International Compliance Assurance Program (ICAP) frequently asked questions


The following is a list of frequently asked questions (FAQs) to help U.S. multinational enterprises (U.S. MNEs) considering whether to participate in the International Compliance Assurance Program (ICAP).  General FAQs are also posted on the OECD website International Compliance Assurance Programme – FAQs ( PDF.  The questions and responses below are specific to U.S. MNEs that may be interested in ICAP.

NOTE: These FAQs are not official pronouncements of law or directives and cannot be used, cited or relied upon as such. These FAQs provide a general discussion of a process and are a means for collaborating and sharing knowledge with U.S. taxpayers. These FAQs may not contain a comprehensive discussion of all pertinent issues, law or the IRS's interpretation of current law.

A:  In order to apply for ICAP, a U.S. MNE must provide the “selection documentation package” described in the ICAP Handbook to the IRS by one of the periodic application deadline dates published on the OECD website. We recommend you contact us at for an initial consultation before submitting your application materials. The initial consultation will provide MNEs an opportunity to discuss the ICAP process with IRS personnel with experience in prior ICAP risk assessments, and to address administrative items including the specific manner in which your “selection documentation” package must be filed with the IRS.

A:  The application deadline dates are 30 September and 31 March of each year. The IRS may consider applications at any point but will coordinate the selection documentation package review with the other ICAP jurisdictions based on the bi-annual submission dates and consideration of applications from MNEs in other countries.

A:  There is no fee for a U.S. MNE to apply or to participate (if accepted) in the ICAP program.

A:  No, acceptance to ICAP is not guaranteed. The IRS will consider whether it is willing to act as the lead tax administration for a U.S. MNE based on whether it believes the MNE is suitable for ICAP (see Q&A 5 below) and the anticipated availability of IRS personnel. The IRS will explain the basis for its decision if the IRS determines it is unable to act as the lead tax administration for an MNE. The IRS may also indicate it would be willing to act as lead tax administration at another time and suggest the MNE group consider re-submitting its selection documentation package at a later date.

A:  The IRS will consider a U.S. MNE’s suitability for ICAP on a case-by-case basis. Factors the IRS may consider include but are not limited to:

  • the footprint of the MNE group in the United States;
  • the type and materiality of the MNE group’s covered transactions in jurisdictions participating in ICAP;
  • whether the MNE group has a demonstrated history of transparent and cooperative engagement with the IRS; and
  • the MNE group’s transfer pricing examination history with the IRS and the tax administrations participating in ICAP.

A:  As noted above, the IRS determines whether it will act as a lead tax administration for a U.S. MNE on a case-by-case basis. The fact that a U.S. MNE is under IRS examination does not necessarily preclude ICAP participation though an ongoing IRS examination will be a relevant factor in our decision-making process (including the tax years and issues under examination).

A:  The IRS ICAP risk assessment efforts are led by the Transfer Pricing Risk Assessment (TPRA) team, which is a dedicated group of transfer pricing practitioners that focus exclusively on transfer pricing risk assessment for taxpayers under the jurisdiction of the Large Business & International Division. The TPRA team is assisted in its risk assessment efforts by other personnel from the U.S. competent authority programs, economists, advisors, and management personnel, as appropriate.

A:  Based on our experience, U.S. MNEs typically designate one or two leads to coordinate the MNE’s participation in the program. In general, these individuals have in-depth knowledge and oversight of the MNE’s international tax and transfer pricing functions. Where necessary, the lead(s) for the MNE will coordinate with other U.S. tax personnel, local country tax personnel, and/or non-tax, business personnel within the MNE as needed.

A:  According to the ICAP Handbook, the target timelines for each stage of the ICAP process, are as follows: selection (4-8 weeks), risk assessment and issue resolution (20 to 36 weeks), and outcomes (4-8 weeks). In practice, however, the timelines vary based on several factors, including the complexity of the transactions that are included in the scope of the risk assessment, whether issue resolution is pursued during ICAP, the timely availability of information requested by the covered tax administrations, and the availability of tax administration and MNE personnel for timely discussions.

A:   In general, the IRS intends to review all transfer pricing transactions in which the United States is a counterparty (even if the jurisdiction in which the counterparty is located is not participating in ICAP). Transfer pricing transactions subject to pending and completed bilateral advance pricing agreement (APAs) will be excluded from review in ICAP. Determinations regarding other issues will be made on a case-by-case basis and the IRS will not presumptively exclude any specific categories of transactions from its review.

A:  No, if the IRS believes that a transaction presents a potential compliance risk this does not necessarily lead to an examination.  ICAP includes an optional issue resolution process that affords the MNE and the relevant tax administrations the opportunity to reach an agreement within the ICAP process on the tax treatment of a covered transaction, including whether any tax adjustments are needed for the covered period/s or for future periods.

The IRS will consider engaging in issue resolution on a case-by-case basis. Relevant factors the IRS may consider in determining whether issue resolution in ICAP is suitable in a particular case may include the materiality of the potential adjustment, the complexity of the transaction, and the extent to which there is agreement on the underlying facts of the transaction.  Issue resolution may include agreements between the taxpayer, the IRS, and the relevant tax administration(s) to adjust the transfer price of a covered transaction for one or more covered tax years.  Alternatively, the IRS may agree that a transaction that it believes  presents a compliance risk for the covered tax years can become “Low Risk” for the roll forward tax years provided certain changes are made to the MNE’s transfer pricing methodology.

Issues that cannot be resolved in ICAP may be addressed through other traditional dispute resolution processes as appropriate (e.g., a bilateral/multilateral advance pricing agreement (APA), examinations, etc.).  In general, the IRS anticipates that the learnings from ICAP will facilitate more efficient dispute resolution processes outside of ICAP.

A:  For more information on ICAP, please visit the OECD’s ICAP webpage: Forum on Tax Administration - Forum on Tax Administration (  Detailed information regarding the ICAP process is available in the ICAP Handbook posted on the OECD’s ICAP webpage.  In addition, detailed information on each jurisdiction participating in ICAP is available on the OECD’s website in the ICAP country profile section.  As noted above, MNEs interested in participating in ICAP are encouraged to contact the IRS at for further information.