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Consider the following statements regarding Base Erosion and Profit Shifting (BEPS).
  1. BEPS refers to the phenomenon where companies invest in a host country via shell companies situated in tax havens to reduce their tax liability.
  2. India has ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS.
  3. The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS is an outcome of the World Bank BEPS Project.
Which of the above statements is/are correct?
  • a)
    1, 2 
  • b)
    2, 3 
  • c)
    2 only 
  • d)
    1, 3
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
Consider the following statements regarding Base Erosion and Profit Sh...
  • The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting is an outcome of the OECD / G20 Project to tackle Base Erosion and Profit Shifting (the “BEPS Project”) i.e., 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 tax being paid. The companies need not invest via shell companies to be accused of BEPS.
  • India has ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting.
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Consider the following statements regarding Base Erosion and Profit Sh...
Statement Analysis:

Statement 1: BEPS refers to the phenomenon where companies invest in a host country via shell companies situated in tax havens to reduce their tax liability.
- This statement correctly defines BEPS as the practice of shifting profits to low-tax jurisdictions.
- This is a correct statement.

Statement 2: India has ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS.
- India ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS in 2016 to combat tax evasion.
- This statement is correct.

Statement 3: The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS is an outcome of the World Bank BEPS Project.
- The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS is an outcome of the OECD/G20 BEPS Project, not the World Bank.
- This statement is incorrect.
Therefore, the correct answer is option C) 2 only. India has ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS, which is aimed at preventing companies from artificially shifting profits to low-tax jurisdictions.
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Consider the following statements regarding Base Erosion and Profit Shifting (BEPS). BEPS refers to the phenomenon where companies invest in a host country via shell companies situated in tax havens to reduce their tax liability. India has ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS. The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS is an outcome of the World Bank BEPS Project.Which of the above statements is/are correct?a)1, 2b)2, 3c)2 onlyd)1, 3Correct answer is option 'C'. Can you explain this answer?
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Consider the following statements regarding Base Erosion and Profit Shifting (BEPS). BEPS refers to the phenomenon where companies invest in a host country via shell companies situated in tax havens to reduce their tax liability. India has ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS. The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS is an outcome of the World Bank BEPS Project.Which of the above statements is/are correct?a)1, 2b)2, 3c)2 onlyd)1, 3Correct answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding Base Erosion and Profit Shifting (BEPS). BEPS refers to the phenomenon where companies invest in a host country via shell companies situated in tax havens to reduce their tax liability. India has ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS. The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS is an outcome of the World Bank BEPS Project.Which of the above statements is/are correct?a)1, 2b)2, 3c)2 onlyd)1, 3Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding Base Erosion and Profit Shifting (BEPS). BEPS refers to the phenomenon where companies invest in a host country via shell companies situated in tax havens to reduce their tax liability. India has ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS. The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS is an outcome of the World Bank BEPS Project.Which of the above statements is/are correct?a)1, 2b)2, 3c)2 onlyd)1, 3Correct answer is option 'C'. Can you explain this answer?.
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