alleryStart learning →Which deductible payments are typically used to erode the tax base under BEPS?
APenalties or fines
BDividends or capital gains
CInterest or royalties
DGoodwill or stamp duty
Answer & Solution
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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