Competitiveness of the Serbian Economy Through the Prism of Tax Incentives for Foreign Investors
Main Article Content
Abstract
In order to make Serbia the most attractive investment destination in relation to countries in the region, special attention should be paid to the current tax incentives granted to foreign investors. Hence, the aim of this paper is to find the opinion and attitudes of foreign investors in the relevant research and analysis regarding the importance of tax relief for their investment in Serbia. Tax incentives are one of the most important tax instruments that can play a decisive role on foreign investors when choosing an investment location, and therefore to increase the competitiveness of the Serbian economy. In this paper, special attention will be given to tax incentives in certain areas for the business of foreign investors, depending on the way foreign investors enter the Serbian market. The methodology of empirical research in this paper is based on a quantitative approach to the collection of primary data through the survey of relevant subjects, the comparison of collected data, and the analysis of the causality of the investigated phenomena. On the basis of the obtained results it can be concluded that the greatest influence on the investor when making a decision on investing in Serbia is tax incentives in corporate income tax.
Article Details
Section
Articles
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Once the manuscript is accepted for publication, authors shall transfer the copyright to the publisher. If the submitted manuscript is not accepted for printing by the journal, the authors shall retain all their rights. The following rights on the manuscript are transferred to the publisher, including any supplementary materials and any parts, extracts or elements of the manuscript:
- the right to reproduce and distribute the manuscript in printed form, including print-on-demand;
- the right to print prepublications, reprints and special editions of the manuscript;
- the right to translate the manuscript into other languages;
- the right to reproduce the manuscript using photomechanical or similar means including, but not limited to photocopy, and the right to distribute these copies;
- the right to reproduce and distribute the manuscript electronically or optically using and all data carriers or storage media, and especially in machine readable/digitalized form on data carriers such as hard drive, CD-ROM, DVD, Blu-ray Disc (BD), Mini Disc, data tapes, and the right to reproduce and distribute the article via these data carriers;
- the right to store the manuscript in databases, including online databases, as well as the right to transmit the manuscript in all technical systems and modes;
- the right to make the manuscript available to the public or to closed user groups on individual demand, for use on monitors or other readers (including e-books), and in printable form for the user, either via the Internet, online service, or via internal or external networks.
References
Baskaran, Thushyanthan, Feld, Lars P., and Schnellenbach, Jan. 2016. “Fiscal federalism,
decentralization, and economic growth: a meta-analysis”. Economics Inquiry, 54 (3): 1445-
1463.
Castro, Vitor. 2011. “The impact of the European Union fiscal rules on economic growth.” Journal
of Macroeconomics, 33: 313–326.
Chu, Angus, and Yang, C. 2012. “Fiscal centralization versus decentralization: Growth and
welfare effects of spillovers, Leviathan taxation, and capital mobility.” Journal of Urban
Economics, 71: 177–188.
Collis, David, Young, David, and Goold, Michael. 2012. “The Size and Composition of Corporate
Headquarters in Multinational Companies: Empirical Evidence.” Journal of International
Management, 18: 260–275.
Cooper, David J., and Ezzamel, Mahmoud. 2013. “Globalization discourses and performance
measurement systems in a multinational firm.” Accounting, Organizations and Society, 38: 288–
313.
Davies, Ronald B., and Voget, Johannes. 2008. “Tax Competition in an Expanding European
Union.” Oxford University Centre for Business Taxation Working Paper No. 08-03.
Domazet, Ivana, and Marjanović, Darko. 2018. “FDI as a Factor of Improving the
Competitiveness of Developing Countries: FDI and Competitiveness.” International Monograph:
Foreign Direct Investments (FDIs) and Opportunities for Developing Economies in the World
Market, ed. Venkataramanaiah Malepati, 82-104. Hershey: IGI Global.
Domazet, Ivana, and Marjanović, Darko. 2017. „Tax incentives as a factor of economic growth.”
