O. Klymenko, S. Mala, Н. Matviienko. International investment position of Ukraine: possibilities for improvement in the context of tax policy changes.

Abstract

This article is devoted to the analysis of Ukraine’s International Investment Position (IIP) for the purpose of identifying ways to improve it. The authors investigated the IIP of the main countries of the world. They identified the countries of the European Union with the highest net IIP deficit relative to GDP.  This article analyzes the dynamics and structure of Ukraine’s assets and liabilities to determine how they came to be.  This article also identifies the main risks, advantages, and disadvantages of foreign direct investment flows in Ukraine. The article will suggest that improved fiscal policy, including tax legislation, will enhance Ukraine’s IIP.  A sound tax policy promotes foreign investments into the country’s economy, can structurally improve the investment position, and prevents uncontrolled capital outflow.  It is necessary to adopt a package of anti-Base Erosion and Profit Shifting (BEPS) laws against tax evasion and against disclosure of other property information to implement the capital transfer tax.  The article identifies the main advantages of this model of taxation.