How to Claim the UAE R&D Tax Credit: A Step-by-Step Guide

Step 1: Confirm Your Eligibility

Before you invest time in documentation and pre-approval, confirm that your business and your R&D activities meet the four eligibility gates.

Gate 1: Entity type

You must be a UAE juridical person (including Free Zone entities) or a foreign entity with a Permanent Establishment in the UAE. Entities that have elected Small Business Relief or are not subject to UAE Corporate Tax cannot claim. CD 215, Article 1; CD 215, Article 4

Gate 2: Activity type

Your R&D activities must be novel, creative, uncertain in outcome, systematic, and transferable or reproducible, assessed by reference to the OECD Frascati Manual. MD 24, Article 3(1)(a)–(e); MD 24, Article 3(2)

Gate 3: Minimum expenditure

Your qualifying R&D expenditure must be at least AED 500,000 per R&D project within the tax period. This threshold applies to each individual project, not as a cumulative total across all projects. The threshold is calculated on base qualifying expenditure before the 30% staff cost uplift is applied. A project with AED 400,000 of actual staff costs does not meet the threshold even after the uplift takes the calculated amount to AED 520,000. The minimum is tested against actual underlying expenditure. CD 215, Article 5(3)(b)

Gate 4: Conducted in the UAE

The R&D activities must be carried out in the UAE. MD 24, Article 3(3) Subcontracting fees qualify as expenditure where the subcontractor is UAE-based, activities are performed in the UAE, and no chain subcontracting occurs. MD 24, Article 10(1) There is no percentage cap on qualifying subcontracting fees.

Not sure if you qualify? Our eligibility page walks you through each gate in detail, with an interactive checklist.

Full eligibility breakdown →

Step 2: Document Your R&D Activities

Documentation is where most claims succeed or fail. The UAE framework requires you to maintain a structured dossier that covers three areas: technical eligibility, financial evidence, and methodology.

The Three-Part Documentation Dossier

The 2-6-14 Staffing Threshold

Ministerial Decision No. 24 of 2026 introduced a tiered staffing requirement that directly affects your credit rate. The rates are marginal: applied to portions (bands) of qualifying expenditure, not to the total qualifying expenditure as a flat rate:

Example: A company with AED 3M qualifying spend but only 10 R&D staff receives credit on the first AED 2M only (Bands 1 and 2, where 10 staff meets the 6+ threshold), and zero credit on the remaining AED 1M (Band 3 requires 14+ staff).

Legislative basis: MD 24, Article 2(1) (rate table); MD 24, Article 2(7) (dual threshold rule).

The 30% Staff Cost Uplift also applies: when calculating your qualifying expenditure, eligible staff costs are uplifted by 30% before the credit rate is applied. MD 24, Article 8(3)

This means your financial documentation must clearly identify each R&D staff member, their role, their time allocation to qualifying projects, and their cost to the business.

Full staffing threshold breakdown →

Record Retention

All documentation must be retained for at least seven years from the end of the relevant tax period and provided to the Emirates R&D Council and/or the Federal Tax Authority upon request. MD 24, Article 12(1)

Digital storage is acceptable, but records must be readily accessible and organised by project and tax period.

Step 3: Apply for Emirates R&D Council Pre-Approval

Unlike many international R&D tax credit regimes, the UAE system is not purely self-assessed. You must obtain pre-approval from the Emirates Research and Development Council (ERDC) for each R&D project before you can claim the credit on your tax return. MD 24, Article 4(1); CD 215, Article 3(1)(b)

What the Council Assesses

The ERDC evaluates whether your project meets the definition of a Qualifying R&D Activity. Specifically, they assess:

• Whether the activity is novel and creative
• Whether the activity involves genuine scientific or technological uncertainty
• Whether the approach is systematic and follows a documented plan
• Whether the expected outcomes contribute to new knowledge, products, processes, or services that are transferable or reproducible
• Whether the work is being conducted in the UAE

The Council does not assess the commercial viability of your project, only its technical eligibility as R&D.

What to Submit

Your pre-approval application should include:

• A project description aligned to the Frascati Manual criteria
• The technical eligibility narrative from your documentation dossier (Part 1)
• A project plan with milestones, timeline, and budget
• Details of R&D staff involved (names, roles, qualifications, time allocation)
• An estimate of qualifying expenditure for the tax period

Practical Preparation

Start the pre-approval process early in the tax period, ideally within the first quarter. The Council may request additional information or clarification, and you do not want the pre-approval timeline to delay your tax filing.

If you have multiple R&D projects, each project requires its own pre-approval application. Batch your submissions where possible, but ensure each application is self-contained with its own technical narrative and cost estimate.

Current Status

The ERDC pre-approval process is being established as part of Phase 1 of the R&D Tax Incentives Programme. The Council's application portal, submission deadlines, and review timelines will be published on the ERDC website. We recommend monitoring the Council's announcements and beginning your documentation preparation now so you are ready to submit as soon as the portal opens.

Full pre-approval guide →

ERDC strategy and role →

Step 4: Calculate and Claim the Credit

Once you have pre-approval and your documentation dossier is complete, you can calculate the credit.

The Credit Rates

The R&D Tax Credit is calculated on a banded (marginal) basis. The rate applied to each portion of qualifying expenditure depends on both the spend level reached and your average R&D staff headcount:

• 15% applies to the first AED 1,000,000 of qualifying expenditure, for entities with 2+ qualifying R&D staff MD 24, Article 2(1)
• 35% applies to qualifying expenditure between AED 1M and AED 2M, for entities with 6+ qualifying R&D staff
• 50% applies to qualifying expenditure between AED 2M and AED 5M, for entities with 14+ qualifying R&D staff

Both the spend threshold and the staff threshold must be met simultaneously for each band to apply. MD 24, Article 2(7) The maximum credit is AED 2,000,000 per tax period.

The 30% Staff Cost Uplift

Before applying the credit rate, eligible staff costs are uplifted by 30%. This means if your R&D staff costs are AED 1,000,000, they are treated as AED 1,300,000 for the purposes of calculating the credit. MD 24, Article 8(3)

Applying the Credit

The R&D Tax Credit is applied first against your UAE Corporate Tax liability, then against any Top-up Tax liability (for multinational groups subject to Pillar Two). CD 215, Article 6(1); MD 24, Article 2(2)

Full CD 215 analysis →

Full MD 24 analysis →

Try the Calculator →

Your Claiming Timeline

Calendar Year 2026 tax period:

Common Mistakes to Avoid

Frequently Asked Questions