• A rendering of a train to be used on the UAE’s new passenger rail service. All Photos: Etihad Rail
    A rendering of a train to be used on the UAE’s new passenger rail service. All Photos: Etihad Rail
  • Passenger cabins are spacious, allowing people to travel in comfort.
    Passenger cabins are spacious, allowing people to travel in comfort.
  • The commercial benefits of moving cargo meant the initial focus was on freight.
    The commercial benefits of moving cargo meant the initial focus was on freight.
  • Now the focus has turned to the passenger network.
    Now the focus has turned to the passenger network.
  • The service will offer a reliable, safe, efficient, comfortable and environmentally friendly way to travel across the region.
    The service will offer a reliable, safe, efficient, comfortable and environmentally friendly way to travel across the region.
  • Etihad Rail is working closely with the Federal Transport Authority and transport authorities throughout the country to develop existing networks to improve passenger connections.
    Etihad Rail is working closely with the Federal Transport Authority and transport authorities throughout the country to develop existing networks to improve passenger connections.
  • Eventually, population centres across the UAE will be connected to neighbouring GCC countries.
    Eventually, population centres across the UAE will be connected to neighbouring GCC countries.
  • Passenger carriages will feature sleek, well-equipped cabins.
    Passenger carriages will feature sleek, well-equipped cabins.
  • Work on Etihad Rail began in 2009.
    Work on Etihad Rail began in 2009.
  • Greenhouse gases will be slashed by more than 2.2 million tonnes a year once the network is fully operational.
    Greenhouse gases will be slashed by more than 2.2 million tonnes a year once the network is fully operational.
  • The new passenger rail service is expected to significantly reduce road congestion and the number of traffic accidents.
    The new passenger rail service is expected to significantly reduce road congestion and the number of traffic accidents.

Business

Banking

Etihad Rail signs $542m financing deal with FAB for passenger services

The passenger train project will add an estimated Dh200bn to the UAE's economy

Aarti Nagraj
Aarti Nagraj

February 24, 2022

  • English
  • Arabic

Etihad Rail signed a Dh1.99 billion ($541.8 million) deal with First Abu Dhabi Bank on Thursday to finance passenger railway transport services.

The agreement is part of the UAE National Railways programme, the largest land transport system in the country.

FAB will be the certified lead arranger for the loan, as part of the agreement, said Abu Dhabi Media Office.

“Through this agreement with First Abu Dhabi Bank, we at Etihad Rail look forward to enhancing co-operation, uniting efforts and working together towards realising the vision of the UAE in accordance with the goals of the UAE National Railways programme, which was launched under the Projects of the 50 to establish the basis for a new stage of sustainable economic growth for the country,” said Sheikh Theyab bin Mohamed, chairman of the Abu Dhabi Crown Prince’s Court and chairman of Etihad Rail.

Etihad Rail said in December that it will expand its operations from heavy goods services to include passenger train services as well by 2030.

The project will add an estimated Dh200bn to the economy and will allow “passengers to travel from Abu Dhabi to Dubai in 50 minutes, and from Abu Dhabi to Fujairah in 100 minutes”, said Etihad Rail.

Connecting 11 cities and regions across the UAE, from Al Sila in the west to Fujairah in the north, the project is expected to carry more than 36.5 million passengers a year by 2030.

The passenger trains will travel at speeds up to 200 kilometres per hour and can carry up to 400 people.

Last month, The National was given exclusive access to the first images of what the UAE’s new passenger trains will look like.

Artist's impressions show silver and grey carriages emblazoned with the red Etihad Rail logo set against the backdrop of the UAE’s cities, mountains and deserts.

The UAE has yet to announce when the trains will begin operations.

Etihad Rail's passenger service extension is one of the three strategic projects of the National Railways programme, which was launched by the UAE government in December 2021.

“Through this agreement, we will move full steam ahead with our mission to provide passenger railway services, which will bolster the public transport system in the UAE and the wider region,” said Shadi Malak, chief executive of Etihad Rail.

“Etihad Rail is an essential component of the Gulf Co-operation Council rail network, and this agreement brings us one step closer towards realising our strategic goals of strengthening the UAE’s reputation as a regional and global transport hub.”

Etihad Rail is currently completing stage two of the UAE National Rail Network, with the first stage operational since 2016.

The project is “progressing at an accelerated pace”, with 70 per cent completed in less than 24 months, despite the challenges of the pandemic, the Abu Dhabi Media Office said.

“By connecting the UAE through a fully integrated rail network, Etihad Rail will bring significant economic and social benefits to the businesses and communities it serves, empowering future growth and providing opportunities for all,” said FAB group chief executive Hana Al Rostamani.

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

Updated: February 24, 2022, 10:46 AM
Etihad RailTransportUAEBanking