The efficiency of tax incentives in terms of foreign direct investment - the case of Turkey

The world economy has entered in the developing process of globalization especially since 1990s. Along with this case, the economic borders between the countries have started to disappear and the new economic cooperations have become a current issue. When the economic process made progress in this way, foreign direct investments ( FDI) came up and competition started between the countries that wanted to attract FDI. In this context, the countries that wanted to attract more investments to their countries benefited from various economic arguments which are mainly tax incentives. Tax incentives which are being applied by many countries today have been formed according to the economic policy and conditions of the country and they vary from country to country in terms of their types.The aim of this study is to show how effective the tax incentives applied to FDI on foreign investments are and to explain how the situation in Turkey is. In this regard, firstly the FDI-oriented theoretical framework was drawn and then the types of tax incentives which are applied to FDI were examined. In the final part of the thesis, the FDI division in Turkey was studied and the effectiveness of tax incentives on FDI was examined.