UAE R&D Tax Credit: Pre-Approval Moves to TAWWER

Created By : Yeeshu Sehgal | UAE Tax Lead

What's changed

The R&D tax credit has been law since March, but until recently there wasn't a proper way to apply for it. That has now been sorted. The Emirates Research and Development Council (ERDC) has launched TAWWER, an online platform where companies put their R&D projects forward for pre-approval. You can't claim anything without that approval, so TAWWER is where every claim now begins.

The rules themselves came from Cabinet Decision No. 215 of 2025 and Ministerial Decision No. 24 of 2026. For most of this year, advisers have been pointing to an awkward gap: the credit covered 2026 tax periods, yet the Council's portal wasn't open. TAWWER closes it. It also hints at how the Council plans to work. It has been hiring people with science and engineering backgrounds to review applications, and it intends to look at budgets as well as the technical story.

How the credit works

It applies to tax periods starting on or after 1 January 2026. UAE companies, Free Zone Persons and foreign companies with a UAE permanent establishment can all use it, as long as they actually pay Corporate Tax or Top-up Tax. If you've elected Small Business Relief, you're out. A Free Zone company paying 0% on everything won't get much from it either, since there's nothing for the credit to reduce.

The rate goes up in steps, and each step has its own staffing test, measured as an average across the year:

Spending above AED 5 million does not earn any extra credit. So the most a company or tax group can get in one tax period is AED 2 million.

There are a few other rules to keep in mind. Each project must spend at least AED 500,000 in the period, counted before the 30% extra allowed on staff costs. Staff costs, materials, UAE subcontractors and some shared-cost arrangements count. Costs paid by a government grant, or charged by another company in the same group, do not count. The credit is not paid out in cash. It first reduces Corporate Tax, and then any Top-up Tax. Any credit left over can be used in later years, as long as at least half of the ownership stays the same. If ownership changes by more than half, the business must still be doing much the same work. Finally, if a company stops meeting the conditions, credits it has already used can be taken back, and some of these rules apply for five years.

An example helps. Take a software firm that puts AED 1.5 million into an approved project and keeps around six people on R&D through the year. The first million earns 15%, so AED 150,000. The extra half million earns 35%, which is AED 175,000. Add them up and the tax payable drops by AED 325,000.

Is it really R&D?

Honestly, I think this is where a lot of companies will get it wrong. A new app, an ERP rollout or a product launch isn't R&D just because it involved technology. What the rules want is work done here in the UAE that's new, that tackles a real scientific or technical unknown, and that's done in a structured way. The simplest check I know: at the start, what couldn't your team do yet? And what did they try in order to figure it out?

If the honest answer is "nothing really, we used what we already knew," it probably won't qualify, no matter how hard or pricey it was. Same goes for routine testing, cosmetic changes and market research.

It also helps to think about who will read your application. The reviewers will come from technical fields and will ask technical questions. They'll want to know what problem you were trying to crack, how you went about it, who worked on it and how you built the budget. A product roadmap or pitch deck won't answer any of that.

How AKM Global can help

Working out the credit is easy. The hard part is knowing which projects will pass review, and having the right records ready. AKM Global can help at each step:

• Find the right projects: We look across your business, including product, data and operations teams, not just engineering. We check each project against the R&D test and tell you clearly whether it is worth claiming.
• Check the numbers: We confirm that each project spends at least AED 500,000 and see which credit rate your R&D staff numbers allow. If you use Small Business Relief, we compare both options so you can pick the better one.
• Apply on TAWWER: We help you prepare and submit the application, including the technical description, the budget and the supporting documents.
• Keep good records: We help you track staff time, materials and subcontractor costs for each project during the year, so you are not rushing at year-end.
• Claim the credit: We include the credit in your Corporate Tax return, check how it works with Top-up Tax for larger groups, and watch for carry-forward and claw-back issues in later years.

If your company spends money on innovation in the UAE, now is a good time to start. You can read about the programme at tawwer.gov.ae/tax-credit-programme. The AKM Global UAE tax team is happy to review your projects.