Base Erosion and Profit Shifting (BEPS) refers to strategies employed by multinational companies to shift profits from high-tax jurisdictions to low-tax jurisdictions, thereby eroding the tax base of the higher-tax countries. This practice exploits gaps and mismatches in international tax rules, prompting global initiatives like the OECD's BEPS project to address tax avoidance and ensure that profits are taxed where economic activities generating the profits are performed.