Question: BEPS-Base Erosion and Profit Shifting is related to …
(a) Tax avoidance
(b) Conservation of Earth
(c) Downfall in profit due to restriction on export to foreign countries
(d) None of the above.
Ans: (a)
Related Fact :
- On May 17, 2017, the Union Cabinet chaired by Prime Minister Narendra Modi gave its approval for the multilateral convention to implement tax treaty related measures to prevent Base Erosion and Profit Shifting (BEPS).
- The convention is an outcome of the OECD / G20 BEPS Project to tackle base erosion and profit shifting through tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little or no economic activity, resulting in little or no overall corporate tax being paid.
- The Cabinet nod on Wednesday marks the formal go-ahead for India to sign the multilateral instrument in Paris on June 7.
- The Final BEPS Project identified 15 actions to address BEPS in a comprehensive manner. Implementation of the Final BEPS Package requires changes to more than 3000 bilateral tax treaties which will be burdensome and time consuming.
- The convention would swiftly modify all covered bilateral tax treaties (Covered Tax Agreements / CTA) to implement BEPS measures.
- For this purpose, formation of an Ad-hoc Group for the development of such multilateral instrument was endorsed by the G20 Finance Ministers and Central Bank Governors in February 2015.
- It is notable that Base erosion and profit shifting (BEPS) refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations.
Reference:
http://pib.nic.in/newsite/PrintRelease.aspx?relid=161885
http://www.thehindubusinessline.com/news/cabinet-nod-for-signing-of-convention-on-beps/article9704770.ece