Tax Incentives as Important Segment of Tax Reforms in Balkan Countries and Kosovo Case

Abstract

The aim of this paper is to draw attention to the complexity and importance of tax incentives that the Balkan countries apply in their tax systems as a very important part of tax reforms. For more than two decades, the Balkan countries have been undergoing a socio-economic transition. Without a doubt, the tax system has been one of the more dynamic subsystems of the socio-economic system of the Balkan countries. These countries have made efforts in view of allowing the tax systems to enable the stimulation of economic entities and to align themselves more with the tax systems of the EU member states. The development of appropriate and functional tax reforms has not been an easy goal in any one Balkan country. Any tax reform in any country has had its own peculiarities. However, there were common trends. One very important segment in this regard was also the implementation of tax incentives that the Balkan countries implemented with the aim of encouraging foreign investment and development of undeveloped areas up to the adoption of the corporate income tax (CIT). In this regard, the most important place has been taken up by tax breaks (tax holidays) as tax incentives that are most frequently implemented in the tax systems of the Balkan countries. Kosovo still has a lot to do in this domain. For now, significant work has been done with regard to tax incentives and the reduction of CIT tax rate.

Keywords: Tax reform, Tax Incentives,Tax Holidays,Tax Rates