The Federal Tax Authority (‘FTA’) has issued a Corporate Tax Guide, outlining the procedural framework for Advance Pricing Agreements (‘APAs’). The APA program offers a voluntary mechanism that allow taxpayers to agree in advance on the determination of the Arm’s Length Price (‘ALP’) for controlled transactions over a specified period, thereby mitigating transfer pricing risks, reducing the likelihood of disputes, litigation and double taxation, and enhancing predictability and compliance efficiency.
1. Types of APA
- Unilateral Advance Pricing Agreement (‘UAPA’): A UAPA is an agreement between a taxpayer and the FTA in respect of domestic and cross-border controlled transactions. It provides taxpayer with upfront certainty on the key assumptions, methodologies, and criteria to be applied in determining the ALP for the covered controlled transactions during the APA term.
A UAPA is binding only on the FTA and the taxpayer that is a party to the agreement and offers tax certainty solely from a UAE Corporate Tax perspective.
Consequently, there remains a risk of double taxation where a foreign tax authority does not accept the UAPA and makes corresponding transfer pricing adjustments. In such circumstances, the taxable person may need to seek relief through a Bilateral Advance Pricing Agreement (‘BAPA’), a Multilateral Advance Pricing Agreement (‘MAPA’), or the Mutual Agreement Procedure (‘MAP’).
- BAPA / MAPA: A BAPA or MAPA is an agreement or a set of agreements, concluded between the competent authorities of two or more jurisdictions through the MAP. Such APAs provides tax certainty for controlled transactions in both the UAE and the relevant foreign jurisdiction(s).
The FTA is implementing its APA programme on a phased basis, commencing with UAPAs. Further guidance, including timelines for accepting APA applications other than UAPAs, will be issued once BAPAs and MAPAs are implemented.
2. Scope and Eligibility
A taxable person may apply for an APA where the determination of the ALP involves significant uncertainty arising from complex business operations. APAs are generally available for domestic or cross-border Controlled Transactions with an aggregate actual or expected value of at least AED 100 million per Tax Period. This threshold serves as a materiality guideline rather than a strict eligibility criterion, and the transactions below this level may also be considered where the taxpayer can demonstrate that an APA ensures compliance and provide tax certainty.
3. The Four Stages APA procedure
Stage 1: Pre-filing Consultation:
A pre-filing consultation must first be requested with the FTA to discuss the proposed controlled transactions, potential transfer pricing issues, and the proposed pricing methodology. This stage enables the FTA to assess suitability of the case for an APA. During this process, the FTA may seek additional information, conduct meetings, or reject the request if concerns arise. An APA application may be filed upon receipt of a formal notification from the FTA permitting the applicant to proceed.
Stage 2: Filing of an APA application
Stage 3: Evaluation and negotiation
Stage 4: Concluding an APA and implementation
Pre-filing consultation requests, APA applications, or any additional information required during the APA process can be submitted by email to APA@tax.gov.ae from 30 December 2025 onwards.
The Guide also explains the timelines for each stage, the overall process flow, reasons for rejection, information requirements, applicable conditions and the prescribed forms and formats to be used during the APA process.
4. APA Period
An APA may be applied for a minimum of three and a maximum of five tax periods. Initially, UAPAs shall only cover prospective periods, and no roll-back to prior tax periods is permitted.
5. APA fees
- New APA Application: A non-refundable fee of AED 30,000, inclusive of any revisions or amendments
- APA Renewal: A non-refundable fee of AED 15,000.
6. Timeline for an APA application
A UAPA application must be submitted within (i) two months from the date of the Authority’s approval notification of pre-filing consultation, or (ii) at least twelve months prior to the commencement of the first Tax Period to be covered under the UAPA, whichever is earlier.