UAE FTA issues Corporate Tax Guide on Advance Pricing Agreements

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.

The UAE Corporate Tax Law¹ requires related‑party transactions (Controlled Transactions) to follow the arm’s‑length principle, and it introduces a framework allowing taxpayers to agree pricing with the FTA in advance. The new APA Guide puts this mechanism into practice and aligns the UAE with OECD standards, strengthening transparency and tax certainty.

 

Overview of APAs

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

An APA is intended for situations where taxpayers face significant uncertainty in determining the arm’s‑length price of controlled transactions, such as complex arrangements or transactions that have previously attracted audit attention. It applies for a minimum of three (3) tax periods and a maximum of five (5) tax periods.

In addition, only transactions meeting a materiality threshold of AED 100 million per tax period are generally eligible for the APA programme, although the FTA may consider lower amounts where strong justification exists.

The process of obtaining an APA is expected to take several months to over a year and consists of four key stages: pre‑filing consultation, submission of the APA application, evaluation and negotiation, and conclusion and implementation.

 

Conclusion

The UAE’s APA programme represents a significant development in the country’s TP framework. It provides a robust and proactive mechanism for managing TP risks and securing certainty for complex or high-value transactions.

Early engagement with the FTA, adequate preparation, and ongoing compliance are essential for successful APA application. As the APA and Mutual Agreement Procedure frameworks continue to evolve, businesses should stay informed and consider these tools as part of their broader tax and TP management strategy in the UAE.

For deeper insights and a more extensive analysis of the UAE APA framework, please refer to our earlier article "UAE launches Advance Pricing Agreements programme: what businesses need to know".

 

Key takeaway

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. The Guide sets out when an APA is appropriate, the eligibility criteria, and the multi‑stage process taxpayers should expect.

With APAs now formally in place, the UAE has taken a major step toward OECD‑aligned transfer pricing practice, helping reduce disputes and improve transparency.

---

¹Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses.