The Australian Taxation Office (ATO) has issued a notice on its participation in the International Compliance Assurance Programme (ICAP) launched by the OECD for MNE groups.
International Compliance Assurance Programme (ICAP)
ICAP is a voluntary risk assessment and assurance programme to facilitate open and co-operative multilateral engagements between multinational enterprise (MNE) groups willing to engage actively and transparently with tax administrations in jurisdictions where they have activities.
By co-ordinating conversations between an MNE group and multiple tax administrations, ICAP supports the effective use of transfer pricing documentation, including the MNE group's country-by-country (CBC) report, as part of a multilateral risk assessment process. Where an area is identified as needing further attention, work conducted in ICAP can improve the efficiency of compliance action taken outside the programme, if needed.
The OECD has noted that the key benefits of ICAP include:
- targeted and consistent interpretation and use of CBC reports
- better use of resources for tax administrations and MNEs
- a co-ordinated and transparent approach to engagement
- faster multilateral tax certainty
- fewer disputes entering into a mutual agreement procedures (MAP).
More information about ICAP, including a handbook for the multilateral risk assessments and a list of the participating tax administrations, can be found on the OECD website.
ICAP complements the ATO's Top 100 risk categorisation approach and Top 1,000 tax performance program, as well as other initiatives, such as our advance pricing arrangement and advice and guidance programs to provide tax certainty to MNEs.
For more information about the ATO's involvement in ICAP email ICAP@ato.gov.au. Australian multinationals that wish to discuss possible participation in ICAP should contact us via this email address.