Which of the following statements is are true about Base Erosion and Profit Sharing BEPS 1 It refers...........

Economic Affairs Tax System

Which of the following statements is/are true about Base Erosion and Profit Sharing (BEPS)?

1. It refers to tax avoidance strategies adopted by Multinational companies to artificially shift profits to low or no-tax locations.

2. OECD has developed an action plan on BEPS.

Select the correct answer using the code given below.

1 only

2 only

Both 1 and 2

Neither 1 nor 2

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Explanation:

Base erosion and profit shifting (BEPS) refers to corporate tax planning strategies used by multinationals to "shift" profits from higher–tax jurisdictions to lower–tax jurisdictions, thus "eroding" the "tax–base" of the higher–tax jurisdictions.