Foreign Direct Investments and Tax Policy Current Evaluations for OECD Countries

Abstract

Today, foreign direct investments (FDI) have become indispensable tools for countries for reasons such as technology transfer, employment creation, promotion of international trade, economic development and support for development, as well as the capital they provide to the economy. Countries that want to benefit from the blessings of foreign capital aim to attract FDI to their countries by using different instruments. One of the tools frequently used for this purpose is tax policies. In this study, we have examined the relationship between foreign direct investments and taxation at the theoretical and empirical level. FDI flows in the recent years and corporate tax rates of OECD countries, which hold a significant portion of global capital, have been compared. It has been observed that OECD countries have made significant taxation regulations to attract foreign investment.