International Compliance Assurance Program - oasis or mirage?

A comparison of the International Compliance Assurance Program (ICAP) features with other programs aimed at resolving double taxation



Francois Vincent

Francois Vincent

Principal, Tax, KPMG US

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By François Vincent, Brian Trauman, Steven Back, Clémence Bon and Irina Puchkova, KPMG LLP


In a recent paper, titled International Compliance Assurance Programme – Oasis or Mirage, which appeared in Tax Management Transfer Pricing Report on August 23, 2018, the authors reviewed and compared the international compliance assurance program (ICAP)’s salient features with those of other existing programs aimed at resolving double taxation.

Those programs are the various mechanisms involving two or more tax authorities found in or resulting from international tax treaties: the mutual agreement procedure (MAP), advance pricing arrangements (APA), joint audits, simultaneous tax examinations, and ICAP. The following table summarizes the highlights of that comparison as it relates to the following topics: (1) goals; (2) parties; (3) process; (4) documentation required; (5) timing; (6) availability; (7) benefits; and (8) drawbacks.

A full copy of the article is available for download.


Side-by-side comparison


  MAP APA* Joint Audit Simultaneous Tax Elimination ICAP
Goals Resolve double taxation in relation to past years Avoid double taxation in relation to future years Avoid double taxation in relation to future years Audit related taxpayers at the same time Avoid full audit of related taxpayers
Parties MNE and competent authorities MNE and competent authorities MNE and competent authorities MNE and tax authorities’ representatives MNE and tax authorities’ representatives
Documentation Required Extensive during audit prior to MAP** Extensive Extensive Extensive Extensive
Timing A few months to a few years 3+ years 12-18 months*** Undefined 4-14 months***
Availability Where there is an applicable tax treaty At the discretion of the relevant tax authorities At the discretion of the relevant tax authorities At the discretion of the relevant tax authorities At the discretion of the relevant tax authorities
Benefits Resolution of double taxation and potential for ACAP Avoidance of double taxation and potential application of rollback Avoidance of double taxation Assists tax authorities in having more comprehensive understanding of MNE’s operations and transactions Potential avoidance of double taxation by avoidance of full audit 
Drawbacks No obligation on tax authorities to resolve double taxation**** Expensive & can take a long time to complete No obligation on tax authorities to resolve double taxation Avoidance of double taxation is not one of the goals Not targeted to avoid double taxation*****

* Unilateral APAs are not covered in this table

** If mandatory binding MAP arbitration is available, the entire process is concluded within 3 or 4 years

*** In theory. No official statistics are available.

**** Except, generally, for MAP cases covered by mandatory binding MAP arbitration.

***** Although it may be an indirect resut if the ICAP is sucessful.


Given the comparisons outlined above, we would offer the following advice/observations:

  • Given that ICAP is in its pilot stage, it will be interesting to see how this program develops and whether the low- or no-risk characterization will become a virtual guarantee of no subsequent transfer pricing audits in the relevant jurisdictions.
  •  Similarly, it would be interesting to see whether tax authorities would be inclined to agree to a no-risk rating as part of ICAP with respect to routine transactions involving very large amounts because even a very small adjustment could bring large amounts of tax revenue.
  • Perhaps the program with the worst cost-benefit ratio is, unsurprisingly, simultaneous tax examinations, which, in all likelihood, bring absolutely no relief from double taxation and, potentially worse (backed by anecdotal evidence), can result in a classic double-whammy: both tax authorities involved take contrary positions which each differ from the taxpayer’s original filed position.
  • On the other hand, the program with the best cost-benefit ratio is probably MAP with the mandatory binding arbitration feature, and where possible, coupled with accelerated competent authority procedure (ACAP). Coupling the MAP request for past years with an APA request (with roll-back) for future years can add another level of certainty.
  • But for the fact that it is not always available and that it does not always result in an agreement, the APA program would be in the same position as the MAP for the best cost-benefit ratio, with joint audits running close behind.

In the final analysis, it is probably too early to say whether the ICAP will become the next panacea for double-tax woes, but it will be interesting to follow how it develops in practice in order to determine its relative value in the portfolio of bilateral programs targeting transfer pricing.

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These comments represent the views of the authors only, and do not necessarily represent the views or professional advice of KPMG LLP.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.

KPMG LLP, the audit, tax and advisory firm (, is the independent U.S. member firm of KPMG International Cooperative (“KPMG International”). KPMG International’s independent member firms have 197,000 people in 154 countries.