With the introduction of UAE Corporate Tax and OECD-aligned Transfer Pricing rules, Advance Pricing Agreements (APAs) have emerged as a strategic certainty tool, not a routine compliance requirement. An APA allows a business to agree in advance with the Federal Tax Authority (FTA) on the transfer pricing methodology to be applied to specified related-party transactions, thereby reducing uncertainty and future audit risk.
The UAE has adopted a phased and deliberate approach to implementing APAs. While the Corporate Tax Law permits APAs in principle, the Federal Tax Authority has chosen to roll them out gradually, starting with unilateral APAs.
From the fourth quarter of 2025, businesses will be able to apply for unilateral APAs, i.e. agreements between the taxpayer and the UAE FTA alone. These provide certainty only for UAE tax purposes and do not bind foreign tax authorities.
Applications for bilateral and multilateral APAs, which involve one or more foreign tax authorities under tax treaty mechanisms, will be accepted only once the FTA announces a separate start date.
This sequencing reflects administrative practicality. Unilateral APAs can be handled fully within the UAE tax system, whereas bilateral and multilateral APAs require treaty coordination, exchange of information, and mature mutual agreement procedures. The UAE has consciously chosen to build capability and precedent before expanding into cross-border APA frameworks.
In line with international practice, unilateral APAs are most relevant for material and recurring related-party transactions, such as:
APAs are not a substitute for transfer pricing documentation, nor are they intended for aggressive or high-risk tax positions. They are designed to bring predictability where the business model is stable, and the economic outcomes are expected to remain consistent over time.
A key consideration often underestimated is cost. APAs are not low-cost filings. They involve:
With the APA fee structure now clearly defined, businesses can better forecast expenditure and allocate resources. However, APAs make sense only where the value of certainty and audit risk mitigation outweighs the financial and administrative cost of obtaining them.
While the eligibility and timing for unilateral APAs are now clear, the detailed procedures, documentation requirements, timelines, and review mechanics are still awaited. These will be critical in assessing the practical feasibility of APA applications once the regime becomes operational.
Until such procedural clarity is issued, unilateral APAs should be viewed as a measured strategic option, not an automatic compliance step, best suited for businesses with significant related-party exposure and a long-term UAE presence.
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Federal Decree-Law No. 47 of 2022 on Taxation of Corporations and Businesses
1. A Person may make an application to the Authority for a clarification regarding the application of this Decree-Law or the conclusion of an advance pricing agreement with respect to a transaction or an arrangement proposed or entered into by the Person.
2. The application under Clause 1 of this Article shall be made in the form and manner prescribed by the Authority.
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Federal Tax Authority Decision No. 4 of 2024 – Issued 12 June 2024 – (Effective 1 July 2024)
Amending the Authority’s Policy on Issuing Clarifications and Directives
This policy outlines the general framework for procedures of clarifications and directives, while the processes and details shall be specified by the Authority.
IV. Directives:
Based on the Corporate Tax Law, a person may make an application to the Authority in relation to the conclusion of an advance pricing agreement with respect to a transaction or an arrangement proposed or entered into by the person.
The start date for receiving applications for advance pricing agreements and procedures related to the submission of applications and the issuance of agreements will be announced in the fourth quarter of 2024.
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Federal Tax Authority Decision No. 2 of 2025 – Issued 19 February 2025 – (Effective 1 March 2025)
Amending Federal Tax Authority Decision No. 4 of 2024 – Issued 12 June 2024 – (Effective 1 July 2024) on The Authority’s Policy on Issuing Clarifications and Directives
IV. Directives:
Based on the Corporate Tax Law, a person may make an application to the Authority in relation to the conclusion of an advance pricing agreement with respect to a transaction or an arrangement proposed or entered into by the person.
Applications for unilateral advance pricing agreements shall be received from the 4th quarter of 2025. The date of receiving any other advance pricing agreement applications shall be announced after that date.
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Table of Fees for the Services Provided by the Federal Tax Authority
Appendix to the Cabinet Decision No. 65 of 2020, and its Amendments, latest one being Cabinet Decision No. 174 of 2025 – Issued 18 November 2025 (Effective 1 January 2026)
| No. | Service description | Fee (in AED) |
|---|---|---|
| 16 | Request for concluding a unilateral advance pricing agreement for the first time.7 | 30,000 for each application. |
| 17 | Request for renewal or amendment to a unilateral advance pricing agreement.8 | 15,000 for each application. |
With over 25 years in Dubai and nearly 30 years as a Chartered and Management Accountant, Hemant has extensive experience across manufacturing, services and technology sectors. He has worked with major corporate groups including Al Tayer, Saif Al Ghurair, Dhabi, and Aditya Birla. Hemant specializes in profitability and cost management, debt restructuring, contract management, and regulatory compliance, having generated approximately USD 47.5 million in savings and profit growth. A confident public speaker and Distinguished Communicator, he lives by the quote: “You get what you reward for. If you want ants to come, you put sugar on the floor” (Charlie Munger), embodying his belief that “Profit has its own intelligence.”
Archana Mundhra is a qualified Chartered Accountant with over 15 years of experience in multinational corporations. Her proficiency lies in financial planning and business intelligence. Her deep financial understanding and profound analytical skills empower her to assist management in realizing their objectives effectively.
Rinkle Jain is a qualified Chartered Accountant and Fellow Member of the Institute of Chartered Accountant of India. A results-driven Chartered Accountant with a distinguished career marked by proficiency in management, financial planning, and catalyzing overall company development.Demonstrates a unique blend of financial acumen, strategic insight, and leadership prowess, contributing significantly to organizational success.
