tax base erosion and profit shifting (beps)
Tax base erosion and profit shifting (BEPS) refers to the strategies used by multinational companies to exploit gaps and mismatches in tax rules to minimize their overall tax liability. These strategies involve shifting profits from higher-tax jurisdictions to lower-tax or tax-exempt locations, thus eroding the tax base of countries where actual economic activities occur. It often involves complex financial arrangements, intra-group transactions, and the abuse of loopholes to artificially reduce taxable income and avoid paying a fair share of taxes.
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