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Do You Qualify for the UAE R&D Tax Credit?

No pre-approval, no claim. The UAE requires written approval from the Emirates R&D Council before the credit can enter your Corporate Tax return. Approval is a gating condition with no exceptions. Four gates decide whether you qualify.

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The four gates, explained in six minutes

Everything on this page, walked through by our R&D tax team. Watch it end to end, or jump to the gate that applies to you.

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chapters

000

Why pre-approval changes everything

0:54

Gate 1 · Entity, and the Free Zone trap

2:10

Gate 2 · Activity, the five criteria

3:28

Gate 3 · Expenditure and the 30% uplift

4:31

Gate 4 · Staffing tiers and the AED 2M cap

5:22

What to prepare before applications open

01 · The model

Approval comes first

The Emirates R&D Council assesses your project before any benefit exists. That makes the application, not the tax return, the moment your credit is won or lost.

STEP 01

Prepare

Assess each project against the five criteria and build the technical narrative and expenditure breakdown.

STEP 02

Apply to the Council

Submit a pre-approval application for every qualifying project, every tax period, in the prescribed form.

STEP 03

Written approval

The Emirates R&D Council assesses the project. Without approval, there is no claim and no fallback.

STEP 04

Claim

Include the credit in your Corporate Tax return, with proof of approval attached.

Do not assume past spend qualifies. Approval is a gating condition with no exceptions, and the Council has not yet published its procedures or timelines. Until it does, expenditure incurred before approval should not be assumed to qualify — which is why documenting projects now, as they run, protects your position.

02 · The tests

Four gates. You must pass all four.

Set out in Cabinet Decision No. 215 of 2025 and Ministerial Decision No. 24 of 2026.

01

Entity

Are you the right kind of taxpayer?

02

Activity

Is the work genuinely R&D?

03

Expenditure

Is the spend the right type and size?

04

Staffing

Do you have enough R&D people?

Gate 1

Entity

A Qualifying Entity is one of two types (CD 215, Art. 1). Free Zone entities can qualify, but only on extra conditions.

1

UAE-incorporated company

Subject to Corporate Tax and/or Top-up Tax, carrying on Qualifying R&D Activities. Mainland LLCs, JSCs and equivalent forms.

CD 215, Art. 1(1)

2

Foreign company with a UAE PE

R&D must be conducted through the Permanent Establishment, and only expenditure attributable to it counts.

CD 215, Art. 1(2)

3

Free Zone (QFZP) conditions

How the number was arrived at.

A QFZP must also meet one of:

A · 9% Corporate Tax on income from the R&D activities

B · Subject to Pillar Two Top-up Tax

A 0%-taxed QFZP below the EUR 750M threshold meets neither, so cannot claim.

Full free zone guide →

CD 215, Art. 3(2)

✓

UAE mainland LLCs and joint-stock companies

Foreign groups operating through a UAE PE

QFZPs meeting Condition A or B

Pre-revenue companies (credits carry forward)

✕

Entities not subject to Corporate Tax or Top-up Tax · Art. 4(1)

Anyone electing Small Business Relief · Art. 4(2)

0%-taxed QFZPs outside Pillar Two

Entity types later excluded by the Minister · Art. 4(3)

Five-year claw-back: 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 ceases to be a Taxable Person, becomes a QFZP, elects Small Business Relief, enters liquidation or redomiciles outside the UAE. Genuine business restructuring is excepted (MD 24, Art. 16).

gate 2

Activity

All five criteria must be met at once (MD 24, Art. 3(1)), assessed against the OECD Frascati Manual. Partial satisfaction fails.

01

Novel

Aims to produce findings that are new to your business.

Fails when: configuring off-the-shelf tools. Customisation isn’t novelty.

02

Creative

Involves original concepts or hypotheses.

Fails when: routine feature work using established methods.

03

Uncertain

The outcome, or the route to it, isn’t known in advance

Fails when: the solution is known and only implementation remains.

04

Systematic

Follows a documented plan and budget.

Fails when: work is informal and untracked. The Council can’t approve what it can’t see.

05

Transferable

Results can be reproduced or applied elsewhere.

Fails when: know-how lives only in engineers’ heads.

The five-criteria test needs expert interpretation against the Frascati Manual.

Gate 3

Expenditure

Both the amount and the type of spend must qualify (CD 215, Art. 5; MD 24, Arts. 8–11).

