Trade & investment

ICC: co-operative compliance and ATP programmes can build confidence in tax systems

  • 10 May 2019

The International Chamber of Commerce [ICC] has published a policy paper on co-operative compliance and issued recommendations on Accredited Tax Payers (ATPs) to improve trust and create confidence in tax systems.

ICC supports measures aimed at increasing tax certainty to create a more favourable environment for trade and investment.  As such, ICC is committed to fostering trust and efficient co-operation between governments and business to improve tax administrative efficiency and enhance certainty for investment.

The benefits of Cooperative Compliance

As part of this commitment, ICC has issued a policy paper on the benefits of co-operative compliance, a concept that builds on a reciprocal relationship of trust and cooperation between businesses and tax authorities.

Today as revenue bodies and businesses work to find their footing in complying with international standards outlined in the Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) recommendations, ICC believes that co-operative compliance is ever more relevant as a cost effective and efficient solution for the benefit of both business and tax administrations.  For ICC, collaboration between government and business is essential to help define the contours of a suitable tax framework that encourages business activities, job creation and economic growth.

The ICC paper intends to raise the profile of co-operative compliance and to encourage broader application of this concept to support a balanced and effective tax system, built on confidence and collaboration.

Some of the practical aspects outlined in the paper were explored by representatives of business, academia, tax administrations, the OECD and the European Commission at the ICC/Vienna University of Economics and Business (WU) Global Tax Policy Center workshop, which took place in London on 11-12 March 2019. This workshop is part of a broader University of Vienna initiative aimed at promoting a better dialogue between government and business. A further session is scheduled to take place on 16-17 December 2019 in Vienna.

Recommendations for Accredited Tax Payers (ATP)

As part of this commitment to trust and clarity, ICC has also issued recommendations on Accredited Tax Payers (ATP). ATP programme aims to establish a mutually recognised system to streamline the tax administration process for trusted tax payers who meet a certain set of criteria.

By extending preferential status to trusted tax payers, ICC believes that ATP programmes can create benefits for both tax administrators and business everywhere. For tax administrations, ATP programmes reduce processing costs, expedite turn-around times, optimise the allocation of in-house resources, and provide for a more predictable forecast of tax revenues.

Similarly, ICC finds that ATP programmes reduce costs and administrative burdens for business. Besides cost savings, ATP programmes simplify the bureaucratic process for business through the establishment of a single clear point of contact for taxpayers to bring forward relevant tax matters. 

These benefits can only be realised within the framework of a global set of standards. ICC suggests the following recommendations for creating a global set of standards for ATP programmes:

Regular payment of taxes

The tax payer commits to the responsible fulfilment of its duties to pay required taxes in countries where it operates.

Transparent information sharing

The tax payer is committed to public transparency as one of the guiding principles of its tax activities.

Reliable internal control systems

The tax payer can prove that they have a Code of Ethics, an integrated Risk Control System, and tax policy procedures or controls for main taxes. ICC recommends that tax payers and tax administrations come to an agreed escalation procedure to prevent disturbance in the case of unforeseen events.

Proof of solvency

The tax payer will provide tax authorities with the required information and documentation as soon as possible.

Commitment to report illicit behaviours

The tax payer is committed to collaborate in the detection and search of solutions regarding fraudulent fiscal practices in the countries in which it operates, or maintains relevant relationships.

By establishing a mutually recognised ATP system, tax administrations can guarantee certainty and trust through a clear set of rules and procedures.

Read the complete ICC Policy Paper on Co-operative Compliance and Recommendations on Accredited Tax Payers.

Learn more about the Vienna University of Economics and Business (WU) Global Tax Policy Center