The UAE Ministry of Finance has opened a public consultation on the proposed introduction of tax incentives for research and development. The deadline for submitting comments is 14 May 2024.

Objective of the consultation

The UAE Government recognizes the importance of the wider benefits created by Research and Development (R&D) in driving innovation and growing its knowledge base as part of creating a vibrant and diverse economy. The UAE Government is therefore considering possible mechanisms to achieve this objective and a support system with a broad reach across the economy through a potential R&D Tax Incentive under the Corporate Tax Law.

The Ministry of Finance is seeking inputs from stakeholders into the design process of the potential R&D Tax Incentive and the comments will help the UAE government develop the final design of the potential R&D Tax Incentive.

This consultation paper is split into the following documents and sections:

Consultation questionnaire

This includes a range of questions to understand more about the way in which R&D is currently and/or anticipated to be conducted in your business, what the potential R&D Tax Incentive should cover, and how the potential R&D Tax Incentive should be delivered and administered.  The consultation questionnaire can be found here.

Guidance Paper

Alongside the consultation questionnaire, a separate Guidance Paper has been prepared which provides details on the internationally recognized definition of R&D provided in the Organisation for Economic Co-operation and Development’s (OECD) Frascati Manual. This can be found here.

The Ministry of Finance welcomes comments on this consultation by 14 May 2024 and would appreciate clear and concise comments with, where possible, examples, data, or other information to support views being put forward in the response to this consultation.