The term lsquo Base Erosion and Profit Shifting rsquo is sometimes seen in the news in the context o...........

Economic Affairs Tax System

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The term ‘Base Erosion and Profit Shifting’ is sometimes seen in the news in the context of

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UPSC CSP Previous Year Paper (2016)

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mining operation by multinational companies in resource-rich but backward areas

curbing of the tax evasion by multinational companies

exploitation of genetic resources of a country by multinational companies

lack of consideration of environmental costs in the planning and implementation of developmental projects

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Explanation:

Base erosion and profit shifting (BEPS) refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations.

Under the OECD/G20 Inclusive Framework on BEPS, over 125 countries and jurisdictions are collaborating to implement the BEPS measures and tackle BEPS.

Double-tax avoidance treaties and tax-information exchange between member nations are used to curb this practice.