Base erosion and profit shifting (BEPS) refers to corporate tax planning strategies used by multinationals to "shift" profits from higher-tax jurisdictions to lower-tax jurisdictions, thus "eroding" the "tax-base" of the higher-tax jurisdictions.

How is base erosion tax benefit calculated?

The base erosion percentage for any tax year generally equals the total base erosion tax benefits for the year (the numerator) divided by the total deductions for the year (including base erosion tax benefits) but excluding deductions allowed under IRC Sections 172, 245A or 250, and certain other deductions that are ...

What is base erosion in economics?

Base Erosion and Profit Shifting (BEPS) indicate tax avoidance strategies which Multinational Corporations (MNCs) employ for reducing their tax bases. Typically, a company needs to pay tax for the incomes or profits they earn. ... Such practices eroded the tax base.