Tax Holiday


DEFINITION of 'Tax Holiday'

A government incentive program that offers a tax reduction or elimination to businesses. Tax holidays are often used to reduce sales taxes by local governments, but they are also commonly used by governments in developing countries to help stimulate foreign investment.


Used in the hopes of increasing the gross domestic product (GDP) in developing countries, tax holidays are a way in which governments attract foreign investors. Tax holidays are often put in place in particular industries to help promote growth.

  1. Taxes

    An involuntary fee levied on corporations or individuals that ...
  2. Gross Domestic Product - GDP

    The monetary value of all the finished goods and services produced ...
  3. Foreign

    1. A non-U.S. company with securities trading on the North American ...
  4. Foreign Direct Investment - FDI

    Foreign Direct Investment (or FDI) is an investment made by a ...
  5. Labor Productivity

    A measurement of economic growth of a country. Labor productivity ...
  6. Global Recession

    An extended period of economic decline around the world. The ...
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  3. Is Italy a developed country?

    Italy is a developed nation with extensive infrastructure, a rich cultural history and control over several exports. Italy ... Read Full Answer >>
  4. Is the Netherlands a developed country?

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  5. Is Canada a developed country?

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