Cabinet Decision Cabinet Decision No. 215 of 2025 Cabinet

CD 215/2025 — Research and development (R&D) tax credit

Cabinet Decision No. 215 of 2025 on R&D Tax Credit for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses

In force Issued 31 December 2025

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Official Arabic title
قرار مجلس الوزراء رقم (215) لسنة 2025 في شأن الرصيد الضريبي للبحث والتطوير لأغراض المرسوم بقانون اتحادي رقم (47) لسنة 2022 في شأن الضريبة على الشركات والأعمال
Document type
Cabinet Decision
Number
215
Issued by
Cabinet
Administered by
Federal Tax Authority
Issued
31 December 2025
Entry into force
Effective from the day following its publication in the Official Gazette (Art. 14); issued 31 December 2025; applies to Tax Periods or Fiscal Years commencing on or after 1 January 2026 (Art. 13).
Applies to
Juridical persons subject to Corporate Tax and/or Top-up Tax that carry on Qualifying R&D Activities in the State.
Current position
In force. No amendment is recorded in the texts held. Rates, staff thresholds and detailed rules are set by Ministerial Decision No. 24 of 2026.
Topics
Corporate Tax ·
Official text
Official Arabic text · English text

Factual summary

Introduces an R&D Tax Credit equal to a percentage of Qualifying R&D Expenditure, usable against Corporate Tax and/or Top-up Tax, for Tax Periods or Fiscal Years starting on or after 1 January 2026. The entity needs pre-approval from the Emirates Research and Development Council, enough R&D staff, the financial burden and a share of the returns; expenditure counts only at AED 500,000 or more per R&D Project, if deductible (capitalised costs aside), not grant-funded and not otherwise relieved, and Qualifying Free Zone Persons qualify only on 9% taxable R&D income or under Top-up Tax. The claim is made in the Tax Return or Top-up Tax Return, unused credit is carried forward, and credit is clawed back with penalties if the conditions stop being met.

What it means in practice Professional insight

Who: companies and Multinational Enterprise group members carrying out research and development in the UAE. What to check: Council pre-approval before claiming, the AED 500,000 per-project minimum, audited financial statements, grant funding and other reliefs, and the claw-back exposure.

Key provisions

  • Art. 1 A Qualifying Entity is a juridical person established in the State (including a Free Zone Person), or a foreign juridical person through a Permanent Establishment, that is subject to Corporate Tax and/or Top-up Tax and carries on Qualifying R&D Activities; a Qualifying R&D Activity is an activity conducted in the State as part of an R&D Project meeting the requirements of a Minister's decision; the Council is the Emirates Research and Development Council.
  • Art. 2 The R&D Tax Credit is a percentage of the Qualifying R&D Expenditure incurred in the Tax Period or Fiscal Year and is used against Corporate Tax and/or Top-up Tax of the Qualifying Entity or another Person under Art. 7; a Minister's decision sets the rates and their conditions (by expenditure amount and number of employees engaged in Qualifying R&D Activities), whether the credit is refundable, and its computation.
  • Arts. 3–4 Conditions: the minimum number of R&D employees set by the Minister, pre-approval from the Council and ongoing compliance, bearing the financial burden, a beneficial share in the returns from exploiting the results, and a project aimed at increasing knowledge; a Qualifying Free Zone Person must also be subject to Corporate Tax at 9% on Taxable Income derived from the Qualifying R&D Activities, or to Top-up Tax, for that period; entities subject to neither Corporate Tax nor Top-up Tax and entities that elected Art. 21 of the Corporate Tax Law are excluded.
  • Art. 5 Qualifying R&D Expenditure covers staff costs, consumable costs, subcontracting fees, an arm's length share of contributions under cost contribution arrangements, other categories set by the Minister and such costs capitalised for internally generated intangibles; it qualifies only if incurred wholly and exclusively for Qualifying R&D Activities, it amounts to at least AED 500,000 for each R&D Project in the Tax Period or Fiscal Year (excluding any uplift to staff costs), it is Deductible Expenditure (except costs capitalised under Art. 5(1)(f)), it is not funded by a Grant and it receives no other incentive, credit, exemption or relief.
  • Arts. 6, 8 The credit is first used against the Corporate Tax and/or Top-up Tax of the period for which a valid claim is submitted, earlier credits before later ones, and any unused credit may be carried forward; if the conditions were not continuously met for an R&D Project, credit refunded or used must be repaid to the Authority, unused credit is forfeited, and no other credits, reliefs, Tax Losses or Pillar Two Losses may be offset against the claw-back.
  • Arts. 9, 11 The claim is submitted in the Tax Return or Top-up Tax Return for the period in which the expenditure is incurred, with proof of the Council's pre-approval, a senior-management declaration, a breakdown of Qualifying R&D Expenditure and audited financial statements; late claims are not considered unless the Authority accepts them in exceptional circumstances; on claw-back, penalties under Federal Decree-Law No. 28 of 2022 apply as if the amount were Due Tax or Payable Tax.
  • Arts. 13, 14 Applies to Tax Periods or Fiscal Years commencing on or after 1 January 2026; published in the Official Gazette and effective from the day following its publication.

