UAE R&D Tax Credit
The UAE R&D Tax Credit is a Corporate Tax measure designed to support qualifying research and development carried out in the UAE. It allows Qualifying Entities to claim a tax credit against Corporate Tax Payable in relation to Qualifying R&D Expenditure, subject to the official conditions and utilisation rules.
Note: The credit is not a cash grant or a refund scheme. Pre-Approval does not guarantee the final credit outcome.
Key Programme Information
The UAE R&D Tax Credit applies to Tax Periods commencing on or after 1 January 2026.
A minimum of AED 500,000 in Qualifying R&D Expenditure applies per R&D Project per Tax Period.
Tiered rates of up to 50% apply, based on both the level of Qualifying R&D Expenditure and the number of R&D staff, subject to all official requirements.
OVERVIEW
How the Programme Works
ERDC is the competent authority for the R&D Pre-Approval stage. It assesses Qualifying R&D Activities and estimated Qualifying R&D Expenditure, issues Pre-Approval outcomes and reviews the later confirmation of actual expenditure through TAWWER.
The Federal Tax Authority receives and administers the final claim through the Corporate Tax Return in EmaraTax. The Ministry of Finance is responsible for Corporate Tax policy and legislation. ERDC does not grant, calculate or guarantee the final tax credit.
Eligibility
Who May Apply
A Qualifying Entity must be a Taxable Person under the Corporate Tax Law conducting Qualifying R&D Activities in the UAE. For Tax Groups, the Parent Company applies on behalf of the group.
Note: Eligibility is activity-based, not sector-based.
Qualifying Activities
What Counts as R&D
Note: Qualifying R&D Activities must be conducted in the UAE. Social sciences, humanities and the arts are excluded. The assessment is based on the five criteria below.
Transferable and/or Reproducible
Produces results that can be documented, transferred and reproduced.
Novel
Aimed at new findings by creating new knowledge or new applications, rather than routine work or applying what is already established.
Creative
Based on original, non-obvious concepts and hypotheses formulated to solve the problem.
Qualifying Expenditure
What Counts as Qualifying R&D Expenditure
Note: Grant-funded or reimbursed expenditure does not qualify. Intra-group recharges are not Qualifying R&D Expenditure for Tax Groups, and expenditure outside the four categories below does not qualify. Refer to the official Guidebook for detailed mechanics.
Staff Costs
Costs for staff directly engaged in the R&D activity, including training, subject to the official rules. Employee stock option plans are excluded.
Consumable Costs
Materials and supplies consumed in the R&D activity.
Subcontracting Fees
R&D work subcontracted to another party, subject to the official conditions.
Cost Contribution Arrangements
The Qualifying Entity’s arm’s-length share of collaborative R&D arrangements.
Applicant Journey
One Journey. Three Phases. Two Authorities.
Pre-Approval · ERDC / TAWWER: Before or during the R&D work, the Qualifying Entity applies through TAWWER. ERDC reviews the project and estimated Qualifying R&D Expenditure and issues the outcome.
