The term 'Base Erosion and Profit Shifting' is sometimes seen in the news in the context of
A
mining operation by multinational companies in resource-rich but backward areas
B
curbing of the tax evasion by multinational companies
Correct Answer
C
exploitation of genetic resources of a country by multinational companies
D
lack of consideration of environmental costs in the planning and implementation of developmental projects
Explanation
Option (b) is correct because Base Erosion and Profit Shifting (BEPS) refers to tax avoidance strategies used by multinational companies to shift profits from high-tax jurisdictions to low or no-tax locations. The core concept tested is international tax transparency and the OECD/G20 initiative to prevent the artificial "erosion" of a country's tax base. Option (c) is incorrect as it describes "biopiracy," which relates to the exploitation of genetic resources rather than fiscal policy.
International TaxationTax Evasion and Corporate TaxationBase Erosion and Profit Shifting (BEPS)mining operationmultinational companiesresource-rich areastax evasiongenetic resourcesenvironmental costsdevelopmental projects