What changed

  1. 31 December 2025 Issued
  2. Entry into force: Effective from the day following its publication in the Official Gazette (Art. 14); issued 31 December 2025; applies to Tax Periods or Fiscal Years commencing on or after 1 January 2026 (Art. 13).

Relationship chain

Law → decisions made under it → amendments → guidance and announcements; oldest first within each level.

  1. 3 October 2022 Federal Decree-Law FDL 47/2022 — Corporate Tax Law In force — amended
    1. 30 December 2022 Cabinet Decision CD 116/2022 — AED 375,000 rate band — Made under Art. 3(1) In force
    2. 10 March 2023 Ministerial Decision MD 43/2023 — Persons that do not register for Corporate Tax — Made under it In force
    3. 29 March 2023 Ministerial Decision MD 68/2023 — Government Entity businesses treated as a single Taxable Person — Made under Art. 5(6) In force
    4. 3 April 2023 Ministerial Decision MD 73/2023 — Small Business Relief — Made under Art. 21 In force — amended
      1. August 2023 Official guide FTA guide CTGSBR1 — Small Business Relief — Official guide Current version
      2. 29 July 2026 Ministerial Decision MD 131/2026 — SBR extended to 2029 — Amends Art. 2(2) In force
        1. 7 August 2026 Official announcement MoF news 7 Aug 2026 — SBR to 2029 — Announcement Current version
    5. 7 April 2023 Cabinet Decision CD 37/2023 — Qualifying Public Benefit Entities (list updated September 2026) — Made under it In force — amended
    6. 7 April 2023 FTA Decision FTA Decision 5/2023 — When a Corporate Tax period can be changed — Made under Art. 58 In force
    7. 7 April 2023 FTA Decision FTA Decision 6/2023 — Deadline to deregister for Corporate Tax — Made under Art. 52(1) In force
    8. 7 April 2023 FTA Decision FTA Decision 7/2023 — Exempt persons' registration and exemption applications (repealed) — Made under Art. 4(1) Repealed
    9. 10 April 2023 Ministerial Decision MD 82/2023 — Who had to prepare audited financial statements (repealed) — Made under Art. 54(2) Repealed
    10. 10 April 2023 Ministerial Decision MD 83/2023 — When a stranded individual does not create a Permanent Establishment — Made under Art. 14(7)(a) In force
    11. 27 April 2023 Ministerial Decision MD 97/2023 — Who must keep a transfer pricing master file and local file — Made under Art. 55(2) In force
    12. 4 May 2023 Ministerial Decision MD 105/2023 — When a Person stays exempt, or stops being exempt from a different date — Made under Art. 4(6) In force
    13. 8 May 2023 Cabinet Decision CD 49/2023 — When an individual's business is subject to Corporate Tax — Made under Art. 11(6) In force
    14. 9 May 2023 Ministerial Decision MD 114/2023 — Accounting standards and the cash basis for Corporate Tax — Made under Art. 20 In force
    15. 10 May 2023 Ministerial Decision MD 115/2023 — Private pension and social security funds — Made under Art. 4 In force
    16. 10 May 2023 Ministerial Decision MD 116/2023 — Participation exemption (repealed) — Made under Arts. 23, 24 Repealed
    17. 16 May 2023 Ministerial Decision MD 120/2023 — Transitional adjustments for assets held before the first Tax Period — Made under Arts. 20, 61 In force
    18. 22 May 2023 Ministerial Decision MD 125/2023 — Tax Group (repealed) — Made under Arts. 40–42 Repealed
    19. 23 May 2023 Ministerial Decision MD 126/2023 — General interest deduction limitation rule — Made under Art. 30 In force
