2016 GS Paper I, all questions
UPSC Prelims 2016 · GS Paper I
Question 60: Economy and Social Development
The term ‘Base Erosion and Profit Shifting’ is sometimes seen in the news in the context of
amining operation by multinational companies in resource-rich but backward areas
bcurbing of the tax evasion by multinational companies
cexploitation of genetic resources of a country by multinational companies
dlack of consideration of environmental costs in the planning and implementation of developmental projects
AnswerUPSC’s answer is (b).
Base Erosion and Profit Shifting describes tax planning by multinational companies that exploits gaps and mismatches in tax rules to move profits to low-tax places where little real activity occurs, eroding the tax base of the countries where they operate. The OECD and G20 launched an action plan to curb it. UPSC's key reads it as curbing tax evasion by multinationals.
Why each option is right or wrong
- (a) It is about tax, not mining by multinationals.
- (b) Right: BEPS concerns curbing tax avoidance and evasion by multinationals.
- (c) It is not about exploiting genetic resources.
- (d) It is not about environmental costs in project planning.
Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2016, General Studies Paper I, Series A. The paper on upsc.gov.in.