The effects of tax competition on the operations of multinational companies

Marjanović, Darko and Pjanić, Miloš and Radojević, Predrag (2012) The effects of tax competition on the operations of multinational companies. In: II International Symposium Engineering Management and Competitiveness (EMC2012), Zrenjanin, 22-23rd June 2012. Technical Faculty "Mihajlo Pupin", Zrenjanin, pp. 211-216. ISBN 978-86-7672-165-8

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Abstract

process of innovation, research, development and transfer of modern technologies. Given that the objective of the multinational companies that rationally structured network affiliations, and maximize the benefits offered by different countries, the decision to locate the mean activity of the previous detailed analysis of all relevant potential determinants of the country in which to invest capital and its comparison with other potential sites. Today, many countries have introduced various incentives to attract multinational companies. The goal is to create a more competitive economic environment, tax policy is a legitimate and important instrument for achieving this goal. Tax competition implies that each jurisdiction tries to attract capital and investment by offering favorable tax treatment, through a broad tax base and/or low tax rates. One of the main reasons for the appearance of tax competition is certainly the tax burden. States fully realize the situation that if there is a deliberate reduction in effective tax rates automatically comes to attracting foreign capital.

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