Tax administration

OECD International Compliance Assurance Programme (ICAP)


What is ICAP and ICAP 2.0?


The International Compliance Assurance Programme (ICAP) is a voluntary programme for a multilateral co-operative risk assessment and assurance process. It is designed to be an efficient, effective and co-ordinated approach to provide multinational groups (MNEs) willing to engage actively, openly and in a fully transparent manner with increased tax certainty with respect to certain of their activities and transactions. ICAP does not provide an MNE with legal certainty as may be achieved, for example, through an advance pricing agreement (APA). It does however give comfort and assurance where tax administrations participating in an MNE’s risk assessment consider a covered risk to be low risk. Where an area is identified as needing further attention, work conducted in ICAP can improve the efficiency of actions taken outside the programme, if needed. 



The first ICAP pilot was launched in Washington D.C. in January 2018. It brought together eight tax administrations, from Australia, Canada, Italy, Japan, the Netherlands, Spain, the United Kingdom and the United States, with a number of MNEs headquartered in these jurisdictions. The ICAP process has since been updated to reflect the experience and feedback of these tax administrations and MNEs, gathered as the first pilot progressed. A second ICAP Pilot (ICAP 2.0) was announced at the OECD Forum on Tax Administration Plenary held in Santiago, Chile on 26-28 March 2019. The tax administrations participating in ICAP 2.0 are from the following jurisdictions:


  • Australia
  • Austria
  • Belgium
  • Canada
  • Denmark
  • Finland
  • France
  • Germany
  • Ireland
  • Italy
  • Japan
  • Luxembourg
  • Netherlands
  • Norway
  • Poland
  • Russia
  • Spain
  • United Kingdom
  • United States


MNEs with a parent entity in one of these jurisdictions that wish to discuss possible participation in ICAP 2.0 should contact the relevant tax administration by 30 June 2019.


The ICAP Pilot Handbook 2.0 contains a detailed description of each stage of the ICAP 2.0 process, the documentation and information an MNE participating in ICAP 2.0 will be asked to provide, the level of comfort they may achieve as a result of participation in the programme, and a comparison of ICAP with other possible routes to greater tax certainty. 


What are the benefits of ICAP?


As tax administrations and MNEs enter an era of increased transparency, new opportunities arise to use the increased flow of information to support open, co-operative relationships between taxpayers and tax administrations, providing routes towards greater comfort or certainty, and a more effective use of resources. ICAP uses CbC reports and other relevant information to facilitate multilateral engagements between MNEs and participating tax administrations, providing benefits for both, including the following:


  • Fully informed and targeted use of CbC reports and other information held for risk assessment: ICAP enables MNEs to talk through their CbC reports and other information held by tax administrations for the purposes of risk assessing covered risks, and to provide additional clarity to aid understanding of their cross-border activities. Tax administrations are also able to discuss their findings with each other, improving consistency in the interpretation of data. This should help tax administrations to reach an early decision about the level of tax risk, if any, presented by the data contained in these documents. It may also improve consistency in the understanding of MNEs with similar transactions in multiple jurisdictions.

  • An efficient use of resources: Tax administrations discuss the information provided by an MNE for its ICAP risk assessment, share their findings with each other and co-ordinate any follow-up questions. An MNE can thus engage with several tax administrations simultaneously, either through multilateral engagements or via the lead tax administration, rather than needing to deal with multiple separate enquiries.

  • A faster, clearer route to multilateral tax certainty: ICAP is a managed process with clear and ambitious timeframes, which are agreed upfront, for MNEs and tax administrations to reach a mutual understanding of the level of tax risk present. Working multilaterally, tax administrations gain a comprehensive picture of an MNE’s cross-border activities and can be assured either that the tax position is satisfactory or that any tax risk has been identified. In the spirit of co-operative compliance, this is communicated clearly to the MNE at an early stage. The process also provides an MNE with an opportunity to use insights from ICAP more broadly in managing its affairs across its global operations. 

  • Co-operative relationships between MNEs and tax administrations:  ICAP includes a commitment by MNEs and tax administrations to work together through the ICAP risk assessment and assurance process in a transparent, open and co-operative manner. As a result of participation in the programme, a relationship of mutual trust based on reciprocal ‌.

  • Fewer disputes entering into MAP: Mechanisms for a more co-operative and collaborative risk assessment and assurance of MNEs should improve how tax administrations understand the perception and treatment of transactions by other tax administrations. They also provide an opportunity for tax administrations to discuss transactions at the risk assessment stage, before differing views are adopted and become entrenched. This can improve consistency between tax administrations in the interpretation and treatment of transactions, reducing the number of instances where a case results in dispute and MAP.


The learnings from the first ICAP pilot and how this influenced ICAP 2.0

ICAP 2.0 retains many of the features that were a success in the first pilot, including a single documentation package, co-ordinated multilateral engagement by tax administrations with each other and with the MNE, a central role for the lead tax administration and clear timeframes for each stage, but also incorporates a number of improvements.


  • A clearer, more efficient and more flexible process: Based on experience in the first pilot, it has been possible in the ICAP Pilot Handbook 2.0 to provide more detail and clarity upfront as to how an ICAP risk assessment will be conducted, providing greater certainty for MNEs and covered tax administrations. The distinction between a level 1 (high level) and level 2 (in-depth) risk assessment is removed and more flexibility has been incorporated into the risk assessment stage, such as around the timing, format and content of multilateral engagements, including meetings with an MNE. These changes should ensure the approach adopted is appropriate to each MNE. They should also improve the efficiency and effectiveness of an ICAP risk assessment, reducing the resource burden for all participants.

  • A more targeted approach to documentation: A new scoping stage has been added to the ICAP risk assessment and assurance process, which takes place once it is confirmed an MNE will participate in the programme, to determine whether any covered transactions will be excluded from a covered tax administration’s ICAP risk assessment, if appropriate. This ensures that an MNE will only be required to provide documentation relevant to transactions that are within the scope of its risk assessment. 
  • A specific option for issue resolution to be included in the risk assessment stage: Issue resolution will allow covered tax administrations to work with an MNE, within the ICAP process, to identify any changes that are needed to allow them to conclude that one or more of the covered risks is low risk.

  • Greater participation by FTA member tax administrations: A greater number of tax administrations have indicated a willingness to participate in ICAP 2.0, compared with the eight in the first pilot. While the number of covered tax administrations for a particular MNE’s ICAP risk assessment will remain limited, this increases the likelihood that an MNE will be able to obtain comfort over a greater proportion of its operations. 

What is the structure and timeframe for a risk assessment and assurance process within ICAP 2.0?

The total timeframe for an MNE’s risk assessment and assurance within ICAP 2.0 will depend upon a number of variables, including the MNE’s year end, the period/s to be covered by the risk assessment, the availability and timing of documentation, the complexity of the issues included in the risk assessment, and whether there is a need or desire for issue resolution within the ICAP process itself. In most cases, an MNE’s risk assessment and assurance should be completed and outcome letters issued within 24-28 weeks of the MNE providing the main ICAP documentation package, at the start of the risk assessment stage. The various stages of the ICAP 2.0 process are set out in the diagram below:




Additional information on the first ICAP pilot

More information on the first ICAP pilot , which was launched in January 2018, can be found in the handbook that accompanied the pilot. International Compliance Assurance Programme Pilot Handbook

 Further information

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