    20. 24 May 2023 Ministerial Decision MD 127/2023 — Unincorporated partnerships, foreign partnerships and family foundations (repealed) — Made under Arts. 16, 17 Repealed
    21. 25 May 2023 Ministerial Decision MD 132/2023 — Transfers of assets and liabilities within a Qualifying Group — Made under Art. 26 In force
    22. 25 May 2023 Ministerial Decision MD 133/2023 — Business Restructuring Relief — Made under Art. 27 In force
    23. 29 May 2023 Ministerial Decision MD 134/2023 — General rules for determining Taxable Income — Made under Art. 20 In force
    24. 30 May 2023 Cabinet Decision CD 56/2023 — Non-resident nexus through UAE real estate (repealed) — Made under Arts. 11, 12 Repealed
    25. 30 May 2023 Cabinet Decision CD 55/2023 — Qualifying Income of a Qualifying Free Zone Person (repealed) — Made under Art. 18 Repealed
      1. 1 June 2023 Ministerial Decision MD 139/2023 — Qualifying and excluded activities for free zone persons (repealed) — Made under Arts. 1, 4 Repealed
    26. 10 July 2023 Cabinet Decision CD 75/2023 — Corporate Tax administrative penalties — Made under it In force — amended
      1. 22 February 2024 Cabinet Decision CD 10/2024 — AED 10,000 penalty for late Corporate Tax registration — Amends Art. 1 In force
    27. 18 July 2023 Cabinet Decision CD 81/2023 — Conditions for qualifying investment funds and REITs (repealed) — Made under Art. 10(1) Repealed
    28. 16 August 2023 FTA Decision FTA Decision 11/2023 — Annual declaration for exempt persons — Made under Art. 53(5) In force
    29. 16 August 2023 FTA Decision FTA Decision 12/2023 — Tax Groups of government-owned subsidiaries — Made under Art. 40(2) In force
    30. 16 August 2023 FTA Decision FTA Decision 13/2023 — Converting foreign-currency amounts to AED for Corporate Tax — Made under Art. 43 In force
    31. 25 October 2023 Cabinet Decision CD 100/2023 — Qualifying Income of a Qualifying Free Zone Person — Made under Art. 18 In force
      1. 27 October 2023 Ministerial Decision MD 265/2023 — Qualifying and excluded activities for free zone persons (repealed) — Made under Arts. 4, 7 Repealed
      2. 28 August 2025 Ministerial Decision MD 229/2025 — Qualifying and excluded activities for free zone persons — Made under Arts. 4, 7 In force
        1. 29 August 2025 Ministerial Decision MD 230/2025 — Recognised price reporting agencies for qualifying commodity trading — Made under it In force
        2. 22 December 2025 Ministerial Decision MD 336/2025 — Dubai VARA added as a Competent Authority for free zone fund and wealth management — Made under Art. 1 In force
        3. 2 June 2026 FTA Decision FTA Decision 6/2026 — Free-zone distributors: auditor's agreed-upon procedures report — Made under it In force
    32. 15 December 2023 FTA Decision FTA Decision 16/2023 — Registering unincorporated partnerships and partners' shares (repealed) — Made under Arts. 16, 51 Repealed
    33. 1 March 2024 FTA Decision FTA Decision 3/2024 — CT registration deadlines — Made under Art. 51(1) In force
    34. 13 August 2024 Public Clarification CTP003 — first Corporate Tax period — Clarifies Arts. 57–58 Current version
    35. 25 September 2024 FTA Decision FTA Decision 7/2024 — First Corporate Tax return and payment deadline moved to 31 December 2024 — Made under Arts. 48, 53 Spent
