ICAP — International Compliance Assurance Programme (OECD)

The International Compliance Assurance Programme (ICAP) is a voluntary, cooperative risk assurance process that enables multinational enterprises to obtain assurance on their key transfer pricing risks and selected other international tax risks by engaging simultaneously with tax authorities in multiple countries. It does not replace an audit but gives both tax authorities and companies an efficient basis for a joint risk assessment.

• Voluntary: Only initiated at the MNE's (multinational enterprise's) request — no compulsion
• Multilateral: Multiple tax authorities simultaneously review CbCR data and TP documentation
• Outcome: Risk assessment ('low risk' / 'not low risk'), not a binding ruling
• CbCR prerequisite: Participation requires CbCR filing under BEPS Action 13

ICAP was launched by the OECD as a pilot in 2018 (ICAP 1.0) with eight participating tax authorities. Following a positive evaluation, ICAP 2.0 expanded to 17 tax administrations in 2019. The current ICAP 3.0 phase (since 2022) is open to all OECD/G20 tax authorities and encompasses more than 20 countries. Since 2023, more than 25 tax administrations actively participate in the programme. ICAP forms part of the broader OECD cooperative compliance agenda, complementing MAP and APAs.

ICAP is open to multinational enterprises that:

• File CbCR under BEPS Action 13
• Operate in at least two ICAP participating countries
• Can provide complete Master File and Local File documentation

Risks typically covered include transfer pricing for goods, services and intangibles, and attribution of profits to permanent establishments. The programme is not suitable for highly complex restructurings or disputed structures.

The ICAP process is structured in three phases:

1. Phase 1 — Selection and risk identification: Review of CbCR data and identification of potential risks
2. Phase 2 — Documentation and multilateral risk assessment: Gathering of TP documentation and joint analysis by the participating tax authorities
3. Phase 3 — Outcome: Each participating tax authority issues an individual outcome letter

• Submission of a complete CbCR (BEPS Action 13)
• Provision of Master File, Local Files and further TP documentation on request
• Designation of a lead tax authority (typically the jurisdiction of the ultimate parent)
• Willingness for open communication and prompt responses to queries
• Consent to sharing CbCR and TP data with all participating tax authorities
• Acceptance that the outcome is non-binding (not an APA)

3 corrections:
- ICAP 2.0 had 17 tax administrations, not 12
- ICAP 2.0 launch date: March 2019, not October 2019
- Official OECD URL returns 403 error
2 updates:
- No mention of ICAP 4.0 or developments after 2022
- ICAP 3.0 was launched in 2022, not 2021
3 clarifications.
2 notes.