The UAE has now issued Ministerial Decision No. 24 of 2026, setting out the detailed implementing rules for the R&D Tax Credit framework introduced under Cabinet Decision No. 215 of 2025 for the purposes of the UAE Corporate Tax regime. For businesses engaged in technical or scientific advancement, this framework offers a powerful mechanism to reduce their effective tax burden while contributing to the nation’s knowledge-based economy.
The R&D Tax Credit is designed to lower the cost of innovation by allowing eligible Taxable Persons to claim a deduction from their Corporate Tax liability based on qualifying R&D expenditure. The framework aims to position the UAE as a global hub for high-tech industries and specialized research.
Not all research activities qualify. To be eligible, the activity must meet the “Five-Core-Criteria” test:
Novelty: Aimed at creating new findings or knowledge.
Creativity: Based on original, non-obvious concepts or hypotheses.
Uncertainty: Seeking to resolve a scientific or technical uncertainty.
Systematic: Performed according to a planned, documented process.
Transferability: Results must lead to knowledge that can be reproduced or transferred.
The decision clarifies which costs can be included in the tax credit calculation:
Staff Costs: Salaries and benefits for employees directly engaged in R&D.
Consumables: Materials and items used or transformed during the research process.
Contracted R&D: Specific rules for research outsourced to third parties or connected persons within the UAE.
Software & Utilities: Cost of specialized software and utilities directly attributable to research projects.
While the specific percentage of credit is determined by the Cabinet, the Ministerial Decision outlines the mechanical application:
The credit is applied as a direct reduction of the Corporate Tax Payable.
Carry-forward Provisions: Where the credit exceeds the tax payable in a specific period, the decision provides the conditions under which the excess can be carried forward to future tax periods.
Given the technical nature of R&D, the FTA requires rigorous documentation. Businesses must maintain:
Detailed project plans and technical reports.
Evidence of the scientific or technical uncertainty being addressed.
Comprehensive time-sheets for staff involved.
A clear “nexus” or link between the expenditure and the R&D activity performed in the UAE.
The issuance of Ministerial Decision No. 24 marks the transition of the R&D Tax Credit from a high-level concept to an actionable tax-saving tool.
The UAE’s Federal Tax Authority (FTA) has refined the landscape of tax compliance with the Executive Regulation of Federal Decree-Law No. 28 of 2022 and the recent Cabinet Decision No. 17 of 2026. Whether you are a business owner, a legal representative, or a tax professional, staying ahead of these changes is critical.
The standard retention period remains 5 years for taxable persons and 7 years for real estate records. However, the 2026 amendments introduce several specific extensions:
Ongoing Audits/Disputes: Records must be kept for an additional 4 years or until the dispute is finally settled.
Voluntary Disclosures: If a disclosure is made in the 5th year, records must be kept for an additional 1 year from the submission date.
Refund Applications: If a refund decision is pending, records must be kept for an additional 2 years.
The rules for correcting errors in tax returns or assessments now strictly depend on the amount involved:
Over 10,000 AED: You must submit a Voluntary Disclosure within 20 business days of discovering the error.
10,000 AED or Less: You may correct the error in the current or next tax return, provided you are still obligated to file one. If not, a Voluntary Disclosure is still required.
The FTA is increasing transparency regarding audit results. Taxable persons can now formally request access to the documents, data, and information the Authority used to base its assessment within 20 business days of receiving the audit results.
To ensure the integrity of the tax system, Tax Agents must meet rigorous criteria:
Natural persons require specific educational degrees (Tax, Accounting, or Law) and between 3 to 5 years of recent experience.
They must hold valid professional indemnity insurance.
Registration is valid for 3 years for natural persons and 1 year for juridical persons.
The regulations provide a path for reconciliation even after criminal cases are initiated, though at a cost. Settling full payable taxes and penalties, plus additional percentages (up to 75% of the evaded tax after a conviction), may allow for reconciliation.
In the evolving GCC tax landscape, businesses must remain vigilant regarding the accuracy of their refund applications, as any refund claimed in excess whether due to over-recovered input tax or calculation errors requires immediate rectification through a formal Voluntary Disclosure (VD).
If the error impact exceeds the established regulatory threshold (such as AED 10,000 in the UAE), it cannot be adjusted in a subsequent return and must instead be disclosed via the tax portal within 20 business days of discovery. Proactively filing a VD is a critical compliance step that not only corrects the tax record but also serves as the primary mechanism to mitigate the risk of heavy administrative penalties that typically arise during a formal tax audit.
In response to current regional logistical circumstances, Dubai Customs has introduced a temporary “Green Corridor” measure to safeguard trade flows.
Effective March 8, 2026, cargo destined for Jebel Ali Port or Dubai Free Zones may now be discharged at the ports of Khorfakkan or Fujairah and transported via road under secure bonded movement.
Businesses can bypass regular customs clearance at the initial port of entry. Final import declarations and duty payments are instead completed at the Jebel Ali Customs center.
Ensure your Bill of Lading explicitly lists Jebel Ali as the destination. Coordination with DP World and shipping agents is required to manage manifests through the Dubai Trade platform.
1st January 2026 – KSA deemed supplier VAT rules effective
8th March 2026 – UAE “Green Corridor” logistics measure introduced
2026 (Phased) – Oman e-invoicing rollout begins
30th June 2026 – KSA tax amnesty deadline
The tax amnesty initiative has been extended until 30 June 2026, offering businesses additional time to regularize their tax positions and mitigate potential penalties.
The Zakat, Tax and Customs Authority (ZATCA) has introduced deemed supplier rules applicable to electronic marketplaces, which are now effective from 1 January 2026. Under these rules, certain online platforms are treated as the supplier for VAT purposes and are required to charge, collect, and remit VAT on transactions facilitated through their systems. The measure is aimed at strengthening VAT compliance in the digital economy and ensuring consistent tax treatment of platform-based transactions.
The Oman Tax Authority (OTA) has introduced a nationwide e invoicing system to move businesses away from paper and PDF files toward fully electronic invoices. Oman continues its implementation of the Peppol-based e-invoicing system, with the Tax Authority progressing towards phased mandatory adoption for businesses in 2026. Large VAT-registered taxpayers are expected to be part of the initial rollout, with broader application planned subsequently.
The National Bureau for Revenue (NBR) recently released a series of updated VAT guides between January and March 2026. These revisions are designed to provide greater technical clarity across several complex sectors.
Manpower & Staffing Services: The NBR has clarified the distinction between payroll and service fees. While basic employee salaries remain outside the scope of VAT, any staffing or manpower services provided through an agency are subject to VAT on the full consideration charged (the total invoice value).
Outsourcing Arrangements: New refinements help taxpayers distinguish between standard service contracts (where a specific outcome is delivered) and manpower-type supplies (where personnel are provided). This distinction is critical for determining the correct VAT treatment and place of supply rules.
Real Estate & Lease Incentives: The guidance on exempt leasing has been expanded to address modern commercial incentives. It provides a clear framework for treating: Rent-free periods and rent reductions. Fit-out contributions provided by landlords to tenants.
Import-Related Deposits: The updated Imports and Exports Guide now specifically addresses the treatment of VAT deposits paid during the importation process. It clarifies the formal procedures for the recovery and adjustment of these deposits against final VAT liabilities once customs documentation is finalized.
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