UAE Launches First Phase of R&D Tax Incentive Program to Boost Innovation

UAE, 25 March, 2026: The UAE has announced the launch of the first phase of its Tax Incentives Program for Research and Development (R&D), reinforcing the country’s commitment to innovation and sustainable, knowledge-based economic growth.

Under this phase, eligible businesses can claim a non-refundable tax credit of up to 50% of qualifying R&D expenditures, capped at AED 5 million. The initiative is designed to encourage private sector investment in innovation and support the UAE’s ambition to become a global hub for advanced industries and future technologies.

The incentive also aligns with global tax developments, particularly the OECD’s Pillar Two framework, helping companies maintain more stable and transparent effective tax rates within the evolving international tax environment.

The Ministry of Finance stated that this initial phase will help assess the economic impact of the incentive and gather data to support future enhancements. The second phase may include expanded incentives, such as refundable tax credits or higher eligible expenditure limits, particularly for strategic sectors.

This initiative highlights the UAE’s continued efforts to strengthen a competitive and transparent corporate tax system that supports innovation, attracts investment, and accelerates long-term economic transformation.