Q. With reference to Base Erosion and Profit Shifting (BEPS), which of the following statements are incorrect?
Select the correct answer using the code below:
Q. With reference to Base Erosion and Profit Shifting (BEPS), which of the following statements are incorrect?
Select the correct answer using the code below:
The correct option is C 1 and 3 only
Explanation:
Statement 1 is correct: The tax base erosion and profit shifting (BEPS) due to multinational enterprises exploiting gaps and mismatches between different countries' tax systems affects all countries.
Statement 2 is incorrect: Developing countries' higher reliance on corporate income tax implies they suffer from BEPS disproportionately.
Business activities internationally demand that governments must act together to tackle BEPS and restore trust in domestic and international tax systems. BEPS practices cost countries 100-240 billion USD in lost revenue annually, which is the equivalent to 4-10% of the global corporate income tax revenue. Working together in the OECD/G20 Inclusive Framework on BEPS, 141 countries and jurisdictions are implementing 15 Actions to tackle tax avoidance, improve the coherence of international tax rules, ensure a more transparent tax environment and address the tax challenges arising from the digitalisation of the economy.
Statement 3 is correct: An Initiative on Global Markets survey indicates that the proposed GMCT can effectively counter the problem of base erosion and profit shifting. The first statement states that a GMCT would reduce the benefits to companies of shifting profits to low-tax jurisdictions without biasing where they invest.
Explanation:
Statement 1 is correct: The tax base erosion and profit shifting (BEPS) due to multinational enterprises exploiting gaps and mismatches between different countries' tax systems affects all countries.
Statement 2 is incorrect: Developing countries' higher reliance on corporate income tax implies they suffer from BEPS disproportionately.
Business activities internationally demand that governments must act together to tackle BEPS and restore trust in domestic and international tax systems. BEPS practices cost countries 100-240 billion USD in lost revenue annually, which is the equivalent to 4-10% of the global corporate income tax revenue. Working together in the OECD/G20 Inclusive Framework on BEPS, 141 countries and jurisdictions are implementing 15 Actions to tackle tax avoidance, improve the coherence of international tax rules, ensure a more transparent tax environment and address the tax challenges arising from the digitalisation of the economy.
Statement 3 is correct: An Initiative on Global Markets survey indicates that the proposed GMCT can effectively counter the problem of base erosion and profit shifting. The first statement states that a GMCT would reduce the benefits to companies of shifting profits to low-tax jurisdictions without biasing where they invest.
