Abstract: The purpose of this paper is to shed light on the
controversial subject of tax incentives to promote regional
development. Although extensive research has been conducted, a
review of the literature gives an inconclusive answer to whether
economic incentives are effective. One reason is the fact that for
some researchers “effective" means the significant location of new
firms in targeted areas, while for others the creation of jobs
regardless if new firms are arriving in a significant fashion. We
present this dichotomy by analyzing a tax incentive program via both
alternatives: location and job creation. The contribution of the paper
is to inform policymakers about the potential opportunities and
pitfalls when designing incentive strategies. This is particularly
relevant, given that both the US and Europe have been promoting
incentives as a tool for regional economic development.
Abstract: This paper provides an analysis of corporate income
tax (CIT) incentives in the Western Balkan countries: Slovenia,
Croatia, Serbia, Montenegro, Macedonia and Albania. Western
Balkan countries, as other transition and developing countries, use
large number of the corporate income tax incentives (CIT) to attract
foreign investments and to stimulate economic activity. The main
goal of this paper is to investigate how often these countries use CIT
incentives and provide review of existing tax incentives in Western
Balkan countries. Paper will focus on reduced CIT rates, tax
holidays, and other investment incentives which imply incentives
like accelerated depreciation, tax allowances and tax credits.