Tax Incentives : Using Tax Incentives to Attract Foreign Direct Investment

Tax Incentives : Using Tax Incentives to Attract Foreign Direct Investment

The increasing mobility of international firms and the gradual elimination of barriers to global capital flows have stimulated competition among governments to attract foreign direct investment, often through tax incentives. This note reviews the debate about the effectiveness of tax incentives, examining two much-contested questions: can tax incentives attract foreign investment? And what are the costs of using them?

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Bibliographic Details
Main Author: Morisset, Jacques
Language:English
Published: World Bank, Washington, DC 2003-02
Subjects:TAX INCENTIVES, FOREIGN DIRECT INVESTMENTS, TAX LAW, COST RECOVERY, INCENTIVES, TAX POLICY, TAX COMPETITION, TAX HARMONIZATION, CORPORATE TAXATION, TAX ALLOWANCES, TAX CREDITS, TAX ADMINISTRATION, ACCELERATED DEPRECIATION, ACCOUNTING, AFFILIATED ORGANIZATIONS, BIDDING, CAPITAL FLOWS, CODE OF CONDUCT, COMMUNICATIONS DEVELOPMENT, COMPETITIVE MARKETS, COMPETITIVE TAX INCENTIVES, CORPORATE INCOME TAX, CORPORATE TAX, CORPORATE TAX RATE, CORPORATE TAX RATES, CORPORATION TAX, DEPRECIABLE CAPITAL, DEVELOPING COUNTRIES, DIRECT INCOME TAXES, DOMESTIC MARKET, EMERGING MARKETS, EMPLOYMENT TAXES, EXPENDITURE, EXPORT, EXPORT PROCESSING ZONES, EXPORTS, FOREIGN COMPANIES, FOREIGN DIRECT INVESTMENT, FOREIGN INVESTMENT, FOREIGN INVESTORS, FREE TRADE, GLOBAL CAPITAL, GLOBAL CAPITAL FLOWS, GLOBALIZATION, GOVERNMENT REVENUES, HOST GOVERNMENT, HOST GOVERNMENTS, ILLICIT BEHAVIOR, IMPORT DUTY EXEMPTIONS, INCENTIVE MEASURES, INCENTIVE REGIMES, INCOME TAX, INCOME TAX RATE, INDIRECT CONSUMPTION, INDUSTRIAL COUNTRIES, INSTRUMENT, INSURANCE, INSURANCE COMPANIES, INTERNATIONAL ECONOMICS, INTERNATIONAL FINANCE, INTERNATIONAL FIRMS, INTERNATIONAL INVESTORS, INVESTING, INVESTMENT ALLOWANCES, INVESTMENT CLIMATE, INVESTMENT CODE, INVESTMENT DECISIONS, INVESTMENT EXPENDITURE ALLOWANCES, INVESTMENT EXPENDITURES, INVESTMENT LOCATION DECISIONS, INVESTMENT PROJECTS, INVESTMENT TAX ALLOWANCES, INVESTMENT TAX CREDITS, JURISDICTION, LOSS OF REVENUE, MACROECONOMIC ENVIRONMENTS, MACROECONOMIC STABILITY, MULTINATIONAL COMPANIES, MULTINATIONAL FIRMS, POLITICAL STABILITY, PRIVATE INVESTMENT, PUBLIC POLICY, PUBLIC POLICY INNOVATIONS, RENTS, SMALL ECONOMIES, STATUTORY TAX, STATUTORY TAX RATE, TARGETED TAX INCENTIVES, TAX, TAX BASE, TAX CHANGES, TAX HAVENS, TAX INCENTIVE, TAX INCENTIVE PROGRAMS, TAX MEASURES, TAX NEEDS, TAX POLICIES, TAX RATE, TAX RATES, TAX REBATES, TAX REGIMES, TAX REVENUES, TAX SYSTEM, TAX SYSTEMS, TAXABLE INCOME, TAXATION, TAXPAYERS, TRANSFER PRICES, TRANSPARENT TAX RULES, TREASURY, USE TAX TAX INCENTIVES,
Online Access:http://documents.worldbank.org/curated/en/2003/02/12105893/tax-incentives-using-tax-incentives-attract-foreign-direct-investment
https://hdl.handle.net/10986/11325
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Summary:The increasing mobility of international firms and the gradual elimination of barriers to global capital flows have stimulated competition among governments to attract foreign direct investment, often through tax incentives. This note reviews the debate about the effectiveness of tax incentives, examining two much-contested questions: can tax incentives attract foreign investment? And what are the costs of using them?

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