Base Erosion and Profit Shifting
Question
The term 'Base Erosion and Profit Shifting' is sometimes seen in the news in the context of
Options
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
Explanation
Base Erosion and Profit Shifting (BEPS) is an OECD initiative addressing tax evasion and avoidance by multinational enterprises. BEPS refers to tax planning strategies that reduce tax liability by eroding the tax base or shifting profits to low-tax jurisdictions. Option A relates to mining operations, Option C relates to genetic resources exploitation, and Option D relates to environmental costs. The term specifically refers to curbing tax evasion by multinational companies through coordinated international tax policies.
Question details
Year
2016
Paper
GS Paper 1
Question
Q60
Subject
Economy
Sub-topic
Tax Evasion and International Trade
Type
Factual single
Difficulty
Medium
Nature
Current-affairs-linked
Source hint
International Tax Policy and OECD
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