APA – Corporate Tax guide

United Arab Emirates

January 2026

Background

The Federal Tax Authority (FTA) has released the much-awaited UAE APA guide in December 2025. The guide provides comprehensive insights into the APA programme including procedures, monitoring and review mechanisms and will support taxpayers in making an informed decision on opting for the APA scheme. While the APA guidelines are not legally binding, it has been published to assist taxpayers in understanding the APA programme under the Corporate Tax regime in the UAE.

Key Features of the APA programme

1. Overview

The APA programme offers a voluntary mechanism for a Person to enter into an agreement with the FTA for determining the Arm’s Length Price of Controlled Transactions over a period of time in advance and prevent the risk of TP disputes and litigation. An APA shall be binding on the person who has entered into the agreement and the FTA.

For domestic APAs, counterparty to the transaction should also comply with the terms of the APA, though for the purpose of legal effect, there is a reference that it is binding only on the signatories to the APA.

2. Types of APAs

APAs can be categorized into three types:

• Unilateral APA: Agreement between a person and the FTA for domestic and cross border Controlled Transactions
• Bilateral APA: Agreement between competent authorities of two jurisdictions reached through a Mutual Agreement Procedure (‘MAP’).
• Multilateral APA: Set of agreements between competent authorities of more than two jurisdictions reached through a MAP.

Currently, a phased rollout has been adopted with only unilateral APAs introduced initially, with subsequent expansion to bilateral and multilateral agreements.

3. Eligibility Criteria

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 such as cases involving:

• Complex Business operations or Controlled Transactions
• Where such Controlled Transactions have been historically subject to audit.

Transactions that fall under Safe Harbour provisions, including low value adding intra-group services are excluded from the purview of APA. Cross border transactions as well as 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.

APA applications can be rejected under various circumstances – including limited scope of transactions and where ALP can be reliably applied; shifting the focus to applications for complex business arrangements for which tax certainty is required.

4. Threshold

A person can apply for an APA if it meets the materiality threshold of Controlled Transactions of AED 100 million per tax period. Only the value of transactions that are proposed to be included in the APA should be included. A person not meeting the threshold criteria may still apply for an APA, if they could provide robust justification on why an APA would help ensure compliance and certainty in such cases.

An application can be accepted even where the threshold is not met and can be rejected even if the threshold is met, emphasizing that the focus is on the nature and complexity of transactions and not merely the quantum.

5. Who can apply

A pre-filing consultation and APA application must be filed by a Person, its Tax Agent (registered for CT purposes with FTA) or Legal Representative on behalf of the Person. In case of a Tax group, only the Parent company of that tax group is permitted to submit the APA.

Applications and 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 to be announced).

6. APA Revision, Cancellation & Renewal

• Revision/ cancellation
  APA may be revised if there is any change in the law, business or economic conditions or exceptional circumstances. A Person must self-assess the need to revise an APA and intimate the FTA within 20 Business Days from such event. The FTA can also initiate revision at its discretion.
• Revocation/ cancellation
  FTA may revoke or cancel an APA in the following cases:
  • Material misrepresentation or wilful defaults
  • Failure to comply with material terms and conditions of APA
  • Breach of one or more critical assumptions

  Revocation shall take effect from the first tax period covered under APA. In case of cancellation, it will be prospective. For the years when the APA is not valid, the taxpayer will be subject to routine audit.

• Renewal
  A Person may opt for a renewal of an APA if there are no material changes in the Business operations and facts relating to the Controlled Transactions and the critical assumptions remain valid. APA renewal request will need to be filed at least 3 months before the expiry of the existing APA.

Stage 1
Pre- filing consultation

• Pre-filing request to be made to FTA in prescribed form
• Pre-filing meetings assess the possibility of entering into an APA
• One or more pre-filing meetings will be scheduled by FTA

Prefiling consultation to be completed within 6-9 months from request. Notification of outcome by FTA within 60 days of consultation meeting

Stage 2
APA application filing

• APA application to be filed in the prescribed form
• FTA and taxpayer shall agree a project plan outlining timelines for each stage of the APA process
• Review of APA application including request for additional information, conducting site visit and interviews*

File application within earlier of 2 months (other reference of 40 days )from the date of pre-filing approval, or 12 months prior to commencement of the first Tax Period to be covered

Stage 3
Evaluation & Negotiation

• FTA prepares a TP analysis addressing the manner and criteria for determination of ALP based on the information obtained
• Discussion of TP analysis
• If FTA and applicant are unable to reach mutually agreeable position, the application may be dropped.

