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It is increasingly common to see tax administrations working together where there are cross-border arrangements in which they have a shared interest. HMRC is making increasing use of various collaborative approaches, such as exchanges of information and joint audits. Whilst much of this collaboration takes place in the context of audits or enquiries, there is an increasing trend too for collaboration between tax administrations in providing greater certainty for MNEs and in the prevention of disputes. This is clear in the development of the OECD’s International Compliance Assurance Programme (ICAP), which expands the opportunities for MNE groups to achieve increased tax certainty, and which complements the use of Advance Pricing Agreements (APAs).  A new handbook on the ICAP process was published by the OECD in February 2021,

The deadline for applying for the next round of ICAP risk assessments is 30 September 2021, with subsequent rounds in March and September 2022.


The increase in attention paid by tax administrations globally is driving an increase in audits and enquiries into MNE’s cross-border arrangements. This in turn is increasing the number of Mutual Agreement Procedure (MAP) cases and putting pressure on tax administrations to resolve these within the agreed 24 month minimum standard timeframe. Many MNE groups already use APAs to achieve up-front legal certainty to manage this risk. 

Whilst there are clear benefits to agreeing an APA, these are typically only bilateral agreements and restricted to transfer pricing and profit attribution questions. ICAP offers the opportunity for multilateral engagement between MNE groups and tax administrations in a voluntary risk assessment and assurance programme, and, unlike APAs, ICAP is suitable for a broad spectrum of international and cross-border risks.