Abu Dhabi gives manufacturers a boost with smart initiative

Manufacturers of electronics, food and pharmaceutical products in Abu Dhabi are getting a technology push under a new initiative from the Abu Dhabi Department of Economic Development, which has introduced the 'Smart Manufacturing Project' to boost productivity.

The project is expected to open up more financing opportunities from local banks and banks specialised in industrial financing, said Rashed Al Balooshi, the department's undersecretary.

The aim is to encourage new financing solutions to fund the transformation of factories to become more automated, safer and more efficient through technology.

The project comes a week after the UAE Ministry of Industry and Advanced Technology announced Industry 4.0, an initiative to accelerate the digital capabilities of thousands of local manufacturers through partnerships with a dozen multinationals including Adnoc, Siemens and Microsoft. The aim is to boost manufacturing by 30 per cent and add Dh25 billion ($6.8bn) to the economy by 2031.

“This initiative is a first of its kind in the Middle East and is a cornerstone of the Projects of the 50,” Sarah Al Amiri, Minister of State for Advanced Sciences, said at the launch of the programme.

The Projects of the 50 and the related Principles of the 50 are part of the government's plan to ensure the UAE economy remains dynamic and robust over the next half-century.

Harnessing the potential of automation, additive manufacturing and blockchain, among other technologies, will help to lower the carbon footprint of UAE industry, allow small-and medium-sized companies to become “more innovative and inventive” and give UAE consumers a wider array of available products and services, Ms Al Amiri said.

Abu Dhabi's Industrial Development Bureau is overseeing the Smart Manufacturing Project.

Mohammed Al Mansouri, executive director of the IDB, said that industrial entities can register a request to join the project until February 2022.

Requests will be subject to technical assessment by the IDB. He added that the first phase of the project will focus on small- and medium-sized enterprises, with between 10 and 250 employees.

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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

How to wear a kandura

Dos

Wear the right fabric for the right season and occasion
Always ask for the dress code if you don’t know
Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
Wear 100 per cent cotton under the kandura as most fabrics are polyester

Don’ts

Wear hamdania for work, always wear a ghutra and agal
Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying

Fourth Arab Economic and Social Development Summit

As he spoke, Mr Aboul Gheit repeatedly referred to the need to tackle issues affecting the welfare of people across the region both in terms of preventing conflict and in pushing development.
Lebanon is scheduled to host the fourth Arab Economic and Social Development Summit in January that will see regional leaders gather to tackle the challenges facing the Middle East. The last such summit was held in 2013. Assistant Secretary-General Hossam Zaki told The National that the Beirut Summit “will be an opportunity for Arab leaders to discuss solely economic and social issues, the conference will not focus on political concerns such as Palestine, Syria or Libya". He added that its slogan will be “the individual is at the heart of development”, adding that it will focus on all elements of human capital.