    36. 28 October 2024 Ministerial Decision MD 261/2024 — Unincorporated partnerships, foreign partnerships and family foundations — Made under Arts. 16, 17 In force
      1. 19 May 2025 FTA Decision FTA Decision 5/2025 — Compliance for partnerships and family foundations — Made under Art. 4(3) In force
    37. 9 December 2024 Ministerial Decision MD 301/2024 — Tax Group rules — Made under Arts. 40–42 In force
    38. 10 December 2024 Ministerial Decision MD 302/2024 — Participation exemption and foreign PE exemption — Made under Arts. 23, 24 In force
    39. 31 December 2024 Cabinet Decision CD 142/2024 — Top-up Tax on multinational enterprises (Pillar Two) — Made under it In force
      1. 28 March 2025 Ministerial Decision MD 88/2025 — OECD commentary and guidance adopted for the UAE top-up tax (repealed) — Made under it Repealed
      2. 22 June 2026 Ministerial Decision MD 96/2026 — Updated OECD commentary and guidance adopted for the UAE top-up tax — Made under it In force
      3. 16 July 2026 FTA Decision FTA Decision 12/2026 — Top-up Tax registration and deregistration — Made under it In force
      4. 3 August 2026 Ministerial Decision MD 133/2026 — Who files the Pillar Two Information Return — Made under it In force
    40. 25 March 2025 Ministerial Decision MD 84/2025 — Who must prepare audited financial statements for Corporate Tax — Made under Art. 54(2) In force
      1. 16 July 2025 FTA Decision FTA Decision 7/2025 — Audited aggregated financial statements for Tax Groups — Made under Art. 2(2) In force
    41. 27 March 2025 Cabinet Decision CD 34/2025 — Qualifying investment funds, REITs and qualifying limited partnerships — Made under Art. 10(1) In force
      1. 14 April 2025 Ministerial Decision MD 96/2025 — 10% minimum free float for REITs listed in May 2025 — Made under Art. 4(1) In force
      2. 18 September 2025 FTA Decision FTA Decision 8/2025 — Compliance deadlines for qualifying investment funds and their investors — Made under Arts. 2, 3, 4 In force
    42. 27 March 2025 Cabinet Decision CD 35/2025 — When a non-resident has a nexus in the UAE — Made under Art. 11(4)(c) In force
    43. 2 May 2025 Cabinet Decision CD 55/2025 — Exemption for foreign entities owned by exempt persons — Made under Art. 4(1) In force
    44. 14 May 2025 Cabinet Decision CD 63/2025 — Unincorporated Partnership taxed in its own right — Made under Art. 16(8) In force
    45. 23 June 2025 Ministerial Decision MD 173/2025 — Depreciation for investment property at fair value — Made under Art. 20(3) In force
    46. 31 December 2025 Cabinet Decision CD 215/2025 — Research and development (R&D) tax credit — Made under it In force
      1. 18 March 2026 Ministerial Decision MD 24/2026 — R&D tax credit rates, qualifying activities and expenditure rules — Made under Arts. 5, 6, 7 In force
    47. 12 January 2026 Cabinet Decision CD 1/2026 — Corporate Tax exemption for certain sports entities — Made under Art. 4(1) In force
    48. 8 September 2026 FTA Decision FTA Decision 15/2026 — Applying for Corporate Tax exemption — Made under Art. 51(2) In force

Official sources

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Related services: Corporate Tax

Last verified against official sources: 26 October 2026 · اقرأ بالعربية

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General information, not tax advice. Each record is checked against the official source; where they differ, the official Arabic text prevails.