UAE launches Advance Pricing Agreements programme: what businesses need to know

Background

On 31 December 2025, the UAE Federal Tax Authority (FTA) issued its long-awaited Corporate Tax Guide on Advance Pricing Agreements (APAs). The guide provides clarity and procedural guidance for taxpayers seeking certainty on transfer pricing (TP) matters under the UAE Corporate Tax Regime.

This article outlines the key features of the UAE APA programme, including eligibility, compliance requirements, and practical considerations for businesses operating in the UAE.

The UAE Corporate Tax Law¹, introduced TP provisions requiring transactions between related parties (Controlled Transactions) to comply with the arm’s length principle. Article 59 of the law permits taxpayers to apply for an APA to agree in advance the arm’s length pricing of Controlled Transactions. The issuance of the APA Guide operationalises this provision and aligns the UAE framework with international best practices and OECD guidelines, reinforcing the UAE’s commitment to transparency and tax certainty.

 

Overview of APAs

An APA is a formal agreement between a taxpayer and the FTA that establishes the criteria for determining the arm’s length price of specified Controlled Transactions with related parties over a defined period. The APA mechanism aims to provide tax certainty, prevent TP disputes, facilitates collaboration with the FTA and mitigate the risk of double taxation.

Types and introduction of the APA programme

The UAE APA programme is being rolled out in phases:

• Unilateral APA (UAPA): An agreement between the FTA and a taxpayer, binding only for UAE tax purposes. Domestic Controlled Transactions are accepted from December 2025, whereas for cross-border Controlled Transactions, the commencement will be announced in 2026.
• Bilateral/Multilateral APA (BAPA/MAPA): Agreements between the FTA and one or more foreign tax authorities. The Mutual Agreement Procedure (MAP)² provisions of the UAE tax treaties will form the legal basis for these types of APAs. These will provide certainty across multiple jurisdictions but will be introduced in later phases.

APA timeline

A UAPA application must be submitted within two months of receiving pre-filing approval or at least 12 months before the start of the first tax period to be covered, whichever is earlier.

The FTA has stated its intention to conclude APA processes efficiently and in line with OECD best practice timelines, provided that taxpayers submit complete and timely information. If additional details are requested, they must be provided within 40 business days of the request.

APA term

At the initial stage, an APA may be applied for a minimum of three tax periods and a maximum of five tax periods.

APA fees

A non-refundable fee of AED30,000 is payable at the time of filing an APA application. This fee also covers any subsequent revisions or amendments to the application.

For APA renewals, the applicable non-refundable fee is reduced to AED15,000.

 

Eligibility criteria

Covered transactions

A taxpayer may apply for an APA where there is significant uncertainty in determining the arm’s length price of proposed or existing Controlled Transactions. This typically includes situations involving (i) complex business models or transactions; or (ii) Covered Transactions that have historically been subject to audit or dispute.

Controlled transactions that fall under safe harbour provisions, including low value-adding intra-group services, are excluded from the APA programme.

Domestic controlled transactions may be covered by a UAPA where the parties are subject to different tax rates or benefit from tax incentives under the Corporate Tax Law (e.g., Controlled Transaction between a regular (mainland) taxpayer and a Qualifying Free Zone Person, or between a regular taxpayer and a government-controlled entity).

Who can file an APA request

An APA request may be filed by the taxpayer (or the parent company of a tax group), or by a duly appointed Tax Agent or Legal Representative acting on behalf of the taxpayer.

 

Materiality threshold

Only transactions meeting a materiality threshold of AED100 million per tax period are eligible for an APA. However, the FTA may accept applications below this threshold where there is strong justification demonstrating that an APA would ensure compliance and certainty.

Meeting the materiality threshold alone does not guarantee acceptance. The FTA retains discretion to accept or reject applications based on the specific facts and circumstances, including the complexity of the Controlled Transactions, the level of tax risk involved, and the overall benefit of entering into an APA.

 

Key stages of the APA process

1. Stage 1 - Pre-filing consultation: The taxpayer submits a pre‑filing consultation request (using the prescribed form). This allows the FTA to assess suitability of the case including the proposed scope, covered transactions, methodology, critical assumptions, complexity, and risks. The FTA may request meetings, either virtual or in‑person, as part of this assessment. This stage is non-binding for both the FTA and the taxpayer.  

