The Federal Tax Authority of the United Arab Emirates (FTA) has issued Cabinet Decision No. 2 of 2025, introducing updates to the Policy on Clarifications and Directives. The Decision has been effective since 1 March 2025 and regulates the issuance of public and private tax clarifications, individual tax exemptions, as well as the framework for concluding Advance Pricing Agreements (APAs).
Under the revised policy, the FTA has officially announced the launch of applications for unilateral APAs, scheduled to begin in the fourth quarter of 2025. At the same time, all existing transfer pricing documentation requirements remain fully in force. The introduction of the APA regime does not relieve taxpayers from their documentation obligations: companies are still required to prepare and maintain a Master File and Local File, where applicable.
Section 6.6.1.1 of the guidance clarifies that the Master File must include information on the group structure, business model, value chain, intangible assets, intragroup financing arrangements, and financial performance. In addition, the Master File must disclose details of existing and concluded APAs, as well as other tax agreements that affect the allocation of income between jurisdictions.
In summary, the introduction of the APA framework in the UAE does not replace transfer pricing documentation requirements, but rather complements them by providing a preventive mechanism for agreeing transfer pricing arrangements with the tax authorities in advance.
