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Advance Pricing Agreements in the UAE: How the New APA Regime Works
How the UAE APA programme works: AED 100m threshold, AED 30,000 fee, timelines and who should apply. Book a free transfer pricing consultation.
Transfer pricing is one of the biggest sources of uncertainty under UAE corporate tax. An advance pricing agreement in the UAE lets a business agree its transfer pricing method with the Federal Tax Authority (FTA) before the transactions happen. The FTA launched its APA programme at the end of 2025. This guide explains who can apply, what it costs and whether it is worth it for your group.
What an advance pricing agreement is
An APA is a binding agreement between a taxpayer and the FTA on how related-party transactions will be priced for a set number of future tax periods. If you follow the agreed method, the FTA will accept your pricing as arm's length for those periods. That replaces year-by-year debate with certainty agreed up front.
APAs sit within the UAE's transfer pricing rules in the Corporate Tax Law (Federal Decree-Law No. 47 of 2022). These require transactions with related parties to meet the arm's length standard, and allow the FTA to adjust prices that don't.
The UAE APA programme at a glance
The FTA published its Corporate Tax Guide on Advance Pricing Agreements (CTGAPA1) on 31 December 2025, under Article 59 of the Corporate Tax Law.
| Feature | UAE position |
|---|---|
| Types available now | Domestic unilateral APAs, accepted from December 2025 |
| Cross-border unilateral APAs | From a date to be announced in 2026 |
| Bilateral and multilateral APAs | Later phases |
| Minimum size | AED 100 million of covered transactions per tax period |
| Application fee | AED 30,000 |
| Renewal or amendment fee | AED 15,000 |
| Term | 3 to 5 tax periods |
| Excluded | Low value-adding services and other safe harbour transactions |
The fees come from Cabinet Decision No. 174 of 2025 on FTA service fees, which applies from 1 January 2026.
Who should consider an APA
An APA is not for every group. It suits businesses where:
- related-party transactions covered by the APA reach at least AED 100 million a year;
- the pricing method is complex or open to interpretation, for example intangibles, financing or principal structures;
- the amounts at stake justify the fee and the effort of a detailed application;
- the group wants certainty before a restructuring, an investment or a listing.
For smaller groups, robust transfer pricing documentation is usually the better tool.
How the APA process works
1. Pre-filing
The process starts with a pre-filing stage where you discuss the proposed APA with the FTA. This helps both sides decide whether an APA is suitable before a formal application.
2. Formal application
Under the FTA guide, the formal application is due within two months of pre-filing approval or 12 months before the start of the first covered tax period, whichever is earlier. Commentators have noted the guide is not fully consistent on this timing, so confirm the deadline with the FTA during pre-filing.
3. Review and negotiation
The FTA reviews your functional analysis, the chosen transfer pricing method, comparables and critical assumptions, and may ask for more information.
4. Agreement and annual compliance
Once signed, you apply the agreed method and file an annual declaration confirming compliance. The guide sets this within 90 business days of signing, or by the corporate tax return deadline if later.
How APAs fit with transfer pricing documentation
An APA does not remove your other transfer pricing duties. Keep these in mind:
- Master File and Local File: required where the business has revenue of AED 200 million or more, or belongs to a multinational group with consolidated revenue of AED 3.15 billion or more (Ministerial Decision No. 97 of 2023).
- Submission on request: the files must be provided within 30 days of an FTA request.
- Transfer pricing disclosure form: filed with the corporate tax return when related-party transactions exceed AED 40 million in total. Each category above AED 4 million is listed separately.
A well-prepared Local File is often the starting point for an APA application, because it already contains the functional analysis the FTA will want to see.
Benefits and drawbacks
Benefits
- Certainty on pricing for 3 to 5 years.
- Lower risk of transfer pricing adjustments and penalties.
- A more cooperative relationship with the FTA.
Drawbacks
- Fees and adviser costs.
- Significant disclosure of your business model to the FTA.
- Ongoing monitoring of critical assumptions, which can end the APA if business conditions change.
How GULF CONSULT can help
GULF CONSULT's corporate tax team assesses whether an APA makes sense for your group, prepares Master and Local Files, runs benchmarking studies and supports pre-filing discussions and applications with the FTA.
Related services: Corporate tax advisory, Valuation & growth advisory, UAE corporate tax guide.
Book your free consultation
Wondering whether an APA would give your group certainty worth the cost? Book GULF CONSULT's free 30-minute consultation. Email [email protected], call +971 58 600 4833 or message us on WhatsApp.
Frequently Asked Questions
When did the UAE start accepting advance pricing agreements?
The FTA published its APA guide on 31 December 2025 and began accepting domestic unilateral APAs in December 2025. Cross-border unilateral APAs are expected to open from a date announced in 2026.
What is the minimum transaction value for a UAE APA?
AED 100 million of covered transactions per tax period.
How much does a UAE APA cost?
The FTA fee is AED 30,000 for an application and AED 15,000 for a renewal or amendment. Adviser fees are separate.
How long does a UAE APA last?
Between three and five tax periods.
Sources
This article is general information, not advice for your situation. Rules change; check the current position or speak to an advisor before acting.
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