Highlights of the UAE advance pricing agreement guide

An advance pricing agreement (APA) is a formal agreement between a taxpayer and the tax authority that determines the approach for setting arm’s length prices for transactions with related parties (including transactions with Connected Persons), providing certainty on complex matters and avoiding potential litigation disputes. The OECD Transfer Pricing (TP) Guidelines endorse APAs as a best practice to ensure compliance and foster cooperation between taxpayers and tax authorities.

The UAE Federal Tax Authority (FTA) is continuing to enhance and strengthen its tax framework. In addition to the existing guidance on complying with TP regulations, the release of the APA guide (hereinafter referred to as “guide”) marks a significant milestone for businesses operating in the UAE, offering a structured mechanism to achieve certainty on TP positions in a jurisdiction that is still evolving its tax landscape.

This development is particularly important for multinational enterprises and large domestic groups seeking to mitigate tax risk and avoid potential litigation disputes. By enabling taxpayers to agree on an arm’s length pricing methodology prospectively, APAs can provide certainty on the TP methodology for a set tax period and reduce the likelihood of double taxation. The APA program reflects the UAE’s commitment to align with the best international practices in line with similar implementation undertaken by OECD member countries.

The APA regime has been introduced in a phased approach, starting with unilateral APAs covering domestic transactions (the date for coverage of cross border transactions is expected to be released soon) and expanding to bilateral and multilateral agreements in the future. As the UAE tax landscape evolves, APAs offer an opportunity to embed predictability into tax planning, reduce the administrative burden on business, and strengthen
governance frameworks.

In this tax alert, we outline the key features of the UAE APA program, eligibility criteria, timelines and compliance obligations, and share our insights on how businesses can take advantage of this opportunity to enhance certainty and manage TP risks effectively. 

Click here to read the full APA guide issued by the FTA.¹

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Article 59 of the UAE Corporate Tax (CT) Law provides a framework for taxpayers to apply for an APA in the UAE. The FTA issued the APA guide on 31 December 2025, which outlines objectives, scope, procedures, timelines and prescribed forms.

An APA is an agreement by the FTA with a taxpayer, which sets the criteria to determine the arm’s length price in relation to its transactions with Related Parties or Connected Persons (RPTs) entered or to be entered by that taxpayer, over a fixed period of time. The key benefits of entering into an APA include offering TP certainty, reducing TP disputes and double
taxation risks etc.

Below are the types of APAs:

• Unilateral APA (UAPA) - Agreement between a taxpayer and the FTA for domestic and cross-border RPTs.
• Bilateral APA (BAPA) - Agreement between competent authorities of two jurisdictions i.e. UAE and relevant foreign tax jurisdiction covering cross-border RPTs.
• Multilateral APA (MAPA) - Set of agreements undertaken between more than two tax jurisdictions covering cross-border RPTs.

The FTA is rolling out its APA program in phases, starting with UAPAs for domestic transactions from December 2025.

Cross-border UAPAs will follow in 2026, with plans to expand to BAPA and MAPA over time.