Base Erosion and Profit Shifting

Base Erosion and Profit Shifting (BEPS) refers to strategies used by multinational companies to minimize their tax liabilities by shifting profits from high-tax countries to low-tax or no-tax jurisdictions. This often involves exploiting gaps and mismatches in international tax rules, making it appear as though profits are earned where taxes are low or not paid at all. BEPS can reduce governments' tax revenues, which are vital for public services, while enabling companies to increase their profits. International efforts aim to close these gaps and ensure corporations pay their fair share of taxes globally.