On 30 December 2025, the UAE Federal Tax Authority (FTA) published its first Corporate Tax Guide on Advance Pricing Agreements, formally referenced as CTGAPA1. For businesses involved in related-party or connected person transactions, this guide marks a pivotal development in the UAE’s Corporate Tax framework. It operationalises Article 59 of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, giving taxpayers a structured and transparent mechanism to achieve certainty on transfer pricing positions before disputes arise.
The central question for most businesses is straightforward: am I eligible? This guide provides a thorough and accurate answer, drawn directly from the framework set out in CTGAPA1.
What Is an Advance Pricing Agreement?
According to CTGAPA1, an APA is an agreement by the Authority with a Person, which sets the criteria to determine the Arm’s Length Price in relation to Controlled Transactions entered or to be entered by that Person with its Related Party or Parties, over a fixed period of time. It covers the specific Controlled Transactions included, the tax periods to be covered, the agreed transfer pricing criteria, the critical assumptions, and the documentation and implementation mechanisms.
APAs are voluntary in nature. The programme encourages taxpayers to apply where there is significant complexity or uncertainty in determining an arm’s length outcome, where the business model is intricate, or where transactions have historically been subject to FTA audit activity.
It is important to note that CTGAPA1 itself is procedural guidance and is not legally binding. The APA, once concluded and signed by both the FTA and the taxpayer, is what carries binding effect, and only within the scope of UAE Corporate Tax Law.
Who Is Eligible to Apply?
Any Natural or Juridical Person With Controlled Transactions Reaching the Materiality Threshold
A natural person or a juridical person who has proposed or entered into a domestic and/or cross-border Controlled Transaction is eligible to enter into an APA under the programme, provided the total or expected value of all the Controlled Transactions proposed to be covered under the APA is at least AED 100 million per tax period.
For a UAE Tax Group, this threshold applies at the level of the Tax Group, not at the level of each individual member entity.
The AED 100 million figure is an indicator of materiality rather than an absolute admission threshold. The FTA retains discretion to accept or reject applications based on the specific facts and circumstances of each case, including the complexity of the transactions, the level of tax risk involved, and the overall benefit of entering into an APA. Meeting the threshold does not guarantee acceptance.
Businesses With Complex or High-Risk Transactions
CTGAPA1 makes clear that an APA may only be concluded in respect of transactions where there is significant complexity or uncertainty in applying the arm’s length principle. The programme is therefore particularly relevant for businesses where standard transfer pricing documentation does not adequately resolve pricing uncertainty, for example, where the business model involves proprietary intellectual property, bespoke financing structures, unique manufacturing arrangements, or services that are difficult to benchmark against comparable independent transactions.
Equally, if your Controlled Transactions have historically been subject to FTA audit activity, or where the pricing methodology applied has been challenged or queried, the APA programme provides a structured path to establishing certainty going forward.
Entities Subject to Different Tax Rates or Tax Incentives Under the Corporate Tax Law
For the current phase, which covers domestic Controlled Transactions only, CTGAPA1 specifies that a domestic Controlled Transaction is eligible for a UAPA where the Person and its domestic Related Party are subject to different tax rates, or where one or both parties are eligible for any tax incentives under the UAE Corporate Tax Law.
In practice, this is particularly significant for businesses that have related-party transactions between UAE mainland entities and entities registered in a UAE Free Zone that qualify as a Qualifying Free Zone Person (QFZP). Mainland entities are subject to the standard 9% Corporate Tax rate, whilst QFZPs may be eligible for the 0% Qualifying Income rate. Any related-party transaction between these two types of entities involves different tax rate exposures, making it eligible for a domestic UAPA under the current phase of the programme.
What Is Excluded From the APA Programme?
Not all transactions or entities can access the APA programme. CTGAPA1 explicitly excludes Controlled Transactions that fall within the scope of safe harbour rules, including low value-adding intra-group services. These transactions are not eligible for coverage under an APA and are also excluded from the AED 100 million materiality threshold calculation.
Additionally, any application that involves incomplete, unreliable, or misleading economic analysis, discrepancies or changes in the factual basis presented, or where the FTA determines that the application does not meet its materiality or complexity criteria, may be rejected, whether at the pre-filing stage or subsequently during evaluation.
How Long Does an APA Cover?
An APA must cover a minimum of three tax periods and a maximum of five tax periods. At the current stage of the programme, APAs cover only prospective periods. There is no rollback provision available to cover prior tax years. This means that transfer pricing positions for tax periods that have already commenced cannot be protected retrospectively through an APA under the existing framework.
Why Eligible Businesses Should Act Now
Given that the pre-filing consultation alone may take six to nine months, and that the APA application must be submitted at least twelve months before the first covered tax period begins, businesses that wish to have an APA in place for 2028 need to initiate the pre-filing process in 2026. The window is open now, and early engagement with the FTA through a properly prepared pre-filing request will significantly improve the prospects of a successful application.
How Tax Gian Can Support Your APA Application
An APA application is not a standard compliance exercise. It requires a detailed and well-evidenced transfer pricing position, careful assessment of eligibility, selection of an appropriate methodology, rigorous economic analysis, and structured engagement with the FTA across multiple stages over an extended period. Any gaps in the analysis or inconsistencies in the factual basis presented can result in rejection at pre-filing or during evaluation, with the non-refundable fee already paid.
At Tax Gian, our team of registered tax agents and transfer pricing specialists works with businesses to assess their eligibility under CTGAPA1, structure a compelling pre-filing consultation request, prepare the full APA application, and represent them throughout the FTA process. With more than 25 years of experience across UAE and international tax, we are positioned to guide your business through this process with precision.
If your business conducts domestic Controlled Transactions at or near the AED 100 million threshold and you want to lock in certainty on your transfer pricing positions, contact Tax Gian today to begin your eligibility assessment.
