The Organisation for Economic Cooperation and Development (OECD) released an updated version of its Frequently Asked Questions (FAQs) regarding the International Compliance Assurance Programme (ICAP) in December 2024.

ICAP is a voluntary programme for MNE groups and tax administrations to work together in a cooperative risk assessment and assurance process. It is designed to be an efficient, effective and co-ordinated approach to provide MNE groups willing to engage actively, openly and in a fully transparent manner with increased tax certainty with respect to certain of their activities and transactions. ICAP does not provide an MNE group with legal certainty as may be achieved, for example, through an advance pricing arrangement (APA). It does, however, give comfort and assurance where tax administrations participating in an MNE group’s risk assessment consider covered risks to be low risk. Where an area is identified as needing further attention, work conducted in ICAP can improve the efficiency of actions taken outside the programme, if needed.

The new list of FAQs are:

4. What are the ICAP application deadlines?

An MNE group may submit an application to enter ICAP at any time. ICAP previously had biannual application deadlines – 31 March and 30 September. Following feedback from MNE groups that have participated in ICAP, it was decided to remove these application deadlines and allow for applications on a rolling basis. This is intended to simplify the process for MNE groups interested in joining ICAP, which may have found the previous application deadlines restrictive.

5. What are the target timeframes for ICAP?

ICAP is broken into three stages, each with a corresponding target timeframe as follows: –

• Selection stage: 8 – 12 weeks.
• Risk Assessment stage (including issue resolution, where applicable): 30 – 45 weeks.
• Outcomes stage: 6 – 8 weeks.

These target timeframes are slightly longer than those originally published in the ICAP handbook, reflecting the experience of ICAP cases completed to date. The target timeframes for the selection stage and risk assessment stage begin when the lead tax administration notifies the MNE group that the selection stage documentation package or main documentation package are accepted, though this start date may be deferred at the request or with the agreement of the MNE group (e.g. to avoid year-end).

14. What is the MNE group’s role in determining the scope of an ICAP risk assessment?

An MNE group’s preferences regarding covered tax administrations and covered transactions will be taken into consideration by the relevant tax administrations in deciding the scope of an ICAP risk assessment. For example, during the selection stage, an MNE group is required to identify the tax administrations participating in ICAP that it would like to include as covered tax administrations and may propose to limit the scope of the ICAP risk assessment to include a specific line of business, geographic area, and/or function that is common across several participating ICAP jurisdictions (e.g., marketing and distribution).