An advance pricing agreement that UAE businesses can rely on starts with one step: the pre-filing consultation. This is where the Federal Tax Authority (FTA) decides whether your case is suitable for an APA at all. Applications that are weak, incomplete, or poorly timed can be turned away before a formal application is filed.
The FTA published its Corporate Tax Guide on Advance Pricing Agreements (CTGAPA1) in December 2025. It sets out how the programme works. This guide explains what the FTA looks for at pre-filing and how to prepare, so you can enter the process with a defensible transfer pricing position.
What Is an Advance Pricing Agreement in the UAE?
An APA is an agreement between the FTA and a taxpayer. It sets the criteria for determining the arm’s length price of specified related-party transactions over a fixed period. The legal basis is Article 59 of the Corporate Tax Law, and Article 34 requires related-party transactions to meet the arm’s length standard.
The 8 Grounds on Which the FTA May Reject Your Pre-Filing Request
The FTA may reject where:
- The proposed transactions suggest a tax avoidance strategy
- The scenario is superficial or not fully thought through
- An APA looks inefficient to pursue because of limited scope
- The arm’s length principle can be applied reliably beyond significant doubt
- Significant restructuring is forecast during the covered periods
- Your business is unpredictable or undergoing significant fluctuation
- You include or exclude certain transactions without a satisfactory rationale
- Historical records are insufficient for reliable projections, or there are discrepancies in method selection or benchmarking
How to Improve Your APA Approval Chances: A Practical Checklist
1. Make sure there is a genuine transfer pricing uncertainty
An APA suits cases where reasonable people could disagree about the arm’s length price. If your pricing is straightforward, the FTA may view an APA as unnecessary. Document clearly why the uncertainty exists and why certainty would benefit both sides.
2. Present a stable, predictable business
The FTA is less likely to proceed if forecasts are unreliable. Before filing, check that:
- No major restructuring is planned within the proposed APA period
- Revenue and margins are reasonably predictable
- Your business model and related-party arrangements are settled
3. Get your transfer pricing documentation in order
Weak records are a common reason for rejection. Prepare:
- Inter-company agreements for every proposed transaction
- A detailed functional, asset and risk analysis
- Historical transfer pricing policies for the prior two financial years, where applicable
- Standalone and group financial statements, audited where available
- A Master File and Local File, if you have them
4. Align contracts with actual conduct
The guide identifies significant discrepancies between legal contracts and the actual conduct of the business as a ground for rejecting an application. Review whether your agreements reflect how the parties really operate, and fix any gaps before approaching the FTA.
5. Justify your scope with a clear rationale
Decide which transactions to include and which to leave out, and be ready to explain both choices. An unexplained inclusion or exclusion is itself a rejection ground.
6. Propose a defensible method and benchmarking approach
Even at pre-filing, the FTA evaluates the suitability of your proposed methodology. Prepare:
- A reasoned selection of the most appropriate transfer pricing method under Article 34 of the Corporate Tax Law
- A high-level economic analysis of the proposed arm’s length price
- A benchmarking approach with a clear accept-reject logic for comparables
7. Identify realistic critical assumptions
Critical assumptions are conditions on which the APA depends, such as stable functions, risks, shareholding ratios, accounting policies and market conditions. A breach can lead to revision, cancellation or revocation. Propose assumptions you can genuinely maintain, because you must notify the FTA of any modification or breach within 20 Business Days.
8. Be transparent about prior foreign APAs and disputes
The pre-filing form asks about litigation history, appeals and APAs in other jurisdictions. Disclose these fully. Incorrect, incomplete or misleading information can lead to rejection later, and in serious cases to revocation.
9. Respond to FTA requests on time
Every information request carries a 40 Business Day expectation. Slow or partial responses can undermine the application, so assign a responsible owner and a response protocol before you file.
10. Use an experienced, FTA-registered Tax Agent
A registered Tax Agent can file on your behalf and manage communication with the FTA. A specialist transfer pricing adviser also helps you stress-test your case before the FTA does.
Frequently Asked Questions
What is the minimum value for an APA in the UAE?
The UAE APA guide uses AED 100 millions of controlled transactions per Tax Period as an indicator. It is not an absolute requirement, and the FTA may accept or reject cases on either side of it.
Can I apply for an APA for cross-border transactions?
The UAPAs can cover cross-border transactions, but the FTA said it would announce the start date for cross-border applications separately. Check the FTA’s latest announcements before planning.
Is a pre-filing consultation mandatory?
Yes, for a new application. A renewal does not require a pre-filing consultation, so the lower fee applies.
Get Expert Help With Your APA Pre-Filing
A rejected pre-filing request costs time and can weaken your negotiating position. Tax Gian’s transfer pricing specialists can help you assess APA eligibility, prepare your documentation and benchmarking, and present a strong case to the FTA.
Contact Tax Gian today to book a transfer pricing consultation and find out whether an APA is right for your business.
