OECD: Updated International Compliance Assurance Programme (ICAP) FAQs
Expanded list of “frequently asked questions” (FAQs)
The Organisation for Economic Cooperation and Development (OECD) on June 4, 2024, published expanded “frequently asked questions” (FAQs) on the International Compliance Assurance Programme (ICAP), a multilateral risk assessment program for transfer pricing and permanent establishment issues.
The updated FAQs provide additional detail regarding ICAP coverage, what taxpayers can participate in ICAP, and the participation of external advisors in the ICAP process. The FAQs follow the release earlier this year of ICAP statistics, which show that ICAP can be a powerful tool for preventing disputes.
The list of questions marked as “new” are:
4. How many periods does an ICAP risk assessment cover, and is there a possibility for a roll forward of the outcomes?
8. My MNE group’s Ultimate Parent Entity (UPE) is resident in a jurisdiction that is not participating in ICAP. Does this mean that my MNE group cannot submit a request for an ICAP risk assessment?
9. My MNE group’s Ultimate Parent Entity (UPE) is resident in a jurisdiction that participates in ICAP. Is it possible to approach another tax administration participating in ICAP and request that it acts as a Surrogate LTA?
10. My MNE group has already participated in an ICAP risk assessment. Is my MNE group eligible to request an additional ICAP risk assessment? And if so, are there specific requirements for such requests (e.g., minimum time periods between ICAP risk assessments)?
11. My MNE group has consolidated group revenues below the threshold for country-by-country reporting (CbC reporting) in the jurisdiction where the Ultimate Parent Entity (UPE) of the MNE group is resident. Does this mean my MNE group is not able to apply for an ICAP risk assessment?
12. Can my MNE group use its external tax and/or legal advisors to assist it in ICAP?
For further information on ICAP, view the replay of a joint KPMG-USCIB webcast featuring OECD, IRS, and industry speakers discussing the ICAP program and their experiences.