Attractiveness of the domicile economy through tax incentives

Abstract

In most world economies, foreign investments are recognized as an important means of development, but also as an important channel for activating their own potentials. Taking into consideration global trends in foreign direct investment, it is noticeable that they are very significant for the overall development of the world economy, which can be seen through the value of the investments made in the last twenty years. In order to become the leading state in attracting foreign capital in the region, Serbia needs to practice fiscal incentives that can attract foreign investors. The main goal of this paper is to present in an adequate manner how certain tax incentives may affect the business of foreign investors in Serbia. In order to determine the significance of tax incentives, it was necessary to collect enough information from foreign investors, aimed to present their attitudes, opinions, expectations and perceptions regarding the investment of their own capital. In this paper, special attention is paid to tax incentives in certain areas of business conducted by foreign investors in Serbia, depending on the activity of foreign investors and the level of internationalization of business operations. The methodology of empirical research is focused on a quantitative approach, which is reflected in the collection of primary data, the survey carried out among foreign investors, comparison of the collected data, and analysis of causality of the researched phenomena. The results of the conducted empirical research express the views of foreign investors operating in Serbia in an objective and comprehensive way, showing the great significance of tax incentives that undoubtedly influence the choice of the country as an investment destination. Therefore, in the following period, it is extremely important to offer even better conditions to foreign investors, which will primarily be related to a wider range of tax incentives, not diminishing the importance of other factors that may also have an impact on raising the competitiveness of the Serbian economy.