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

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Correct answer: Curbing of the tax evasion by multinational companies. BEPS refers to tax strategies used by multinational en- terprises (MNEs) to shift profits from high-tax to low-tax ju- risdictions, exploiting gaps in international tax laws. This results in significant revenue losses for governments and an unfair competitive advantage for tax-avoiding corporations. Mechanisms: MNEs achieve BEPS through manipulating trans- fer pricing, shifting intangible assets, and using tax havens. For instance, a company may attribute profits to subsidiaries in tax havens despite economic activity occurring elsewhere. Impact: BEPS leads to government revenue loss, weakened public services, business inequality, and reduced trust in tax systems. International Efforts: The OECD and G20 launched the BEPS Project, introducing measures to close tax loopholes, prevent treaty abuse, and enhance transparency. BEPS Action Plan: The OECD/G20 15-Point Action Plan ad- dresses key issues like transfer pricing, tax treaty abuse, and digital economy taxation. Many nations are integrating these recommendations

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

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