The Research Of The Effect Of Tax Policy On Attracting Foreign Direct Investment

With the worldwide economy speeding up, Foreign Direct Investment (FDI) reaches unprecedented scale, especially in these years; all countries of the world compete fiercely to attract FDI whether developing countries or developed countries, they all look attracting FDI as important means of promoting economy development. Because the traditional area superiority is diminishing, the diversity of factors of influencing FDI's flowing is reducing. Preferential tax policy can be controlled and adjusted by the government in relative short time, so preferential tax policy plays special role on attracting FDI. Tax is becoming more and more important means of attracting international capital especially FDI in sovereign state. For this reason, the research of the effect of tax policy on attracting FDI is very significant. The paper is the main research of the effect of tax policy on attracting FDI. Firstly, The paper inquires into the main function of FDI in economy development of our country, analyzes the reason of traditional area factors'weakening and the outstanding status of tax in FDI policy decision. Secondly, It analyzes the factors of influencing FDI with Analytical Hierarchy Process (AHP) method. The result shows that tax is very important to attract FDI. The last part is concrete analysis of the effectiveness of tax on attracting FDI.The method of regression analysis is used in the concrete analysis. The result shows that the function of preferentional tax policy on attracting FDIis actually obvious. On the basis of theory analysis and concrete analysis, it analyzes the preferential tax policy of attracting FDI in our country and contrasts the effect of different preferential tax policy. At the same time, it analyzes the existed questions of present preferential tax policy, puts forward the reform suggestion. It can provide reference on attracting and utilizing FDI better for our country.