The UAE Federal Tax Authority has issued a new Corporate Tax Guide on Advance Pricing Agreements (CTGAPA1), providing detailed procedural guidance on the APA framework. The guide explains the scope, eligibility, application process, and benefits of APAs, and ensures compliance with the arm’s length principle under the UAE Corporate Tax Law.
The UAE Federal Tax Authority (FTA) has released a new Corporate Tax Guide on Advance Pricing Agreements (CTGAPA1) in December 2025. The guide outlines the procedural framework for APAs and covers an overview of the APA programme, applicable procedures, and the monitoring and review process.
Transfer Pricing (“TP”) provisions were introduced in the UAE along with the Corporate Tax Law. Article 34 of the Corporate Tax Law requires that transactions or arrangements between Related Parties must meet the arm’s length standard. Article 59 of the Corporate Tax Law permits the submission of an application for an Advance Pricing Agreement (“APA”) in the determination of the Arm’s Length Price with respect to Controlled Transactions or arrangements proposed or entered into by the Person.
Overview of APAs
The APA programme offers a voluntary mechanism for a Person to enter into an agreement for determining the Arm’s Length Price of Controlled Transactions over a period of time and preventing the risk of TP disputes and litigation. The FTA encourages the adoption of the APA programme between the FTA and the Person.
Key benefits of an APA include:
- Enhanced predictability: Enhances predictability regarding the tax treatment of Controlled Transactions for Tax Periods.
- Facilitated collaboration: Provides an opportunity to engage with the FTA in a cooperative environment.
- Prevention from risk of TP disputes: Reduces the need for time-consuming examinations of complex TP issues and mitigates the risk of tax litigations.
- Prevention of double taxation: Reduces or effectively eliminates double taxation through bilateral APAs.
- Streamlined compliance: Simplifies record-keeping by clearly outlining the required documentation to ensure compliance with the APA.
Scope of an APA
An APA will set out the criteria for determining the Arm’s Length Price in relation to Controlled Transactions entered or to be entered by that Person, over a fixed period of time. The manner in which an Arm’s Length Price is determined in an APA may include the application of one or a combination of the TP methods under the Corporate Tax Law, along with such adjustments or variations as may be necessary to do so. At the initial stage, UAPAs shall only cover prospective periods.
An APA may, among other elements, include:
- Parties to the APA,
- Controlled Transactions covered by the agreement,
- Tax Periods covered by the agreement,
- Agreed TP criteria for determining Arm’s Length Price, including the definition of any relevant terms to be used in the agreement,
- Critical assumptions, and
- Documentation and implementation mechanism.
An APA entered into shall be binding on:
- the Person in whose case and in respect of the Controlled Transactions in relation to which the agreement has been entered into, and
- The FTA is subject to conditions prescribed in Section 5.
Eligibility for an APA
A Person who has proposed or entered into domestic and/or cross-border Controlled Transactions is eligible to enter into an APA under the APA programme. However, such Controlled Transactions shall meet the materiality threshold prescribed in Section 3.5 to apply for an APA.
A Person may apply for an APA if there are significant uncertainties in determining the appropriate criteria for establishing the Arm’s Length Price of proposed or existing Controlled Transactions. This could include cases involving complex Business operations or Controlled Transactions, or where such Controlled Transactions have been historically subject to audit. Controlled Transactions that fall under safe harbour provisions, including low value-adding intra-group services, shall not be taken into consideration for APAs.
Domestic Controlled Transactions may be covered under an UAPA if the Person and its domestic Related Party are subject to different tax rates or are eligible for any tax incentives under the Corporate Tax Law. Domestic Controlled Transactions that may be covered under a UAPA include, but are not limited to, the following Controlled Transactions undertaken:
- by a Qualifying Free Zone Person with a Person based in mainland or vice versa, • by a Business or Business Activity of a Government Entity,
- by a Business or Business Activity of a Government Controlled Entity that is not its Mandated Activities,
- between an Extractive Business and another Business of such Person, or
- between a Non-Extractive Natural Resource Business and another Business of such Person.
Filing a pre-filing consultation and APA application
Subject to satisfaction of the eligibility criteria, a pre-filing consultation and APA application (collectively referred to as “APA Request”) must be filed by a Person, its Tax Agent or Legal Representative on behalf of the Person.
Note that only a Tax Agent registered for Corporate Tax purposes with the FTA may submit the APA Request on behalf of the Person in the prescribed form.
In the case of a Tax Group, only the Parent Company of that Tax Group is permitted to submit the APA Request on behalf of the Tax Group or its members. An APA Request submitted by any Person other than those mentioned above shall not be accepted.
Pre-filing consultation, APA application, or any other information required during the APA process can be submitted from 30 December 2025 by email to APA@tax.gov.ae, or via EmaraTax (from the date that shall be announced).
Timeline of an APA application
A Person must submit the UAPA application within two months from the date of approval notification of pre-filing consultation by the Authority, or at least twelve months prior to the commencement of the first Tax Period to be covered under the UAPA, whichever is earlier.
