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How to Claim the UAE R&D Tax Credit

Already confirmed you qualify? This is what happens next: five steps, four parties, and around twenty months from first documented project to filed return. Tiered rates of 15%, 35% and 50% deliver a maximum credit of AED 2 million per tax period.

The claim, end to end

1

Q1 2026

Eligibility

Confirm the four gates before spending time on documentation

YOU + RD VAULT

2

ALL 2026

Documentation

Build the 3 part dossier as the work happens, not afterwards

YOU + RD VAULT

3

When the portal opens

Pre-approval

Apply per project , without approval there is no claim

erdc decides

4

Q1 2027

Calculate

Apply the uplift, then the marginal band rates.

RD VAULT

5

By 30 Sep 2027

File

Submit inside the corporate tax returns

fta receives

Watch instead · 7 min

The whole claim, walked through

Our R&D tax team takes you through the five steps, the documentation you need, and the worked calculation. Watch it end to end, or jump to the step you’re on.

Subtitles: English & Arabic

No sign-up required

Prefer a live session? See webinars

chapters

000

Step 1 . Confirming Eligibility

0:48

Step 2 . The three-part dossier

2:14

The 2-6-14 staffing rule

3:20

Step 3 . Council Pre-approval

4:26

Step 4 . A worked calculation

5:41

Filing with the FTA

6:29

Five mistakes that cost claims

Step 1

Confirm Your Eligibility

Four gates, all of which must be satisfied before documentation is worth starting.

01

Entity

A UAE juridical person or a foreign entity with a UAE PE. Small Business Relief electors are excluded.

CD 215, Arts. 1 & 4

02

Activity

Novel, creative, uncertain, systematic and transferable, assessed against the OECD Frascati Manual.

MD 24, Art. 3(1)–(2)

03

AED 500,000

Minimum per project per period, tested on base spend before the 30% uplift is applied.

CD 215, Art. 5(3)(b)

04

In the UAE

Work must be carried out in the UAE. Subcontracting qualifies if UAE-based, with no chain subcontracting.

MD 24, Arts. 3(3) & 10(1)

Full eligibility breakdown, gate by gate →

step 2

Document your R&D

This is where claims are won or lost. You need one dossier per project, in three parts, built while the work happens.

PART 1

Technical

Why the work is R&D.

The scientific or technological uncertainty being resolved

The hypothesis or original concept behind it

Evidence the outcome was unknown at the outset

A project plan with milestones, timeline and budget

How findings can be transferred or reproduced

PART 2

Financial

What it cost, and why that cost qualifies.

Spend split by category: staff, consumables, subcontracting, CCA contributions, capitalised intangibles

Each cost item linked to a specific project

Payroll records with time allocation for split-role staff

Invoices, contracts and POs for third-party costs

Capitalised R&D included — the credit is not lost because costs sit on the balance sheet

CD 215, Art. 5(1) & 5(1)(f); MD 24, Art. 11

PART 3

Methodology

How the number was arrived at.

How shared costs were apportioned between R&D and other work

The basis for including or excluding each item

Which staffing tier was applied, and why

How the 30% staff uplift was calculated

Adjustments for grant-funded expenditure

The test, in one question

Could a competent professional in your field have predicted the outcome without doing the work? If yes, it is not R&D.

Retention

7 years from period end, accessible and organised by project. MD 24, Art. 12(1)

Not qualifying

Capital equipment and depreciation are not qualifying categories. CD 215, Art. 5(1)

The 2-6-14 staffing rule

Rates are marginal: each applies to a band of spend, not to the total. Each band needs both its spend level and its headcount — miss the headcount and that band earns nothing (MD 24, Art. 2(7)).

Band 1

15%

First AED 1,000,000

At least 2 R&D staff

Max AED 150,000 credit

Band 2

35%

AED 1M – 2M

At least 6 R&D staff

Max AED 350,000 credit

Band 3

50%

AED 2M – 5M

At least 14 R&D staff

Max AED 1,500,000 credit

Maximum total credit AED 2,000,000 per period

Staff costs carry a +30% uplift before rates apply · MD 24, Art. 8(3)

Rate table · MD 24, Art. 2(1)

Example: AED 3M of qualifying spend with only 10 R&D staff earns credit on the first AED 2M (Bands 1 and 2) and nothing on the remaining AED 1M, because Band 3 needs 14+.

Contractors and agency staff can count

Externally Provided Workers are treated as Staff Costs, so they attract the 30% uplift and count toward the 2-6-14 thresholds — unlike subcontractors. Misclassifying them costs you both. Four conditions apply under MD 24, Art. 8(9).

Step 3

Apply for Council pre-approval

The UAE regime is not self-assessed. Every project needs written approval from the Emirates R&D Council before the credit can appear on a return (MD 24, Art. 4(1); CD 215, Art. 3(1)(b)). One application per project.

What the Council assesses

Whether the activity is novel and creative

Whether genuine scientific or technological uncertainty exists

Whether the approach is systematic and documented

Whether outcomes are transferable or reproducible

Whether the work is being conducted in the UAE

Commercial viability is not assessed — only technical eligibility as R&D.

What you submit

A project description aligned to the Frascati criteria

The technical narrative from Part 1 of your dossier

A project plan with milestones, timeline and budget

R&D staff detail: names, roles, qualifications, time allocation

An estimate of qualifying expenditure for the period

Batch submissions where you can, but each must stand alone.

Portal not yet open. The Council has not published its form, deadlines or review timelines. Start documentation now so you can submit the day it opens.

Step 4

Calculate the credit

A worked example: a UAE technology company with 8 qualifying R&D staff, ending at a credit of AED 451,000.

