Tax incentive policies for foreign direct investments: Sample of Turkey

Foreign direct investments provide development and improvement in countries where it is invested in general. For that reason it is seen as an important foreign source in terms of countries. The host country applies a number of incentive policies in order to attract foreign direct investments to the country. Those applied policies are seen importantly both in terms of developing of the host country and in terms of carrying interest of the investor. Especially it is endeavored to eliminate the developmental differentiation existing among industrialized and industrializing countries because of insufficiency of savings ? capital with foreign direct investments. Because the industrializing countries experience capital shortage in general, they give more importance to foreign direct investments in long term. For that purpose they apply incentive policies. During the recent years, tax incentive policies lead to incentive policies. It is aimed at to provide to develop the country encouraging investments in developing countries and to transfer technology to the country and to bring management information there thanks to this policy. With this thesis, it is aimed at emphasizing the importance of foreign direct investments in developing process of Turkey and determining deficiencies in tax incentive policies applied to foreign direct investments by contributing to the development and to submit settlement proposals to eliminate those deficiencies. In this research, foreign direct investments have more importance in what areas in Turkey and specifying applications necessary to be carried out by the managers of the country has basic importance for those investments. The fact that foreign direct investments are not in the desired level in Turkey and specifying policies necessary to be applied in order to attract foreign direct investments as a result of this problem have the most importance in terms of economic development of Turkey. It must be suggested whether or not incentive policies applied in order to attract foreign direct investments in terms of economic development of Turkey are sufficient, if they are not sufficient it is necessary to carry out what can be done. In this study made in this context, it is researched tax incentive policies aimed at foreign direct investments of Turkey. In recent years Turkey has been achieving a better level about foreign direct investments with the policies that it applies. But the achieved target is not in the desired level. Because of those results the study is explaining the measures necessary to be taken by Turkey in order to attract foreign direct investments. In addition, it is studied historical development of foreign direct investments in Turkey by separating it as pre-2002 and post-2002.Key Words: Foreign Direct Investments, Tax Incentive Policies, Multinational Companies