Hamad Al Kaabi, the UAE's permanent representative to the International Atomic Energy Agency, with Tom Ashby, the business editor of The National, at a forum on nuclear energy, organised by The National in Dubai yesterday. Silvia Razgova / The National
Hamad Al Kaabi, the UAE's permanent representative to the International Atomic Energy Agency, with Tom Ashby, the business editor of The National, at a forum on nuclear energy, organised by The National in Dubai yesterday. Silvia Razgova / The National
Hamad Al Kaabi, the UAE's permanent representative to the International Atomic Energy Agency, with Tom Ashby, the business editor of The National, at a forum on nuclear energy, organised by The National in Dubai yesterday. Silvia Razgova / The National
Hamad Al Kaabi, the UAE's permanent representative to the International Atomic Energy Agency, with Tom Ashby, the business editor of The National, at a forum on nuclear energy, organised by The Nation

Nuclear safety policy in Emirates brought into sharp focus


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The Fukushima disaster and a recent cover-up at a nuclear plant in South Korea could have cast a shadow over the UAE's nuclear energy programme.

Instead, both incidents are giving Abu Dhabi a chance to bolster safety standards and guard against surprise occurrences - black swan events - five years before its first reactor is scheduled to go online.

"That's the thing about nuclear safety," said Hamad Al Kaabi, the UAE's permanent representative to the International Atomic Energy Agency, the United Nations atomic watchdog. "It's something that's always being improved and developed."

Safety has long been a watchword in the nuclear industry, and it has become even more important since the nuclear emergency in Japan last year and the incident in South Korea.

The UAE's programme - which is putting tremendous capital and manpower into building the Arab world's first nuclear plant - stands in contrast to that of nations such as Germany and Italy, which have abandoned their nuclear plans or are accelerating the decommissioning of nuclear plants. Abu Dhabi's desire to press ahead with its programme is more comparable to nations such as India and China, where pressing energy needs are driving plans to build new capacity as quickly as possible.

Only five years ago, the Emirates announced through a landmark policy paper its plans to develop atomic power.

Today, multiple new institutions are working in concert, thousands of foreigners have moved in to the remote coastal site selected for the reactors, and concrete for the first reactor building is scheduled to be poured in July, pending regulatory approval. By 2020, four reactors purchased from a South Korean consortium for US$20.4 billion (Dh74.86bn) are expected to be producing as much as a quarter of Abu Dhabi's power.

At the programme's beginning, Abu Dhabi's desire to join the elite group of powers producing nuclear energy was part of a global renaissance in the nuclear industry a quarter century after the explosion at Ukraine's Chernobyl plant.

That renaissance is now under question in some established nuclear nations, although not in emerging economies. On March 11 last year, an undersea earthquake generated a tsunami that crippled Japan's Fukushima Dai-ichi plant, releasing radiation and raising public concerns worldwide about the safety of a technology that nuclear advocates promote as a clean alternative to polluting fossil fuels.

"There are some additional safety measures that could be implemented to address the discussion internationally on these issues," said Mr Al Kaabi. "These are really not major design changes."

This year, power to the cooling systems at Korea's oldest reactor failed during a routine form of shutdown. The operating company, Korea Hydro & Nuclear Power (KHNP), was able to restore power after 12 minutes but failed to report the accident and, according to an investigation, destroyed some records, raising red flags about safety culture and transparency.

South Korea is the UAE's chosen partner in its nuclear programme.The operator of Kori 1, the reactor that suffered the cooling system malfunction, is to operate the UAE's plant with Emirates Nuclear Energy Corporation.

This week, it emerged that an emergency diesel generator at another South Korean plant had malfunctioned and that the incident had not been immediately reported by KHNP, the operator. Kim Jong-shin, the company's chief executive, resigned on Tuesday.

"With any incident of that nature, of course there is more awareness of the importance of the culture of safety," said Mr Al Kaabi. "Our policy from the very beginning stated that the UAE will be committed to the high standards of safety - the high standard of safety not only to adopt the safest design, safest plant, but also to focus on developing a culture of safety among workers, among entities, among all the relevant stakeholders."

The UAE has been in consultation with South Korea on the matter, he said.

"The unique thing about the nuclear industry is that culture of safety is for much higher standards than other industries in general," said Mr Al Kaabi. "Even if it's a very, very low risk, you still have to assume that it will happen and [anticipate] how the plant will react to that."

Other nations in the region have also laid out plans to develop nuclear power. Jordan, which relies on imports for more than 90 per cent of its energy, has put out a tender for one reactor, although financing is expected to be more difficult. Saudi officials have said the kingdom might build as many as 16 reactors but have not laid out a formal plan.

"The UAE is unique in terms of the approach it's taken, but also that's it's a newcomer to nuclear energy that is actually making real, complete progress on the programme," said Mr Al Kaabi.

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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

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