One of the basic characteristics of the new international tax and economic order is the strong interdependence between various tax factors and concepts, which comes as a consequence of the increasingly compounded business environment. This new era of globalisation essentially presupposes a common understanding of the fundamental terms pertaining to the world investment climate and a homogeneous approach to their treatment. In this respect, this article represents the authors effort to examine tax avoidance in the wider context of worldwide investment and its determinants with a view to arriving at tentative conclusions as to their relationship and interaction. It is exactly such interaction that may trigger a reconsideration of the traditional views expressed towards the costs of tax avoidance and the desirability of tax incentive policies and, accordingly, lead to a more composite thinking in compliance with contemporary needs and trends.