The UAE has moved to introduce an R&D incentive within its corporate tax regime. It is expected to be expenditure-based and refundable, with the benefit scaled by factors such as company size and local substance.
Because the rules are being finalized and phased in, treat any specific rate or start date as provisional and confirm the current position with the Federal Tax Authority or a qualified UAE adviser.
Aligning R&D record-keeping with the OECD Frascati definition of R&D and maintaining UAE substance are expected to be central to eligibility.
Who qualifies
- Businesses within the UAE corporate tax regime performing qualifying R&D in the UAE (expected).
- Eligibility is expected to emphasize local substance and expenditure incurred in the UAE.
- Confirm the current qualifying-taxpayer definition with official guidance.
Eligible activities
- Research and development aligned with the OECD Frascati definition (expected).
- Qualifying expenditure incurred on R&D performed in the UAE (expected).
Typically not eligible
- Activities outside the qualifying R&D definition once published.
- Expenditure without adequate substance or documentation.
How a claim works
- 1
Confirm the current rules
Check the latest FTA guidance for the effective date, rate, and qualifying-taxpayer definition.
- 2
Map R&D to Frascati
Classify activities against the OECD Frascati definition expected to underpin eligibility.
- 3
Establish UAE substance
Document that qualifying R&D and expenditure occur in the UAE.
- 4
Build records early
Maintain contemporaneous technical and cost documentation ahead of the first claim.
- 5
Claim through corporate tax
Apply the incentive through the corporate tax return once the rules are in force.
What to document
- Technical descriptions aligned with the Frascati definition of R&D.
- Cost records for qualifying UAE expenditure.
- Evidence of local substance and where the work is performed.
- Governance records supporting the qualifying-taxpayer position.
Common pitfalls
- Relying on provisional figures instead of the enacted rules.
- Insufficient UAE substance for claimed expenditure.
- Starting documentation only at claim time.
Questions to ask an advisor
- “How current is your reading of the enacted UAE R&D incentive rules?”
- “How do you align our R&D records with the Frascati definition?”
- “How do you evidence UAE substance for qualifying expenditure?”
- “What is your experience with the FTA corporate tax filings?”
Frequently asked
Is the UAE R&D incentive available now?
It is being introduced and phased in within the corporate tax framework. Treat specific rates and dates as provisional and confirm the current status with the Federal Tax Authority.
What defines qualifying R&D?
Eligibility is expected to align with the OECD Frascati definition of research and development, with emphasis on UAE substance.