1. The following categories of expenditure shall be deemed Qualifying Research and Development Expenditure, where incurred by a Qualifying Entity during the relevant Tax Period or the Fiscal Year in relation to the Qualifying Research and Development Activities: a. Employee costs. b. Costs of consumable materials. c. Subcontracting fees. d. Contribution shares under cost contribution arrangements in accordance with Arm’s Length Principle. e. Any other categories of expenditure as may be specified in a resolution issued by the Minister. f. Any other costs set forth in paragraphs (a) to (e) of this Clause that are capitalized in accordance with applicable accounting standards, and relate to internally developed intangible assets derived from Qualifying Research and Development Activities. 2. The Minister shall issue a resolution specifying the definitions of the terms referred to in Clause (1) of this Article, as well as any other relevant rules and conditions, including any increase in employee costs. 3. Qualifying Research and Development Expenditure shall be eligible for claiming the Research and Development Tax Credit only if all of the following conditions are satisfied: a. The expenditure is incurred wholly and exclusively by a Qualifying Entity for the purpose of carrying out Qualifying Research and Development Activities. Where the expenditure is incurred for multiple purposes, only the identifiable portion or percentage that is incurred wholly and exclusively for carrying out Qualifying Research and Development Activities shall be taken into account. b. Its value is not less than five hundred thousand dirhams (500,000) per Research and Development Project during the relevant Tax Period or Fiscal Year, excluding any increase in employee costs as may be specified in a resolution issued by the Minister. c. It constitutes Deductible Expenditure, except as provided in paragraph (F) of Clause (1) of this Article. d. It does not include any portion or percentage directly or indirectly funded by a Grant, to the extent that such expenditure is recorded in the financial statements of the Qualifying Entity. e. It is not subject to any incentive, credit, exemption, or other relief under Corporate Tax Law or any other legislation in the State.
Interpretation and application must be checked against the official text and current version.