Eight Countries Discuss Cooperation In Risk Assessment

The OECD International Tax Conference sponsored by the OECD, USCIB, and BIAC was hosted in Washington, DC. The annual conference allowed the USA business community to interact with key representatives from the OECD Tax Officials. Tax administrations aim to establish a multilateral conversation when go through a risk assessment together.

Background

The International Compliance Assurance Program (ICAP) was referred at the annual conference by Achim Pross, the Head of International Cooperation and Tax Administration Division at the OECD Centre for Tax Policy and Administration. The program was piloted by Italy, US, UK, Spain, Austria, Germany, Netherlands, and Canada. Topics covered at the conference included improving tax certainty, dispute resolution mechanism, tax reform trends, transfer pricing, etc.

Multilateral Conversation

Tax administrations aim to benefit from a multilateral conversation when going through a risk assessment together. Initially, the scope of such reviewing is limited to transfer pricing and permanent establishment risks, but more issues could be included in the future and more countries (initially 47 countries) would be involved.

Compared With APA

A faster low-risk stage by submitting a packet of information voluntarily, large multinationals which do not engage in tax avoidance, but are still subject to country-by-country report, will be given the opportunity to explain their fillings. If a favorable finding was given after the joint risk assessment, each country involved in the assessment would provide some form of assurance to the multinational taxpayer that the country is unlikely to apply compliance resources to the covered risk, but this does not exclude the risk thoroughly. Compared with APA, the program is seeking a balance which provides less certainty but is much faster.

Sources: USCIB, USCIB - Washington Update,  MNE Tax
 

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