gs1medium
The term ‘Base Erosion and Profit Shifting’ is sometimes seen in the news in the context of:
- A.mining operation by multinational companies in resource-rich but backward areas
- B.curbing of the tax evasion by multinational companies
- C.exploitation of genetic resources of a country by multinational companies
- D.lack of consideration of environmental costs in the planning and implementation of developmental projects
▶ Answer & Explanation
Correct answer: B. curbing of the tax evasion by multinational companies
Base Erosion and Profit Shifting (BEPS) refers to tax planning strategies that exploit gaps and mismatches in tax rules to avoid paying tax. Multinational enterprises use these strategies to shift profits from the countries where they are generated to low or no-tax locations. The OECD and G20 introduced the BEPS Action Plan to tackle such aggressive tax avoidance practices.
Source: UPSC gs1 2016