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CA Final Base Erosion and Profit Shifting — practice questions

Explore 49 free Base Erosion and Profit Shifting questions in CA Final Taxation. Open each question or exercise to read its content, reference answers and available explanation.

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Base Erosion and Profit Shifting questions and exercises with answers

Showing questions 1–30 of 49.

What does the acronym BEPS stand for in international tax?Read the answer and worked solution →Which deductible payments are typically used to erode the tax base under BEPS?Read the answer and worked solution →How does the OECD describe BEPS strategies?Read the answer and worked solution →The OECD launched its BEPS Project in 2013 together with which group?Read the answer and worked solution →The BEPS Multilateral Instrument came into force in which month and year?Read the answer and worked solution →BEPS Action 7 is aimed at preventing artificial avoidance of what?Read the answer and worked solution →What is the subject of BEPS Action 15?Read the answer and worked solution →BEPS Action 1 addresses tax challenges of which area?Read the answer and worked solution →Disclosure of aggressive tax planning is which BEPS Action?Read the answer and worked solution →What is the minimum tax rate under the OECD GloBE rules (IIR and UTPR)?Read the answer and worked solution →GloBE rules apply to multinationals above what revenue threshold?Read the answer and worked solution →Which Ultimate Parent Entity falls outside the GloBE rules?Read the answer and worked solution →Most BEPS activity is associated with industries holding what asset?Read the answer and worked solution →Which type of offshore centre acts as the terminus for BEPS flows?Read the answer and worked solution →Which 2016 EU directive follows the BEPS project?Read the answer and worked solution →The EU's 2017 mandatory disclosure rules target which group?Read the answer and worked solution →The UN Model Tax Convention guides governments on what?Read the answer and worked solution →Which model do double taxation treaties generally follow?Read the answer and worked solution →Which model gives greater consideration to developing countries?Read the answer and worked solution →Which type of PE does the UN Model add to those in the OECD Model?Read the answer and worked solution →A fixed place of business PE arises under which OECD Model article?Read the answer and worked solution →OECD Model article 5(3) covers which kind of PE?Read the answer and worked solution →A PE created through a dependent agent is called what?Read the answer and worked solution →Which item is on the OECD indicative list of prima facie PEs?Read the answer and worked solution →Which activity is typically excluded from creating a PE?Read the answer and worked solution →Toll processing means keeping goods owned by the enterprise solely for what?Read the answer and worked solution →Most OECD members find no PE if a place of business exists for under how long?Read the answer and worked solution →Which agent most clearly gives a foreign firm a PE?Read the answer and worked solution →An independent agent acting for a foreign enterprise generally does what?Read the answer and worked solution →Does a parent's ownership of an agent company make it an agent PE?Read the answer and worked solution →

Worked practice questions

What does the acronym BEPS stand for in international tax?

  1. Bilateral exemption of passive sales
  2. Budget estimation and profit sharing
  3. Banking equity and price stabilisation
  4. Base erosion and profit shifting
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Correct answer: D. Base erosion and profit shifting

BEPS names tax avoidance strategies that erode the tax base of one country and shift profits elsewhere.

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Which deductible payments are typically used to erode the tax base under BEPS?

  1. Penalties or fines
  2. Dividends or capital gains
  3. Interest or royalties
  4. Goodwill or stamp duty
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Correct answer: C. Interest or royalties

Interest and royalties paid to related entities are deductible in the high-tax country, so they strip income out of its tax base.

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How does the OECD describe BEPS strategies?

  1. Lawful use of treaty rates alone
  2. Voluntary sharing of taxing rights
  3. Mandatory repatriation of profits
  4. Exploiting gaps and mismatches in rules
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Correct answer: D. Exploiting gaps and mismatches in rules

The OECD frames BEPS as arbitrage of differences and loopholes between national tax systems.

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More Taxation topics

Double TaxationTransfer PricingDeduction, Collection and Recovery of TaxIncome Tax DepartmentPermanent Account NumberBasic ConceptsAnti-avoidance ProvisionsAppeals, Revision and Dispute Resolution