UAE R&D Tax Credit 2026: Who Qualifies, How to Claim

In March 2026 the Ministry of Finance launched Phase 1 of the UAE Research and Development Tax Incentives Programme. It gives businesses a non-refundable R&D tax credit of up to 50% on qualifying expenditure of up to AED 5 million, set against their Corporate Tax.

The rules are in Cabinet Decision No. 215 of 2025 and Ministerial Decision No. 24 of 2026, and apply to tax periods starting on or after 1 January 2026. For a calendar-year company, that means R&D you do this year can be claimed in the 2026 return, filed in 2027.

Who can claim

Businesses subject to UAE Corporate Tax that carry out qualifying R&D activities in the UAE.
The project must be approved in advance by the relevant council before the credit can be claimed.
Minimum thresholds apply: qualifying spending of at least AED 500,000 per project in the tax period, and a minimum number of employees working on R&D, as set by the Minister.

Qualifying Free Zone Persons can benefit too, but the income from the R&D must either be taxed at 9% or be subject to Top-up Tax.

What counts as qualifying expenditure

Qualifying spending generally includes:

Staff costs for employees directly carrying out R&D
Consumables used up in the R&D
Subcontracted R&D, within the limits in the decision
Payments under cost contribution arrangements
R&D costs that are capitalised as intangible assets

The R&D itself must be carried out in the UAE. Routine testing, quality control and ordinary product updates do not count.

How the credit works

The credit reduces your Corporate Tax or Top-up Tax for the period.
It is non-refundable: it cannot create a cash payment from the FTA.
Unused credit can be carried forward and used in later periods.
You claim it in the Corporate Tax return, and you need audited financial statements for the period.

What Phase 2 may bring

The Ministry has said it will consider a refundable credit and/or a higher level of qualifying expenditure, either across the economy or in priority sectors. Details will be announced later, so Phase 1 is the rule for 2026.

What to do now

Identify projects that could qualify and estimate the spending for 2026.
Apply for pre-approval early. Without it, there is no credit.
Track R&D costs separately in your books, by project and by type of cost.
Record staff time spent on R&D, with timesheets or project logs.
Plan for an audit of your 2026 financial statements if you do not already have one.

How Dreambooks helps

Dreambooks lets you tag costs and staff time to R&D projects as they are recorded, so qualifying expenditure by project and by category is ready for the audit and the Corporate Tax return.

Official sources

This article is general information as of August 2026, not tax advice. Check Cabinet Decision No. 215 of 2025, Ministerial Decision No. 24 of 2026 and the latest guidance, or speak to your tax adviser, before acting.

The UAE R&D Tax Credit: Who Qualifies and How to Claim from 2026