Tax Incentives for Innovation in the Construction Industry: Economic Nature, Design of Fiscal Instruments and Possibilities for Adapting International Experience in Ukraine

Abstract

In the context of the transformation of the global economy, innovation-driven development has become a key factor in strengthening the competitiveness of national economies and ensuring structural modernization of industries. This issue is especially relevant for the construction sector, which is characterized by high capital intensity of technological innovations and significant financial risks. Innovation not only drives productivity growth but also shapes the long-term resilience of industrial sectors in the face of global economic challenges.

Tax incentives are considered one of the most effective public policy instruments for stimulating private investment in research and development and technological modernization. The study is based on methods of scientific abstraction, systemic and institutional analysis, and comparative analysis of international innovation policy experience.

The research analyzes the economic nature of tax incentives as tools of state innovation policy and identifies key fiscal mechanisms used in international practice, including R&D tax credits, accelerated depreciation of innovative equipment, and preferential tax regimes for intellectual property income. Empirical studies demonstrate that such instruments can significantly increase private investment in innovation and accelerate the adoption of new technologies across industries.

Particular attention is given to the sectoral features of innovation processes in the construction industry, where technological modernization requires substantial investment and institutional support. The study substantiates the role of fiscal instruments in creating economic conditions for technological modernization and emphasizes the importance of adapting international experience to the Ukrainian context. Effective implementation of tax incentives also depends on strong coordination between public authorities and private stakeholders.

The findings show that tax incentives are an important component of modern innovation policy and can contribute to the technological transformation and sustainable development of the construction sector in Ukraine. Properly designed fiscal instruments can enhance both the efficiency and competitiveness of the industry while supporting broader economic growth objectives.