{"id":114208,"date":"2026-03-23T00:00:00","date_gmt":"2026-03-23T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/uae\/?p=114208"},"modified":"2026-03-23T02:54:16","modified_gmt":"2026-03-23T02:54:16","slug":"finmin-introduces-tax-credits-for-rd-spend","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/uae\/2026\/03\/23\/finmin-introduces-tax-credits-for-rd-spend\/","title":{"rendered":"FinMin introduces tax credits for R&D spend"},"content":{"rendered":"

Companies can now reduce their corporate and domestic minimum<\/strong> top-up tax liability by claiming a credit <\/strong>against \u201celigible\u201d R&D expenditure<\/strong>, after the Finance Ministry rolled out tax breaks for companies doing R&D, according to a press release<\/a>. The tax incentive program will be rolled out in phases, and will apply on the tax period starting from 1 January, 2026, according to Alvarez and Marsal<\/a>. <\/p>\n

In the first phase of the program<\/strong>, firms that invest in scientific or technological advancements \u2014 think sectors like biotech, fintech, and advanced manufacturing \u2014 can lower their effective tax rate by up to 50% by claiming a non-refundable credit, capped at AED 5 mn, on qualifying spend. <\/p>\n

There\u2019s rules\u2026 and thresholds:<\/strong> The credit is tiered, meaning the first AED 1 mn of spend gets a 15% credit, the next gets 35%, and the final AED 3 mn gets 50%. You also cannot spend your way to a lower tax rate alone. You must meet a 14-person R&D headcount to unlock the 50% credit tier. If you have the spend but only five staff, your entire claim is capped at the 15% tier.<\/p>\n

What qualifies as R&D spend?<\/strong> Salaries (including a 30% uplift for overheads), consumables, and sub-contracting fees.<\/p>\n

What\u2019s next:<\/strong> A second phase is already on the table, and could include a refundable credit and potentially broader eligibility for what counts as qualifying expenditure. <\/p>\n

Why does a refundable credit matter? <\/strong>A refundable credit allows companies \u2014 especially ones that pay heavy R&D expenses like startups that have yet to become profitable \u2014 to receive a rebate if their R&D spend qualifies them for a tax credit that\u2019s larger than their current tax bill. Under the first phase, the non-refundable credit only allows them to pay zero tax in that case, with the remaining amount possibly carried forward to the next year. <\/p>\n

ICYMI<\/strong>- <\/strong>Tax incentives for R&D have been under consideration for a while now<\/a> \u2014 and the latest move signals that the UAE continues to double down on economic diversification efforts by focusing on advanced sectors like tech and AI. <\/p>\n","protected":false},"excerpt":{"rendered":"

Sectors like biotech, fintech, and advanced manufacturing can benefit from tax credits worth up to 50%<\/p>\n","protected":false},"author":1,"featured_media":114209,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1626],"tags":[19,7,11,1379],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-114208","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tax","tag-economy","tag-enterpriseam-uae","tag-finance-ministry","tag-tax","wpautop","entry"],"acf":{"mongo_id":"452fdb18-4ffe-43c7-8be5-df9b53f80aaf","order":"8","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2025\/12\/139.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Great news for R&D spenders","related_issue":[114195],"teaser":"Sectors like biotech, fintech, and advanced manufacturing can benefit from tax credits worth up to 50%"},"yoast_head":"\nFinMin introduces tax credits for R&D spend - 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