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OECD and G20 Inclusive Framework on Base Erosion and Profit Shifting(BEPS)

  • Integrity Education, Delhi
  • 03, Jul 2021
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  • India has joined the Organisation for Economic Co-operation and Development (OECD) and G20 Inclusive Framework tax deal of global corporate tax.
  • Purpose: To address the tax challenges arising from the digitalisation of the economy.
  • The proposed solution consists of two components- reallocation of additional share of profit to the market jurisdictions and minimum tax subject to tax rules

About BEPS

  • BEPS refers to 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 or to erode tax bases through deductible payments such as interest or royalties.
  • BEPS is of major significance for developing countries due to their heavy reliance on corporate income tax, particularly from multinational enterprises.