The UAE R&D Tax Credit is a corporate tax incentive introduced by Cabinet Decision No. 215 of 2025. It allows eligible UAE companies to reduce their Corporate Tax liability by a percentage of their qualifying R&D expenditure incurred from 1 January 2026 onwards.

The scheme is administered by the Federal Tax Authority, with a mandatory technical pre-approval process managed by the Emirates R&D Council.

The scheme applies to Tax Periods commencing on or after 1 January 2026. For companies with a calendar-year tax period, the first eligible expenditure window is 1 January to 31 December 2026, with the claim submitted as part of the 2026 Corporate Tax Return.

No. The R&D Tax Credit is non-refundable. It is applied as a reduction against your Corporate Tax liability only. If the credit exceeds your tax liability in a given period, the unutilised portion is carried forward to subsequent years — it is not paid out in cash.

Yes. Unutilised credits may be carried forward to subsequent Tax Periods, provided the same person or persons have continuously held at least 50% of the company, or that the company continues to carry on the same business activity after any change in ownership.

Listed companies are exempt from these ownership continuity conditions.

To qualify, a company must be incorporated or established in the UAE — or operate through a UAE Permanent Establishment — and be subject to UAE Corporate Tax and/or Top-up Tax. It must also bear the financial cost of the R&D and be entitled to a share of the results.

Each R&D Project must receive mandatory pre-approval from the Emirates R&D Council before a claim can be filed.

Yes, but with a condition. Free Zone companies must either be subject to Corporate Tax at the standard 9% rate on income derived from their R&D Activities, or be subject to the Top-up Tax. Free Zone entities benefiting from a 0% rate on qualifying income are not eligible for the credit on that income.

Yes. Qualifying R&D Expenditure must reach at least AED 500,000 per R&D Project in each Tax Period. This threshold applies per project, not as a combined total. Expenditure funded by a government grant is excluded from this calculation.

The credit is tiered based on qualifying expenditure and average R&D headcount. Both conditions must be satisfied simultaneously to access each rate.

15% on the first AED 1 million (minimum 2 R&D staff), 35% on AED 1M to AED 2M (minimum 6 R&D staff), and 50% on AED 2M to AED 5M (minimum 14 R&D staff).

If either threshold is not met for a given tier, the rate defaults down to the highest tier for which both conditions are satisfied.

An activity qualifies if it meets all five OECD Frascati Manual criteria: Novel (aimed at new findings), Creative (involving original concepts), Uncertain (outcome not known in advance), Systematic (following a plan and budget), and Transferable (results can be applied elsewhere).

Activities in social sciences, humanities, and the arts are explicitly excluded. Only work performed within the UAE qualifies.

No. The credit rewards the undertaking of systematic work to resolve genuine technical uncertainty, not the outcome. A project that fails to achieve its technical objective may still qualify — and in some cases the failure itself serves as evidence of the genuine uncertainty the scheme requires.

Four categories qualify: Staff Costs (salaries and employment costs for R&D Staff based in the UAE, automatically uplifted by 30% for overheads), Consumable Costs (materials directly used and consumed during R&D), Subcontracting Fees (paid to UAE-based third parties performing R&D within the UAE), and Cost Contribution Arrangements (proportionate contributions to joint R&D cost-sharing agreements).

Equipment, buildings, and patent filing fees are not confirmed qualifying categories under the current regulations.

Yes, where the development addresses genuine technical uncertainty. Software built using established tools and known methodologies does not qualify. Where development involves resolving an underlying technical challenge — novel algorithms, new architectures, or problems with no known solution — those activities may meet the qualifying criteria.

Yes, pre-approval is a legal prerequisite. A company must obtain formal approval from the Emirates R&D Council for each R&D Project before that project can be included in a claim. Without this pre-approval, expenditure on the project is not eligible regardless of its technical merits.

The Council may also require periodic progress updates and technical documentation during the life of an approved project.

Technical documentation must be retained for seven years following the end of the Tax Period to which it relates. This covers written, visual, and electronic records of objectives, processes, methodologies, experiments, and findings — and must be made available to the Emirates R&D Council or the FTA upon request.

A claw-back is the recovery by the FTA of previously utilised R&D Tax Credits. It applies where a company is found not to have continuously met the qualifying conditions for a particular project. Any credit already utilised must be repaid, and any unutilised credit is forfeited.

Claw-backs also apply if a company ceases to be a taxable person, enters liquidation, or redomiciles outside the UAE within five years of last claiming the credit.

We operate exclusively on a contingent success fee basis. Our fee is a percentage of the R&D Tax Credit successfully identified and secured. If we assess your activities and determine that no qualifying expenditure exists, you are not invoiced. There is no retainer, no fixed fee, and no charge for the initial eligibility assessment.

Yes. Audit and query support is a standard component of our service, not an add-on. In the event of an FTA Request for Information or formal audit, we manage the entire process — preparing responses, defending technical narratives and financial methodologies, and providing direct representation where required.

We design our process to minimise internal burden. For most clients, the primary commitment is one or two structured technical interviews per project lead — typically 60 to 90 minutes each — plus review and sign-off on the technical narratives we draft. All financial analysis, cost apportionment, pre-approval submission, and claim preparation are handled by our team.