AED 500,000

Minimum, per project

Per project, per tax period — not aggregate. Two projects each need AED 500k. The 30% staff uplift is excluded from this floor. CD 215, Art. 5(3)(b)

AED 5,000,000

Maximum, per tax period

Per entity or tax group. At the top 50% rate this is a maximum credit of AED 2M, not AED 5M — a figure much commentary gets wrong. MD 24, Art. 2(1)

What counts

Staff costs

+30% uplift

Salaries, allowances, insurance, pensions, gratuity, bonuses and benefits for UAE-based R&D staff. Part-time apportioned. ESOPs excluded. EPWs qualify.

MD 24, Art. 8

Consumables

Materials consumed and no longer usable: lab materials, non-capital software licences, water, fuel, power, clinical trial payments. Apportioned if partly used.

MD 24, Art. 9

Subcontracting

UAE-based subcontractor, work done in the UAE, no chain subcontracting. Related parties need audited accounts and transfer pricing.

MD 24, Art. 10

Cost contribution arrangements

Arm’s length contributions to joint R&D. Only your own contributed portion qualifies.

MD 24, Art. 11

Capitalised intangibles

The above costs where capitalised for internally generated intangibles arising from qualifying R&D.

CD 215, Art. 5(1)(f)

✕ What doesn't count

Not wholly and exclusively for qualifying R&D

Below the AED 500k per-project floor

Not deductible under Corporate Tax law

Funded by a government grant

Already claimed under another relief

CD 215, Art. 5(3)

Gate 4

Staffing

The credit is progressive across three tiers. Each tier needs both its expenditure band and its staff count — miss the headcount and you drop to the highest tier you do satisfy (MD 24, Art. 2(7)).

Tier 1

15%

First AED 1,000,000

At least 2 R&D staff

tier 2

35%

AED 1M – 2M

At least 6 R&D staff

tier 3

50%

AED 2M – 5M

At least 14 R&D staff

The credit is progressive across three tiers. Each tier needs both its expenditure band and its staff count — miss the headcount and you drop to the highest tier you do satisfy (MD 24, Art. 2(7)).

See what your credit could be worth

03 · The standard

Staffing

The Council won’t ask whether your work is novel, creative, uncertain, systematic and transferable. It will ask you to prove it. In the UK, the most common reason claims fail is a vague technical narrative — genuine R&D described in marketing language. Four things make an application defensible:

01

Assess

Test each project against the five Frascati criteria before anything is written.

02

Narrate

Name the advance sought, the baseline knowledge, the uncertainties and their resolution.

03

Categorise

Allocate spend across qualifying categories with defensible apportionments.

04

Document

Build an evidence pack that holds up to the seven-year retention standard.

ICAEW Chartered Accountants, AED 396M+ (£80M+) in R&D incentives secured in the UK 1,300+ R&D claims processed (UK practice)

faq

Frequently Asked Questions

Can a startup with no revenue claim the credit?

Yes, if it passes all four gates and obtains Council pre-approval. The credit is non-refundable in Phase 1, so a pre-revenue company generates unused credits that carry forward under CD 215, Art. 6(3), subject to 50% ownership continuity (MD 24, Art. 5). Electing Small Business Relief excludes you entirely (CD 215, Art. 4(2)).

Is the credit a cash refund?

No. In Phase 1 it is non-refundable: it offsets Corporate Tax and/or Top-up Tax liability but cannot generate a cash payment. The Minister may make it refundable in future (CD 215, Art. 2(3)(b)), but no timeline is confirmed.

Does a Free Zone company qualify?

Potentially. A QFZP must be subject to 9% Corporate Tax on income from its qualifying R&D activities, or subject to Pillar Two Top-up Tax, in the relevant period (CD 215, Art. 3(2)). A QFZP earning 0% on qualifying income and outside Pillar Two does not qualify.

Can I claim for overseas team members?

No. Only R&D conducted within the UAE qualifies (MD 24, Art. 3(3)). Overseas staff costs count toward neither qualifying expenditure nor the staffing thresholds, even if employed by the UAE entity.

When do pre-approval applications open?

The Council has not yet published the application form, prescribed manner or timeline. Prepare technical documentation and expenditure records now: waiting until the form appears risks missing the first filing deadline for periods starting 1 January 2026.

Next steps

Start preparing now

The Council’s pre-approval process will open, and the businesses that are ready will secure their credits. Documentation built while projects run is far stronger than documentation reconstructed afterwards.

Book a Consultation

Talk through your eligibility and pre-approval strategy.

Estimate your credit

Model the value across up to three R&D projects.

How to claim

The five-step guide from documentation to FTA filing.

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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