The OECD Forum on Tax Administration (FTA) on March 29 announced their support for an expanded international compliance (ICAP) pilot program. The group also released a new joint audit handbook and announced more planned improvements relating to transfer pricing.
In a communication released after their meeting in Santiago, attended by tax officials from 46 countries, the group said that 17 tax administrations will participate in an “ICAP 2.0” pilot program, up from the 8 tax administrations in the first pilot, More counties are likely to join.
The ICAP brings tax officials together to jointly assess the transfer pricing positions of multinational taxpayers in a cooperative manner through review of their country-by-country reports, local files, and other materials. The officials undertake both risk assessment and assurance of international tax risks. The program is voluntary for multinationals.
The FTA tax officials also pledged to work together to make tax risk assessments more consistent from country to country. “In addition, we will explore the potential use and sharing of benchmarks for standard situations in the area of transfer pricing,” the tax administrators said.
Further, they advanced work on joint audits with the release of the publication, “Joint Audit 2019 – Enhancing Tax Co-operation and Improving Tax Certainty.”
Work is also underway to improve the advance pricing agreement (APA) process and to explore wider use of APAs and the mutual agreement program (MAP) in tax treaties.
The group also said that the Joint International Taskforce on Shared Intelligence and Collaboration (JITSIC) will continue to be used to coordinate action and support cooperation between tax administrations.