The Organisation for Economic Cooperation and Development (OECD) on 23 January 2018 announced a new pilot program for multilateral risk assessment of large multinational entity (MNE) groups. The pilot program—the International Compliance Assurance Program—is a voluntary program that will use country-by-country (CbC) reports and other information to facilitate open and co-operative multilateral engagements between MNE groups and tax administrations. The goal is to provide early tax certainty and assurance for both taxpayers and tax administrations.
As noted in an OECD release, the coordination of conversations between an MNE group and tax administrations will be based on effective use of transfer pricing information—including the information included in the MNE group's CbC report, Master file and Local file. It is intended that more efficient use of resources both for the MNE group and for tax administrations will result in fewer cases entering into mutual agreement proceedings (MAP).
The tax administrations of eight countries—Australia, Canada, Italy, Japan, the Netherlands, Spain, the United Kingdom, and the United States—are participating in the launch of the pilot program. A multilateral assessment of specific international tax risks posed by each MNE group in the pilot program is scheduled to begin during the first half of 2018 and to be completed within 12 months.
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