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An overview by Al Tamimi & Company, Taxand UAE
The UAE has introduced a new R&D tax credit regime effective from 2026, aimed at strengthening its position as a global innovation hub. The scheme offers tiered, non-refundable tax credits of up to 50% on qualifying R&D expenditure (capped at AED 5 million), subject to staff thresholds, pre-approval, and strict compliance requirements.
While the regime provides a meaningful incentive for businesses investing in innovation, its complexity – particularly around eligibility, documentation, group structuring, and clawback rules – means careful planning is essential. The framework also interacts with global minimum tax (Pillar Two) rules, potentially affecting effective tax rates.
Rachel Fox, Samer Qudah, Ahmad Saleh, Nawel Benaisa and Sabeeha Moolla from our UAE member firm Al Tamimi & Company have published an article on the credit, noting that overall, the regime is a significant first step, with further enhancements expected as part of a broader R&D incentives programme. You can read the full article here.
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