Literature analysis suggests that there is a lack of research regarding the assessment of the impact of foreign direct investment on tax revenues, especially there is a lack of research on the impact of foreign direct investment on tax revenues through different impact channels, i.e. analyzing the impact on revenue of different tax types. To fill this gap in the literature, the major purpose of this dissertation is to create a model for assessing the effect of foreign direct investments on tax revenues after studying the phenomenon of foreign direct investments and to verify it in the countries of the European Union. The scientific problem of the research: what is the effect of foreign direct investments on tax revenue and how to determine this effect. The empirical research revealed that an increase in inward foreign direct investment leads to a decrease in total tax revenue and personal income tax revenue, while an increase in outward foreign direct investment leads to a decrease in total tax revenue and increase in value added tax revenue. The obtained results show that tax benefits for foreign investors must be carefully evaluated when forming foreign direct investment promotion policy.