Application of Fuzzy Pattern Recognition to Tax Planning for Location of Foreign Direct Investment

According to the effective tax planning theory, enterprises conducting tax planning for location of foreign direct investment should take into account many factors, among which taxation factor is considered especially important. However, tax legislation can vary greatly from one country to another, so it is not easy for enterprises to decide the optimal location of foreign direct investment. Based on the analysis of the tax environment of all the alternatives, this paper applies the method of fuzzy pattern recognition to preferentially sorting of the locations of foreign direct investment. With the fuzzy pattern recognition method, the scientific decision results for tax planning for location of foreign direct investment could be easily obtained in accordance with the nearest neighbor principle.