The FTA aims at concluding pre-filing consultation within six to nine‑months from receipt of the pre-filing request.

2. Stage 2 – Filing of the APA application: A taxpayer may submit an APA application after receiving the notification from the FTA to proceed. The application must be filed within two months of the notification or at least twelve months before the start of the first covered tax period, whichever is earlier.

The application must include all information specified in the prescribed form, including details of the covered Controlled Transactions and tax periods, the proposed TP methodology and pricing, and relevant supporting analysis (including industry, functional and economic analysis, and the critical assumptions underpinning the proposed approach).

3. Stage 3 - Evaluation and negotiation: After completing site visits, interviews, and collecting all necessary information, the FTA evaluates the APA application and prepares a TP analysis setting out the agreed methodology, pricing criteria, critical assumptions and any other relevant terms. The taxpayer is required to provide written feedback within 30 business days, and discussions may follow upon request.

If agreement cannot be reached, the APA application will be closed without conclusion, and fees paid will not be refunded.

4. Stage 4 - Conclusion and implementation of an APA: Where agreement is reached, the FTA and a taxpayer finalise and sign the APA and discuss its implementation.

A taxpayer may withdraw an APA application at any prior to conclusion. However, withdrawal without valid justification at an advanced stage is discouraged, and fees remain non-refundable. Once signed, the APA is legally binding for the specified Controlled Transactions and tax periods, provided all terms are met. The FTA will not challenge the agreed pricing or methodology for those periods. An APA does not, however, set a precedent for other periods or other taxpayers even when the facts and circumstances are similar.

 

APA Monitoring and renewal

Annual Declaration

Taxpayers with an APA in force must file an APA Annual Declaration for each covered tax period using the prescribed form. The declaration must confirm compliance with the APA’s terms and critical assumptions and must be filed within 90 business days from the date of signing the APA or by the corporate tax return filing deadline, whichever is later.

Ongoing review

The FTA may review the Annual Declaration to verify adherence to the APA’s terms, including the accuracy of representations, consistent application of the agreed TP method, correctness of supporting data, and validity of critical assumptions. If issues are identified, the FTA will notify the taxpayer, which may result in no changes, a revision (by mutual agreement), or cancellation of the APA if matters cannot be resolved.

The FTA may, at its own discretion, revise an APA if there are changes in law, business, economic conditions, or other exceptional circumstances. If revision is not feasible or mutual agreement cannot be reached, the APA may be cancelled prospectively from the relevant tax period in which the event occurred, while remaining effective for prior tax periods covered under the APA.

Revocation of an APA will occur if there is a material misrepresentation, failure to comply with material terms, or breach of critical assumptions. Revocation takes effect from the first tax period covered, and affected transactions revert to standard tax law provisions which may result in TP adjustments and heavy administrative penalties.

APA renewal

Finally, a taxpayer may apply to renew an APA where there are no material changes to the business, the Controlled Transactions, or the underlying the critical assumptions. Renewal requests must be submitted at least three months before expiry and follow a streamline process without a pre-filing consultation, subject to the reduced renewal fee.

 

Practical considerations and conclusion

The UAE APA programme provides a robust and proactive framework for managing transfer pricing risk and securing certainty for complex or high-value transactions. Successful outcomes will depend on early engagement with the FTA, strong technical support, and disciplined ongoing compliance.

While the FTA has signalled an intention to align APA timelines with OECD best practice, the duration will ultimately reflect case complexity and the quality and timeliness of taxpayer submissions. In practice, APAs may take several months to over a year to conclude, with pre-filing consultations typically lasting six to nine months.

As the APA and MAP frameworks continue to evolve, businesses should assess how these tools can be deployed strategically, both to prevent disputes and to support broader transfer pricing governance across the group, particularly where complexity or cross-border exposure is increasing.

Please contact us if you would like to learn more, and for more information on APAs and MAPs processes and acceptance criteria by jurisdiction please visit our APA & MAP Country Guide.

 

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¹Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses
²Read more about the MAP procedure in the UAE: UAE Ministry of Finance issues guidance on Mutual Agreement Procedure | DLA Piper