IEIM140200 - Background

IEIM140200 - Background

ICAP started as a pilot in January 2018. involving eight tax administrations. The key driver behind the development of ICAP was to provide a new pathway to tax certainty for MNE groups and tax administrations.

Following the completion of the first pilot, a second pilot with 19 tax administrations taking part, was announced in March 2019. The second pilot sought to test new approaches and the learnings from the first pilot. Following the successful completion of the second pilot, the OECD’s Forum on Tax Administration (FTA) agreed ICAP can roll out as a formal programme.

The UK has played an active role in both ICAP pilots and has confirmed it will continue to participate in ICAP.

ICAP provides a number of benefits for MNE groups and tax administrations, these include:

• A fast, clear route to a level of increased tax certainty, through a managed process with clear timelines.
• Providing an opportunity for MNE groups and participating tax authorities to talk through Country by Country (CbC) reports and have the opportunity to ask questions and share their perspectives as to the tax risks identified.

- MNE groups engage simultaneously with multiple tax administrations, saving resource and time.

• Fewer disputes entering into MAP

The OECD publish a list of jurisdictions participating in ICAP here.