Abstract. The subject of shifting of income by various MNCs or ‘Base Erosion and Profit Sharing’ (BEPS) motivated by tax reasons has been a matter of attention, globally, in the recent years. In this paper, I provided a literature review of what is known about the issue of BEPS in general and went forward in discussing the empirical approaches that identify shifting of income supported by some data sources and thus summarized the discussion using the same. One of the major observations from this review is that the intensity of BEPS in the recent studies, is smaller than what can be found in the studies done earlier. This manuscript talks about the ways to offer an approach to conceptualize the magnitude of BEPS. It finishes up by featuring the significance of existing economic, financial and legal frictions as limitations on BEPS and by examining the ways by which future research may demonstrate these constraints efficiently.

Keywords: BEPS, profit sharing, base erosion in MNCs, taxation, multinational firms.