Taxpayer’s feedback on FTA’s TP analysis to be provided within 30 Business Days from the date of receipt of such analysis

Stage 4
Conclusion & Implementation of APA

• Signing of APA agreement based on terms mutually agreed.
• Application may be withdrawn at any time before conclusion of the agreement.
• FTA shall not use any information and documents gathered during the APA process for audit purposes#

Conclusion of APA within best practice timelines prescribed by the OECD (i.e. within 24-30 months)

*All information requested by FTA should be submitted within 40 business days of request.

# In many jurisdictions, separate teams manage APA programmes and audit procedures. In this case, however, the FTA oversees both. A firewall provision has been established to ensure that APA-related information is not used for audit purposes.

UAPAs for cross border Controlled Transactions shall be exchanged with foreign tax administrations of the jurisdiction of ultimate parent entity, immediate parent entity and counterparty of Controlled Transactions in accordance with BEPS Action 5.

APA Monitoring & Review – Filing of Annual Declaration

Upon entering into an APA, a person is required to file an APA Annual Declaration for each tax period covered under the APA in the prescribed form. The declaration is to be filed within 90 business days

from the date of signing the APA or by the due date of filing each relevant tax return, whichever is later.

Reasons for Rejection of prefiling request / APA application

A pre-filing request / APA application may be rejected for the following reasons:

*Even if a pre-filing request is approved, an APA application can be rejected on the same conditions prescribed

Prescribed forms/ details

Appendix 1 of the guide: List of Potential Critical Assumptions

• Operational & Economic critical assumptions
• Legal critical assumptions
• Financials & Tax related critical assumptions
• Other assumptions

Appendix 2 of the guide: APA Pre-filing Form

Details of the person and business along with industry overview, tax period, particulars of controlled transaction, proposed critical assumptions etc.

Appendix 3 of the guide: APA Application Form

Details of the Person’s business, related parties, covered tax periods, controlled transactions, market and industry details, transfer pricing methodology for each controlled transaction, financial and operating information, historic transfer pricing background etc.

Appendix 4 of the guide: APA Annual Declaration Form

Declaration on complying with the terms and conditions of the APA

Way forward for taxpayers

Thorough planning and preparation are essential before submitting an APA application. Pre-filing consultations are mandatory, and APA applications can be filed only on approval of the pre-filing request, highlighting the importance of clear communication with the FTA from the outset. Pre-filing consultations take on particular importance, as they require taxpayers to address multiple aspects with the FTA and reduce the risk of rejection under the circumstances outlined in the guide.

Moreover, there is an emphasis on conduct and contract to be aligned as well as requirement for maintenance of comprehensive documentation supporting the APA applications including the assumptions made in forecasts.

Moving forward, taxpayers may consider the following steps:

• Confirm eligibility to apply for APA scheme for relevant Controlled Transactions
• Evaluate APA feasability considering nature, criticality & value of the related party transactions vis-à-vis time & cost involved in the process
• Determine strategy – transactions to be covered & optimum period to cover

APA feasibility study

• Evaluate existing TP Policies and align the same with commercial substance
• Maintain intercompany agreements reflecting the TP policy
• Align contract with actual conduct of parties

Streamlining of TP arrangements

• Determine whether threshold of AED 100 mn met* -after determining ALP of transactions
• Detailed functional and economic analysis to be conducted
• Preparation of pre-filing application based on agreed strategy

Preparation of APA application

*APA application can be accepted even where threshold < AED 100 mn, at FTA’s discretion

How VSTN can support

The APA programme represents a robust mechanism for dispute resolution, promoting tax certainty and unanimity in the approach relating to the controlled transactions. Taxpayers should assess the suitability of the APA option by weighing the nature, significance, and value of their transactions against the time and cost required for the process. Moreover, an APA requires a clear understanding of the underlying transaction economics, business context, and transfer pricing rationale to obtain a better outcome during negotiations with the FTA.

VSTN’s team brings extensive expertise in managing APA assignments, having successfully supported clients in concluding multiple APAs in other jurisdictions.

VSTN offers end-to-end support in APA process including:

• Feasibility Analysis considering the cost benefit analysis
• In-depth analysis of business and aligning the transfer pricing policy with the business model
• Providing strategic guidance in preparation and submission of pre-filing request
• Represent before FTA in pre-filing consultations
• Preparation and submission of APA applications and other information requested by FTA
• Negotiation with Tax Authorities and support during site interviews/meetings
• Post conclusion support – Filing of annual declaration and FTA review
• APA renewal support