Question 1

What are the Frascati criteria for UAE R&D credit eligibility?

Accepted Answer

The UAE R&D credit follows OECD Frascati-style criteria. Qualifying R&D activities must be: (1) Novel, aimed at new knowledge, products, or processes not achievable through routine methods; (2) Creative, based on original concepts rather than imitation; (3) Uncertain, with outcomes or methods uncertain at the start; (4) Systematic, conducted with a planned approach including hypotheses, experiments, and documentation; and (5) Transferable or reproducible. Activities in social sciences, humanities, or arts are explicitly excluded.

Question 2

Does software development qualify for the UAE R&D tax credit?

Accepted Answer

Software development can qualify for the UAE R&D credit if it meets Frascati-style criteria, meaning the project aims to resolve genuine technological uncertainty (not just using known frameworks or standard techniques). Routine development, maintenance, debugging of known issues, and UI/UX work without technological advancement generally do not qualify. The engineering work must be documented systematically.

Question 3

What is the minimum R&D spend required for the UAE credit?

Accepted Answer

Public summaries of the UAE R&D credit framework reference minimum qualifying expenditure thresholds per R&D project per tax period. The commonly cited figures suggest projects below approximately AED 50,000 may not meet the threshold, though exact figures should be confirmed against the current law and with qualified UAE tax advisors and Ministry of Finance publications.

Question 4

Must R&D activities be performed inside the UAE to qualify?

Accepted Answer

Yes. Per publicly described UAE rules, qualifying R&D activities must be performed inside the UAE, and the qualifying staff must be UAE-based employees working under the supervision and control of the claiming entity. Outsourced R&D performed outside the UAE or by overseas contractors is treated differently and may not qualify for the same credit rates.

Question 5

What types of companies can claim the UAE R&D tax credit?

Accepted Answer

UAE Corporate Tax-resident entities across all sectors, including technology, manufacturing, pharmaceuticals, energy, and financial services, can potentially claim the R&D credit if their activities meet the Frascati-style criteria. Social sciences, humanities, arts, and market research are excluded. Free Zone entities (QFZPs) should verify their specific eligibility with qualified advisors.

R&D Eligibility Screener

Does the work aim to produce new knowledge, products, or processes, not routine implementation?