Multinational corporations exploit disparities in tax systems across countries to undertake Base Erosion and Profit Shifting (BEPS). In this research, we focus on the extractives sector and analyse the magnitude of tax motivated income shifting of mining multinationals We propose a novel measurement of BEPS based on production function approach. Prior literature on BEPS estimation uses information on labour, capital and subsidiary-parent tax differentials to gauge counterfactual taxable profit and compares it with reported profit. We contribute to previous literature by incorporating firm-level productivity, input use, and demand conditions – specifically suited for mining multinationals. By isolating idiosyncratic factors from reported profit, we construct a new measure of BEPS – the profitability gap between estimated and reported profit scaled to firm size. This allows us to better capture tax motivated income shifting as compared to conventional measures. Our methodology is based on the literature on production function estimation (De Loecker and Warzynski 2012; De Loecker Eeckhout and Unger 2021; Blundell and Bond 2000; Blundell and Bond 1998). Using a panel dataset of subsidiary level information on 2,275 observations of mining firms from 2012-20, we find that for every 1 percentage point increase in subsidiary-parent tax rate differential, subsidiaries under-report profitability by 0.742 cents on every dollar of turnover. In contrast, we do not find significant corresponding change in reported profit during the same period based on previous literature. The results suggest that the measurement we propose potentially captures richer components related to BEPS than the conventional measurement only based upon the reported profit.