Impact of corporate tax on investment decisions: A field research

Economic development is one of the most significant goals of less developed and developing economies. On the other hand, investment is a key to economic development. Depending on their features, investments contribute to an increase in GNP by leading to a production increase in the short or long-term. Besides, it provides an increase in income as it creates business volume and demand for goods. In this regard, investments are monitored as important economic indicators. Globalization, which has gained momentum from the beginning of the 1980s onwards, has also changed the international character of investments. Now, foreign investments are as significant as domestic investments in terms of growth and impacts. Businesses assess many factors while deciding for investments. Following these factor assessments, they invest into the place and sector that yield the maximum benefit. Corporate tax is one of the most important factors assessed by businesses while deciding for investments. Business enterprises have started to transfer their investments to countries where tax burden is less than their own countries. For this reason, there is a considerable competition on taxation between countries. Tax decrease or even elimination of taxes has become one of the most extensive strategies adopted in order to attract investment giving rise to so-called ?tax paradises?. Recent developments have increased the importance of taxes in relation to investment decisions. Thus, the study focuses on the impact of corporate tax on investment decisions in Turkey. In the first chapter, corporate tax and its theoretical background are analysed. The second chapter is dedicated to the importance of corporate tax in Turkey and impact of the provisions of Turkish corporate tax system on investments. In the third chapter, this impact is assessed and further clarified by means of a field research.