The FTA has issued a new Corporate Tax Guide on Advance Pricing Agreements (APA) No. CTGAPA1, describing the procedural framework for obtaining and maintaining APAs under the UAE Corporate Tax regime. As flagged in the Guide itself, it is guidance (not legally binding) and does not modify the requirements of legislation.
A general overview of the new Guide is provided in our alert here. In this article, we look beyond to figure out:
- how the APA controls introduced by the Guide interact with the UAE Tax Procedures Law and its Executive Regulation, and
- what this means for dispute resolution when the FTA rejects, revokes, or cancels an APA (or declines to proceed at earlier stages).
The Guide’s “control layer”: monitoring, revision, cancellation and revocation
1. Annual monitoring via the APA Annual Declaration (and a built-in review process)
1.1. The Guide establishes an “APA monitoring and review” layer built around the APA Annual Declaration, which must be filed for each Tax Period covered under the APA and should cover all relevant APA terms and conditions. The filing deadline is notably tight: it is “within 90 Business Days from the signing date or by the Tax Return filing due date (whichever is later)”. Accordingly, the APA Annual Declaration deadline is shorter than the statutory Corporate Tax Return filing deadline under Article 53 (nine months following the end of the Tax Period).”
1.2. The FTA “may review” the APA Annual Declaration to assess adherence, focusing in particular on (among other points) whether material representations remain valid, the agreed method has been applied correctly, calculations are correct in all material respects, and critical assumptions remain valid.
This is important because Sec. 5.3 of the Guide expressly frames the review outcomes as potentially leading to: no change, revision (subject to mutual agreement), cancellation (if matters cannot be resolved), or revocation (if Sec. 5.5 conditions are observed).
2. Revision triggers and the meaning of the “event”
2.1. The Guide allows the FTA to revise an APA when there is a change in law, change in business (economic, other relevant conditions), or other exceptional circumstances notified by the Person. The Person must notify the FTA of the need to revise within 20 Business Days from occurrence of such event, which anchors “the event” to the revision-triggering change itself.
2.2. If revision is not feasible, or feasible but not mutually agreed, the Guide states that “the APA may be cancelled prospectively from the Tax Period in which the event occurred, while remaining effective for prior Tax Periods covered under the APA”.
In that sentence, “the event” is the change in circumstances that triggered the revision discussion, i.e. any of the revision-triggering circumstances listed immediately above: (i) a change in law affecting UAE Corporate Tax treatment of the covered Controlled Transactions, (ii) a change in business/economic/other relevant conditions (example given: entry/exit of Resident Persons from a Tax Group), and/or (iii) other exceptional circumstances notified by the Person. So, where revision is not feasible or the parties cannot reach mutual agreement on the revision, the Guide links the prospective cancellation to the Tax Period in which that revision-triggering change occurred.
3. Revocation vs cancellation: different legal effects in time
The Guide distinguishes “revocation” from “cancellation” in a way that matters procedurally:
- “Revocation” applies where the Person made a material misrepresentation, failed to comply with material terms, or breached critical assumptions. If revoked, the APA takes effect “from the first Tax Period covered”, i.e., retrospective effect across the covered period.
- “Cancellation” is prospective. In the breach (non-compliance) context, it is cancelled from the Tax Period in which the breach or non-compliance occurred and for all subsequent Tax Periods (Sec. 5.4). In the “revision not agreed” context, it is cancelled from the Tax Period in which the revision-triggering event occurred (Sec. 5.5).
Finally, the Guide expressly signals the consequence of revocation: once revocation becomes effective, “the Controlled Transactions previously governed by the APA shall be subject to the provisions set forth in the Corporate Tax Law and Tax Procedures Law”. Practically, a similar consequence is implied for cancellation, because the APA stops applying from the relevant point onward.
4. Where the Guide ends
4.1. A recurring practical question is whether the Guide’s review, cancellation and revocation architecture creates a self-contained enforcement track.
4.2. It does not. The Guide introduces an APA “review” of annual declarations, but it does not itself impose a complete “tax assessment machinery” to give coercive effect to APA outcomes. That matters because the moment an APA is cancelled or revoked (or its scope is effectively neutralized), the FTA is back in the familiar world: to crystallise additional Corporate Tax liability, it must eventually rely on the ordinary Tax Procedures Law instruments (audit and subsequent issuance of assessment and related procedures).
4.3. This re-routes the discussion to time limits and procedural constraints in the Tax Procedures Law. In particular, the Tax Procedures Law sets a statute of limitation for conducting a Tax Audit or issuing a Tax Assessment after five years from the end of the relevant Tax Period, subject to specific extensions and a longer 15-year period in tax evasion cases.
4.4. This becomes especially sensitive where the Guide contemplates outcomes that can reach back in time (revocation) or reach back to the period in which a revision-triggering change occurred (cancellation from that Tax Period). The FTA’s substantive position may be clear, but the procedural ability to translate it into assessments is still constrained by the Tax Procedures Law’s limitation framework.