International Monograph: The state and the market in economic development: In Pursuit of
millennium development goals, 93-107. Brisbane: The International Institute of Development
Studies.
Domazet, Ivana, and Marjanović, Darko. 2016. “Improving the business environment in Serbia
through tax incentives for foreign investors.” Paper presented at the international scientific
conference of the Institute of Economic Science, Belgrade.
Easson, Alex, and Eric Zolt M. 2003. “Tax Incentives.” World Bank Institute, Washington D.C.
Eyraud, Luc, and Lusinyan, Lusine. 2013. “Vertical fiscal imbalances and fiscal performance in
advanced economies.” Journal of Monetary Economics, 60: 571–587.
Fernández-de-Córdoba, Gonzalo, and Torres, Jose L. 2012. “Fiscal harmonization in the
European Union with public inputs.” Economic Modelling, 29: 2024–2034.
Gurgul, Henryk, and Lach, Łukasz. 2014. “Globalization and economic growth: Evidence from
two decades of transition in CEE.” Economic Modelling, 36: 99–107.
Hansson, Åsa, and Olofsdotter Karin. 2003. „The effects of tax competition and new economic
geography on taxation in OECD countries.“, Department of Economics Lund University.
Harger, Kaitlyn, and Ross, Amanda. 2016. „Do capital tax incentives attract new businesses?
Evidence across industries from the new markets tax credit.“ Journal of Regional Science, 56 (5):
733-753.
Hatfield, John W. 2015. „Federalism, taxation, and economic growth.“ Journal of Urban
Economics, 87: 114-125.
Kalamov, Zarko Y. 2013. „Risk sharing and the efficiency of public good provision under tax
competition.“ Regional Science and Urban Economics, 43: 676–683.
Keen, Michael, and Konrad Kai A. 2012. „International Tax Competition and Coordination.“ Max
Planck Institute for Tax Law and Public Finance Working Paper 2012–06.
Li, Quan. 2016. “Fiscal decentralization and tax incentives in the developing world” Review of
International Political Economy, 23: 232-260.
Makrevska, Elena D. and Nenovski, Tome. 2014. “Competitiveness of the European Union: Precrisis Trends and Impact of the Financial Crisis.“ Economic Analysis, 47(3-4): 20-34.
Marjanović, Darko, Dragaš, Radovan, and Radojević, Predrag. 2013. “Competitiveness In The
Serbian Economy In The Period of Crisis.”, EMC2013 - Zrenjanin, 323-328.
Marjanović, Darko, and Pjanić, Miloš. 2012. “The Effects Of Tax Competition On The Operations
Of Multinational Companies.” EMC2012 - Zrenjanin, 211-216.
McCarthy, Killian, Van Doorn, Frederik, and Unger, Brigit. 2008. “Globalisation, tax
competition and the harmonisation of corporate tax rates in Europe: a case of killing the patient
to Cure the disease.” Utrecht School of Economics Discussion Paper Series 08-13.
Musabegović, Ismail, Galetin, Milena, and Mitić, Petar. 2015. “Foreign Direct Investments – the
Standard of Fair and Equitable Treatment of Investments on the Example of a Case of the
International Center for Settlement of Investment Disputes (ICSID)“. Economic Analysis, 48(1-
2): 86-97.
Owens, Jeffrey. 2006. “Fundamental Tax Reform: An International Perspective.” National Tax
Journal, 59(1): 131-164.
Paraušić, Vesna, Domazet, Ivana, and Simeunović, Ivana. 2017. “Analysis of the Relationship
Between the Stage of Economic Development and the State of Cluster Development.” Argumenta
Oeconomica, 39 (2): 279-305.
Patterson, Ben, and Serrano, Alicia M. 1998. “Tax competition in the Europen Union.” European
Parliament Working Paper ECON-105 EN.
Porter, Michael E. 2003. “The Economic Performance of Regions.” Regional Studies, 37 (6&7):
549–578.
Radičić, Marko, and Raičević, Božidar. 2011. „Javne finansije u teoriji i praksi.“ Data status,
Beograd.
Round, John. 2009. “Transitional Economies.” International Encyclopedia of Human Geography,
355-360.
Sedmihradsky, Milan, and Klazar, Stanislav. 2002. “Tax competition for FDI in CentralEuropean Countries”, CESifo Working Paper Series No. 647.
Siedschlag, Iulia, Smith, Donal, Turcu, Camelia, and Zhang, Xiaoheng. 2013. “What
determines the location choice of R&D activities by multinational firms?.” Research Policy, 42:
1420– 1430.
Tagkalakis, Athanasios. 2011. “Fiscal policy and financial market movements”, Journal of
Banking & Finance, 35: 231–251.
Talpos, Ioan, and Crasneac, Alexandru O. 2010. “The effects of tax competition.” Theoretical and
Applied Economics, XVII (8): 39-52.
Willis, Gavin. 2016. “Tax incentives and investment in the UK”. Oxford Economics Paper, 68 (2):
465-483.
Zolt, Eric. 2015. “Tax Incentives: Protecting the tax base”. Paper for Workshop on Tax Incentives
and Base Protection, United Nations, New York.
decentralization, and economic growth: a meta-analysis”. Economics Inquiry, 54 (3): 1445-
1463.
Castro, Vitor. 2011. “The impact of the European Union fiscal rules on economic growth.” Journal
of Macroeconomics, 33: 313–326.
Chu, Angus, and Yang, C. 2012. “Fiscal centralization versus decentralization: Growth and
welfare effects of spillovers, Leviathan taxation, and capital mobility.” Journal of Urban
Economics, 71: 177–188.
Collis, David, Young, David, and Goold, Michael. 2012. “The Size and Composition of Corporate
Headquarters in Multinational Companies: Empirical Evidence.” Journal of International
Management, 18: 260–275.
Cooper, David J., and Ezzamel, Mahmoud. 2013. “Globalization discourses and performance
measurement systems in a multinational firm.” Accounting, Organizations and Society, 38: 288–
313.
Davies, Ronald B., and Voget, Johannes. 2008. “Tax Competition in an Expanding European
Union.” Oxford University Centre for Business Taxation Working Paper No. 08-03.
Domazet, Ivana, and Marjanović, Darko. 2018. “FDI as a Factor of Improving the
Competitiveness of Developing Countries: FDI and Competitiveness.” International Monograph:
Foreign Direct Investments (FDIs) and Opportunities for Developing Economies in the World
Market, ed. Venkataramanaiah Malepati, 82-104. Hershey: IGI Global.
Domazet, Ivana, and Marjanović, Darko. 2017. „Tax incentives as a factor of economic growth.”
International Monograph: The state and the market in economic development: In Pursuit of
millennium development goals, 93-107. Brisbane: The International Institute of Development
Studies.
Domazet, Ivana, and Marjanović, Darko. 2016. “Improving the business environment in Serbia
through tax incentives for foreign investors.” Paper presented at the international scientific
conference of the Institute of Economic Science, Belgrade.
Easson, Alex, and Eric Zolt M. 2003. “Tax Incentives.” World Bank Institute, Washington D.C.
Eyraud, Luc, and Lusinyan, Lusine. 2013. “Vertical fiscal imbalances and fiscal performance in
advanced economies.” Journal of Monetary Economics, 60: 571–587.
Fernández-de-Córdoba, Gonzalo, and Torres, Jose L. 2012. “Fiscal harmonization in the
European Union with public inputs.” Economic Modelling, 29: 2024–2034.
Gurgul, Henryk, and Lach, Łukasz. 2014. “Globalization and economic growth: Evidence from
two decades of transition in CEE.” Economic Modelling, 36: 99–107.
Hansson, Åsa, and Olofsdotter Karin. 2003. „The effects of tax competition and new economic
geography on taxation in OECD countries.“, Department of Economics Lund University.
Harger, Kaitlyn, and Ross, Amanda. 2016. „Do capital tax incentives attract new businesses?
Evidence across industries from the new markets tax credit.“ Journal of Regional Science, 56 (5):
733-753.
Hatfield, John W. 2015. „Federalism, taxation, and economic growth.“ Journal of Urban
Economics, 87: 114-125.
Kalamov, Zarko Y. 2013. „Risk sharing and the efficiency of public good provision under tax
competition.“ Regional Science and Urban Economics, 43: 676–683.
Keen, Michael, and Konrad Kai A. 2012. „International Tax Competition and Coordination.“ Max
Planck Institute for Tax Law and Public Finance Working Paper 2012–06.
Li, Quan. 2016. “Fiscal decentralization and tax incentives in the developing world” Review of
International Political Economy, 23: 232-260.
Makrevska, Elena D. and Nenovski, Tome. 2014. “Competitiveness of the European Union: Precrisis Trends and Impact of the Financial Crisis.“ Economic Analysis, 47(3-4): 20-34.
Marjanović, Darko, Dragaš, Radovan, and Radojević, Predrag. 2013. “Competitiveness In The
Serbian Economy In The Period of Crisis.”, EMC2013 - Zrenjanin, 323-328.
Marjanović, Darko, and Pjanić, Miloš. 2012. “The Effects Of Tax Competition On The Operations
Of Multinational Companies.” EMC2012 - Zrenjanin, 211-216.
McCarthy, Killian, Van Doorn, Frederik, and Unger, Brigit. 2008. “Globalisation, tax
competition and the harmonisation of corporate tax rates in Europe: a case of killing the patient
to Cure the disease.” Utrecht School of Economics Discussion Paper Series 08-13.
Musabegović, Ismail, Galetin, Milena, and Mitić, Petar. 2015. “Foreign Direct Investments – the
Standard of Fair and Equitable Treatment of Investments on the Example of a Case of the
International Center for Settlement of Investment Disputes (ICSID)“. Economic Analysis, 48(1-
2): 86-97.
Owens, Jeffrey. 2006. “Fundamental Tax Reform: An International Perspective.” National Tax
Journal, 59(1): 131-164.
Paraušić, Vesna, Domazet, Ivana, and Simeunović, Ivana. 2017. “Analysis of the Relationship
Between the Stage of Economic Development and the State of Cluster Development.” Argumenta
Oeconomica, 39 (2): 279-305.
Patterson, Ben, and Serrano, Alicia M. 1998. “Tax competition in the Europen Union.” European
Parliament Working Paper ECON-105 EN.
Porter, Michael E. 2003. “The Economic Performance of Regions.” Regional Studies, 37 (6&7):
549–578.
Radičić, Marko, and Raičević, Božidar. 2011. „Javne finansije u teoriji i praksi.“ Data status,
Beograd.
Round, John. 2009. “Transitional Economies.” International Encyclopedia of Human Geography,
355-360.
Sedmihradsky, Milan, and Klazar, Stanislav. 2002. “Tax competition for FDI in CentralEuropean Countries”, CESifo Working Paper Series No. 647.
Siedschlag, Iulia, Smith, Donal, Turcu, Camelia, and Zhang, Xiaoheng. 2013. “What
determines the location choice of R&D activities by multinational firms?.” Research Policy, 42:
1420– 1430.
Tagkalakis, Athanasios. 2011. “Fiscal policy and financial market movements”, Journal of
Banking & Finance, 35: 231–251.
Talpos, Ioan, and Crasneac, Alexandru O. 2010. “The effects of tax competition.” Theoretical and
Applied Economics, XVII (8): 39-52.
Willis, Gavin. 2016. “Tax incentives and investment in the UK”. Oxford Economics Paper, 68 (2):
465-483.
Zolt, Eric. 2015. “Tax Incentives: Protecting the tax base”. Paper for Workshop on Tax Incentives
and Base Protection, United Nations, New York.