanctions: Evidence from Russian Tax Authorities

Author

Listed:
  • Nam T. Vu

    (Miami University)

  • Kiet Tuan Duong

    (University of York)

  • Luu Duc Toan Huynh

    (Queen Mary University of London)

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.

Suggested Citation

  • Nam T. Vu & Kiet Tuan Duong & Luu Duc Toan Huynh, 2025. "Tax Incentives under Sanctions: Evidence from Russian Tax Authorities," Working Papers 121, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    • Handle: RePEc:cgs:wpaper:121
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    File URL: http://cgr.sbm.qmul.ac.uk/CGRWP121.pdf
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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