The UAE Federal Tax Authority (FTA) has issued Decision No. 2 of 2026, effective 1 March 2026, which introduces a revised version of the policy on issuing clarifications and directives (originally established by FTA Decision No. 5 of 2021). The most significant additions are a detailed Advance Pricing Agreement (APA) framework and a new category of binding directives on tax transactions.
In particular, the Decision introduces:
- A comprehensive APA framework: detailed rules for unilateral APAs for domestic related-party transactions, regulating threshold values for entering into agreements, the mandatory pre-filing consultation procedure, timelines, annual declaration filing, and agreement revocation procedures;
- A new category of binding directives on tax transactions: FTA decisions establishing the rules for the application of tax legislation to specific types of transactions, which, unlike public clarifications, are binding on both the FTA and taxpayers;
- A formal distinction between general administrative exceptions (issued by the FTA on its own initiative for all taxpayers) and private administrative exceptions (issued upon request of a specific taxpayer).
We examine all the details in the alert prepared by our team.
Full analysis is available in the links below:
