What is meant by base erosion?

The use of tax planning and financial measures to decrease the size of the company’s taxable profits in a country is known as base erosion. This strategy is deployed by multinational companies. You can read about the Base Erosion and Profit Shifting (BEPS) – Issues, Measures taken by India in the given link.

Further readings:

1. Taxation in India – Direct taxes, Indirect Taxes, Features of Taxation System
2. Organisation for Economic Co-operation and Development [OECD] – Objectives, Member Countries, Responsibilities