Abu Dhabi has launched its first test flight for a cutting-edge drone parcel delivery service, marking a significant step forward in efforts to modernise the emirate's transport network and boost efficiency.
The test journey over Khalifa City, announced on Wednesday, involved a drone taking a package from a local post office to a designated drop zone using a secure winch-based delivery system.
Such autonomous transport methods aim to reduce costs and cut delivery times, allowing providers to reach more customers by swapping the roads for the skies.
The trial was completed under a partnership between Abu Dhabi Investment Office (Adio), aviation technology company LODD, and 7X, an investment holding group which includes Emirates Post and express delivery provider EMX.
Omran Malek, head of the Smart and Autonomous Vehicles Industry at Adio, said: “Adio is proud to champion the development and roll-out of cutting-edge logistics technologies that strengthen Abu Dhabi’s position as a global innovation hub.
“This pilot is a powerful example of the kind of local partnerships and forward-thinking strategies that drive long-term economic and infrastructure value for the emirate.”
The scheme came under the strategy of the Smart and Autonomous Systems Council to harness advanced technology to improve logistics networks and promote smart mobility, with the support of the General Civil Aviation Authority and the Integrated Transport Centre.
Work continues to put regulations in place to support the wider commercial use of autonomous air transport services.
“Ensuring the safety and security of our airspace remains a top priority for the Integrated Transport Centre,” said Humaid Saber Al Hameli, director of the Aviation Transport Division at the Integrated Transport Centre.
“We continue to advance the regulatory frameworks necessary to support the safe and effective integration of unmanned aerial systems into Abu Dhabi’s wider transport ecosystem.”
Rashid Al Manai, chief executive of LODD, said using drones allows an operator to carry out several deliveries simultaneously.
Transport plans take flight
In December, Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, Deputy Prime Minister and Minister of Defence, launched a drone delivery service in the emirate.
Keeta Drone, a subsidiary of Chinese technology and retail company Meituan, has been awarded a licence by the Dubai Civil Aviation Authority (DCAA) to deliver food and medicine across Dubai Silicon Oasis (DSO) during the first phase of the project.
Sheikh Hamdan became the first person to make an order through the platform from the Rochester Institute of Technology-Dubai, one of the landing points within DSO’s drone delivery network.
The drones have a height ceiling of 100 metres and a range of 3km, with a top speed of 22 metres per second. “The future of robotic technologies and self-driving systems for retail services, and knowledge-based economic applications, innovation, digital transformation and the use of artificial intelligence have all become a reality in Dubai,” said Sheikh Hamdan at the time.
The sky is the limit
The UAE is pressing ahead with ambitious transport plans, including drones, driverless taxis and air taxis.
Test flights for self-flying air taxis were held in the UAE capital this month, in what was hailed by Abu Dhabi Media Office as a “pivotal step towards integrating urban air mobility into everyday life”.
The flights were organised by the Smart and Autonomous Systems Council and ADIO, in collaboration with Chinese drone manufacturer EHang and FinTech group Multi Level Group.
In March, US air taxi company Archer Aviation said it was working towards launching a fleet of flying taxis before the end of the year, viewing the Gulf as the perfect launch pad to demonstrate its vehicles to the rest of the world.
Abu Dhabi Aviation confirmed at the time that an agreement was made to introduce the first fleet of Archer's Midnight electric vertical take-off and landing aircraft this year.
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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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