As a brief recap, the OECD 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.
The first pilot, involving 8 countries, commenced in January 2018 and drawing on feedback and experience from that, the second pilot was launched at the end of March this year. ICAP 2.0 has been extended to 17 countries, including 6 of the world’s top 10 economies by GDP, but there are some notable absences, namely Brazil, China and Russia.
Participants in ICAP have spoken favourably about the pilot noting:
Participating countries want to see the pilot expanded to include additional countries. Expansion could come from the 54 country members of the Forum on Tax Administration (FTA) who are eligible to join. However it should be noted that not all countries are at an equal starting point, with only some recently engaging in joint audits.
Whilst experience so far is undeniably indicating a great outcome, there remain a couple of important practical areas to be addressed:
