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

[UPSC Civil Services Exam – 2016 Prelims]

(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 planning and developmental costs in the implementation of projects

Answer: (c)        

Explanation:

• Base erosion and profit shifting (BEPS) is related to tax avoidance strategies adopted by companies that exploit gaps and mismatches in tax rules to artificially move profits to low or no-tax locations.
• The inclusive framework collaborates over 135 countries and jurisdictions to implement the BEPS measures and to curb BEPS.
• Double-tax avoidance treaties and tax-information exchange between member nations are done to curb this practice.