IEIM140100 - Overview
The International Compliance Assurance Programme (ICAP) is a voluntary programme facilitating multilateral engagements between Multinational Enterprise groups (MNE groups) and tax administrations. ICAP involves a high-level risk assessment of transfer pricing and permanent establishment risks and is designed to provide increased tax certainty for both MNE groups and tax administrations. Central to ICAP is the concept of open and transparent dialogue between the MNE group and the participating tax administrations.
ICAP provides MNE groups with an outcome letter that sets out how each participating tax administration views the level of risk for the years reviewed. An additional 2 years comfort may be provided as part of a roll forward period if the transactions are viewed as low risk. Whilst ICAP does not provide legal certainty, it does give an added level of comfort over the transactions considered within the risk assessment. As such ICAP is a resource efficient means by which MNEs can achieve greater tax certainty.