Dispute resolution: there is no “APA-specific appeal track” - general remedies apply
5. What the Tax Procedures Law offers
The Tax Procedures Law provides a structured ladder of remedies:
1) Tax Assessment Review Request: a Person may request the Authority to review a Tax Assessment (and related penalties) within 40 Business Days of notification.[1]
2) Reconsideration Request: a Person may request reconsideration of any “decision” issued by the Authority in connection with the Person, within 40 Business Days of notification.[2]
3) Tax Disputes Resolution Committee (TDRC): the Committee has jurisdiction over objections regarding the Authority’s decisions on reconsideration requests (and also where the Authority does not decide on reconsideration in time).[3]
4) Court stage: appeals against Committee decisions follow the court procedures set out in the Law, including the 40 Business Day appeal window.[4]
Deadlines can be extended under the Executive Regulation’s mechanism (e.g. extension of the Authority’s decision deadline and acceptance periods in certain cases).[5]
6. What the Guide does not offer
6.1. The APA Guide describes key “gateway” and “control” points where the FTA can decline to proceed:
- The pre-filing consultation request may be rejected (the Guide lists examples such as absence of information or low complexity, among others).
- Even after pre-filing approval, the APA application may still be rejected (the Guide states the pre-filing stage does not guarantee acceptance).
6.2. But the Guide does not establish any special dispute resolution track for:
- alleged unlawful rejection of a pre-filing request,
- rejection of an APA application,
- revocation or cancellation decisions, or
- disputes about the legality of the “review” process itself.
6.3. Accordingly, taxpayers must fall back on the Tax Procedures Law’s general mechanisms. However, those mechanisms are most effective when there is a clearly identifiable “decision” or a “Tax Assessment” to challenge.
7. The practical weakness: avoiding a formal “decision” can undermine the remedy ladder
7.1. A key procedural tension is that the reconsideration mechanism is framed around a “decision” issued by the Authority. If, in practice, the FTA communicates an APA rejection (revocation or cancellation) in a way that is not treated as a formal “decision” instrument (for example, a non-decision notice, an informal message, or an internal system status without a decision letter), this can weaken the taxpayer’s ability to trigger reconsideration and then escalate to the TDRC, because the ladder is designed around decisions and subsequent reconsideration outcomes.
7.2. This is not merely academic. The Committee’s jurisdiction is explicitly linked to objections regarding decisions on reconsideration (or non-issuance of a decision on reconsideration).
8. Even if a taxpayer doesn’t challenge cancellation (revocation) immediately, it can still challenge the assessment, and argue the APA remains effective.
8.1. A common practical question is whether a taxpayer must immediately litigate the APA cancellation (revocation) to preserve their position. The Tax Procedures Law structure suggests an important safety valve: A taxpayer has an independent statutory right to challenge a Tax Assessment by submitting a Tax Assessment Review Request within 40 Business Days from notification.
8.2. So, even if the taxpayer does not initiate reconsideration procedures in respect of an APA-related communication at an earlier stage (especially where no formal “decision” exists), this does not, in principle, remove the taxpayer’s ability to challenge the next procedural step (a Tax Assessment) once the FTA attempts to operationalize the APA cancellation/revocation through assessments.
8.3. Crucially, in the course of disputing the assessment (and then any reconsideration/TDRC/court stages), the taxpayer should remain free to argue that:
1) the purported cancellation/revocation was unlawful (procedurally or substantively), and
2) therefore the APA should continue to bind the FTA for the relevant covered periods (subject, of course, to the APA’s own conditions and the facts).
8.4. That argument becomes even more central in “revocation” cases, where the Guide contemplates retroactive effect from the first covered Tax Period, but the FTA’s ability to issue assessments may still run into the Tax Procedures Law’s statutory limitation framework.
[1] Tax Procedures Law, Article 28.
[2] Ibid, Articles 29.
[3] Ibid, Articles 30-35.
[4] Ibid, Article 36.
[5] Ibid, Article 35.
Closing thoughts
9. The 2026 APA Guide strengthens the UAE’s Corporate Tax certainty toolkit, but it also highlights an institutional reality:
1) APAs sit on top of the Tax Procedures Law rather than replacing it.
2) Where the Guide is silent (especially on dispute mechanics), taxpayers and the FTA revert to the general law (tax audit and issuance of tax assessment limits, review, reconsideration, TDRC, courts), and the effectiveness of those remedies can turn on something as basic as whether the FTA action is crystallized in a formally challengeable “decision”.
Disclaimer
Pursuant to the MoF’s press-release issued on 19 May 2023 “a number of posts circulating on social media and other platforms that are issued by private parties, contain inaccurate and unreliable interpretations and analyses of Corporate Tax”.
The Ministry issued a reminder that official sources of information on Federal Taxes in the UAE are the MoF and FTA only. Therefore, analyses that are not based on official publications by the MoF and FTA, or have not been commissioned by them, are unreliable and may contain misleading interpretations of the law. See the full press release here.
You should factor this in when dealing with this article as well. It is not commissioned by the MoF or FTA. The interpretation, conclusions, proposals, surmises, guesswork, etc., it comprises have the status of the author’s opinion only. Furthermore, it is not legal or tax advice. Like any human job, it may contain inaccuracies and mistakes that I have tried my best to avoid. If you find any inaccuracies or errors, please let me know so that I can make corrections.