What the Council assesses

R&D staff salaries1,200,000

Materials and consumables150,000

Software licences (non-capital)70,000

Subcontracted R&D (UAE)80,000

Equipment depreciation · excluded70,000

Qualifying, pre-uplift1,500,000

What the Council assesses

Staff costs1,200,000

+ 30% uplift on staff360,000

+ Consumables, licences, subcontracting300,000

Total qualifying expenditure AED 1,860,000

The uplift applies to staff costs only — not consumables or subcontracting. MD 24, Art. 8(3)

What the Council assesses

Band 1

15%

AED 1,000,000 in band

2+ staff required · met

AED 150,000

Band 2

35%

AED 860,000 in band

6+ staff required · met

AED 301,000

Band 3

50%

AED 0 in band

14+ staff required · not met

AED 0

Total R&D Tax Credit

AED 451,000

Well within the AED 2,000,000 cap. Grow to 14 qualifying staff and above AED 2M of spend and Band 3 opens — which is why headcount is an operational planning decision, not just a tax one. MD 24, Arts. 2(1), 2(7), 8(3)

Applying the credit

Offset against Corporate Tax first, then any Top-up Tax. Non-refundable in Phase 1. Unused credits carry forward, subject to 50% ownership continuity or the same-business exception. Carry-forward rules →

CD 215, Arts. 6(1) & 6(3); MD 24, Art. 5

Run the same calculation on your own numbers.

Step 5

File with the FTA

The credit is not a separate application — it sits inside your Corporate Tax return (CD 215, Art. 9(2)).

31 DEC 2026

Tax period ends

9 MONTHS

Filing window

30 SEP 2027

Return and credit due

Pre-filing checklist

In the return

Evidence of ERDC pre-approval for every project claimed · Art. 9(1)(a)

Signed management declaration on the claim’s accuracy · Art. 9(1)(b)

Expenditure breakdown by project and cost category · Art. 9(1)(c)

Audited financial statements for the period · Art. 9(1)(d)

The calculated credit, showing tier, uplift and rates used

Audit-ready behind it

Full three-part dossier retained per project

Claimed expenditure reconciled to audited accounts

Seven-year retention policy in place and enforced

R&D staff available to explain the technical narrative

A clear trail from expenditure records to the credit claimed

Pitfalls

Five mistakes that cost claims

01

Reconstructing documentation later

The most common and most costly. Write-ups produced at filing time miss detail and read as retrospective. Contemporaneous records always carry more weight.

02

Assuming all innovation qualifies

Routine development, cosmetic improvement and process optimisation without genuine technical uncertainty fail the Frascati criteria.

03

Missing the staffing threshold

Claim Band 2 with 5 qualifying staff and the spend above AED 1M earns nothing. Evidence headcount with contracts, time records and project assignments. MD 24, Art. 2(7)

04

Treating pre-approval as optional

A claim filed without Council approval is rejected. It is a gating condition with no exceptions. MD 24, Art. 4(1)

05

Triggering the five-year claw-back

The severest consequence in the regime. Within five years of the end of the period in which you last claimed, utilised credits become Payable Tax and unutilised credits are forfeited if the entity does any of:

Ceases to be a Taxable Person

Becomes a Qualifying Free Zone Person

Elects Small Business Relief

Enters liquidation

Redomiciles outside the UAE

Genuine business restructuring is excepted. Note it works retrospectively: an SBR election in 2028 claws back a 2026 credit. MD 24, Art. 16

Most of these are avoidable with the right process in place from day one.

Talk to our team →

faq

Frequently Asked Questions

Do I need pre-approval from the Emirates R&D Council?

Yes, for every project, every tax period. You submit the project to the Council and receive written approval before including it in your return. This is what distinguishes the UAE regime from self-assessed systems like the UK’s, and it is a gating condition with no exceptions (MD 24, Art. 4(1)).

Can I carry forward unused credits?

Yes. Where the credit exceeds your liability, the unused portion carries forward (CD 215, Art. 6(3); MD 24, Art. 5). Carry-forward requires that the same persons continuously owned at least 50% of the entity, or that the entity continues the same or a similar business. Listed companies are exempt from the ownership test. If a funding round will change ownership by more than 50%, take advice before it closes.

Can contractors and agency workers count as R&D staff?

Yes, as Externally Provided Workers under MD 24, Art. 8(9) — provided they are not directors or employees, they work through a staff provider or as an independent contractor, they are personally obliged under contract rather than substitutable, and the work is not subcontracting. EPW costs attract the 30% uplift and count toward the 2-6-14 thresholds.

How long must I keep the documentation?

At least seven years from the end of the relevant tax period, accessible on request from the Council or the FTA (MD 24, Art. 12(1)). For a calendar-year 2026 period that means holding records until at least 31 December 2033. Digital storage is fine if organised by project and period.

What happens if the FTA audits my claim?

The FTA may request further documentation or explanation. A complete, contemporaneous three-part dossier plus your Council pre-approval puts you in a strong position. Make sure claimed expenditure reconciles to your audited accounts and that R&D staff are available to talk through the technical narrative.

Next steps

Ready to start your claim?

The credit is live for tax periods starting 1 January 2026. Documentation built while projects run is far stronger than documentation reconstructed afterwards.

Book a Consultation

Talk through your project documentation and timeline

Check Eligibility

The four gates in detail with the free zone conditions

Estimate your credit

Model the value upto three R&D projects.

R&D tax credits are all we do. Built in Manchester in 2017, AED 396M+ (£80M+) processed in UK claims. Now claiming for the UAE.

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