UAE Launches Phase 1 R&D Tax Incentives Programme - 50% Credit, AED 5M Cap
Summary
The UAE Ministry of Finance announced Phase 1 of its Research and Development Tax Incentives Programme on March 18, 2026. The programme offers a non-refundable R&D tax credit of up to 50% on qualifying expenditure capped at AED 5 million per business. The programme is designed to encourage private-sector investment in R&D and innovation while supporting the UAE's ambition to become a global hub for advanced industries and emerging technologies.
What changed
The UAE Ministry of Finance has launched Phase 1 of its Research and Development Tax Incentives Programme, establishing a non-refundable 50% tax credit on qualifying R&D expenditure with a cap of AED 5 million per business. The programme considers OECD Pillar Two framework developments and reflects the early stage of the UAE's Corporate Tax regime.
Businesses undertaking genuine R&D activities in the UAE can now claim this credit, with Phase 2 expected to evaluate potential enhancements including refundable credits and expanded qualifying expenditure thresholds across the economy or within priority sectors. The Ministry will monitor uptake and gather data to inform future policy development.
What to do next
- Review R&D Tax Incentives Programme eligibility criteria and prepare documentation of qualifying R&D expenditure
- Claim the non-refundable 50% credit on qualifying expenditure up to AED 5M through UAE tax filings
- Monitor for Phase 2 announcements which may include refundable credits or expanded thresholds
Archived snapshot
Apr 10, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
UAE Launches Phase 1 of Research and Development Tax Incentives Programme
March 18, 2026
The UAE today announced the launch of Phase 1 of its Research and Development (R&D) Tax Incentives Programme, marking an important step in strengthening the country’s innovation ecosystem and supporting sustainable, long-term economic growth.
Under the first phase of the programme, businesses will be able to benefit from a non-refundable R&D tax credit of up to 50% on qualifying expenditure of up to AED 5 million. The measure is designed to encourage private-sector investment in research and innovation, while supporting the UAE’s ambition to become a global hub for advanced industries and emerging technologies.
The initial design of the incentive takes into account recent developments under the OECD Pillar Two framework, recognising that in the current international tax environment a non-refundable credit is expected to deliver a more favourable and predictable effective tax rate outcome for companies operating in the UAE.
The introduction of an easy to administer, non-refundable credit also reflects the early stage of the UAE’s Corporate Tax regime, which was recently implemented. Phase 1 has therefore been structured to provide immediate and meaningful support to businesses undertaking genuine R&D activities, while enabling the Ministry of Finance to monitor uptake, assess behavioural and economic impacts, and gather the data necessary to inform future policy development.
Insights from Phase 1 will guide the design of Phase 2 of the R&D Tax Incentives Programme. During the next phase, the Ministry of Finance will evaluate potential enhancements, including consideration of a refundable credit and/or expanding the level of qualifying expenditure eligible for relief, either across the economy or within priority sectors.
Further details on Phase 2 will be announced in due course.
Through this phased approach, the UAE continues to reinforce its commitment to a competitive, transparent and internationally aligned tax framework that supports innovation, attracts investment, and accelerates the nation’s long-term economic transformation.
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