By Julie Martin, MNE Tax
The OECD Forum on Tax Administration (FTA), comprised of 53 member country tax administrations, has agreed to make permanent the International Compliance Assurance Programme (ICAP), the OECD today announced.
The ICAP is a voluntary program for large multinationals that provides for a coordinated, joint assessment of the MNE’s transfer pricing, permanent establishment, and other cross-border tax risks.
Under the ICAP, tax officials from different countries jointly assess the transfer pricing and tax positions of multinational taxpayers through a review of the MNE’s country-by-country reports, transfer pricing local files, and other materials. MNEs suitable for the program must be willing to engage cooperatively and transparently with tax authorities to discuss their transfer pricing and tax positions. The tax officials jointly undertake both risk assessment and assurance of international tax risks.
The decision to make the program permanent was reached during the FTA’s virtual plenary meeting, held December 7–8, the OECD said.
This follows a 2018 ICAP pilot that involved 8 tax administrations and the ICAP 2.0 pilot, launched last year, where 17 tax administrations agreed to participate.
The FTA also decided that senior FTA members would meet next spring to consider a collective FTA effort aimed at improving the capacity of developing country tax administrations. The additional support would focus on digitalization and developing the Tax Inspectors Without Borders initiative.
“I am very proud of how tax authorities responded to the emerging COVID-19 crisis, working individually and co-operatively, and at great pace, to improve our individual and collective responses. The programme of work that we have agreed today, which builds on our achievements over this difficult year, will help us emerge from the crisis stronger, more resilient and more agile”, said Bob Hamilton, Chair of the FTA and Commissioner of the Canada Revenue Agency.
Julie Martin
Julie Martin is the founder of MNE Tax. She edits the publication and regularly contributes articles on new developments in cross-border business taxation.
Julie has worked as a tax journalist and editor for more than 13 years. Prior to that, she worked as an in-house tax attorney in New York. She also holds an LLM in taxation from New York University School of Law.
Julie can be reached at [email protected].
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