Homes sit empty in Khalifa City where the ground has swelled under the pavement and cracked the foundation.
Homes sit empty in Khalifa City where the ground has swelled under the pavement and cracked the foundation.
Homes sit empty in Khalifa City where the ground has swelled under the pavement and cracked the foundation.
Homes sit empty in Khalifa City where the ground has swelled under the pavement and cracked the foundation.

'It looks like the street was hit by an earthquake'


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  • Arabic

ABU DHABI // Mohammed al Malahi was forced to move his family out of their Khalifa City B villa two years ago, when the neighbourhood started to sink. Two villas on Street 25 in Zone 165, one of them Mr al Malahi's, were condemned and two others were severely damaged by the subsidence. The road has holes as deep as 45cm. Residents say the municipality has done nothing to fix the sinkhole. Mr al Malahi said he had asked the municipality to make repairs for several months before his villa was condemned, and while he had been compensated and given money to build a new villa on the same spot, he was afraid to do so until the problem had been fixed.

"When the ground began to give way, I contacted Abu Dhabi Municipality informing them of the situation that was threatening not only my villa, but the entire street," he said. "Gradually, over a period of several months, cracks began to appear in the walls of the villa. As a result I moved my family out to another property." Mr al Malahi said he had received Dh5 million (US$1.36m) in compensation three months after he moved out, "but I have been holding on to that money for nearly two years awaiting the sinkhole to be repaired".

Motorists driving down Street 25 have to steer their vehicles around deep pits and drive over steep inclines. Residents have marked the danger spots with cones or have inserted pieces of plywood, and even a plastic chair, into the holes to warn drivers. They have asked the municipality to repair the road and damaged sewerage pipes. Adel al Atrash, an engineer in the municipality's road maintenance department, said: "Khalifa City B as a whole is being improved. Engineers have been assigned to the project and a budget has been allocated. Works have already begun."

Mr al Atrash said he believed the improvements would include repairs to Street 25, but did not know when they would begin. Ali al Khraibi lives next door to Mr al Malahi. His villa was spared from the sinkhole but the road leading to his property and the front yard where his children used to play are severely damaged. "Municipality engineers assured me that my villa was safe to live in and that the road would be fixed. But that was two years ago and nothing has been done since," Mr al Khraibi said. "Doesn't it look like the whole street was struck by an earthquake?"

Mr al Khraibi was also paid compensation, but a lesser amount that he declined to divulge. "I was paid enough compensation to repair the walls bordering the property and to resurface the front yard since my villa is not damaged, but I won't do it because the sinkhole is still growing wider and deeper," he said. "There would be no point in spending the money to carry out the repairs if everything is still sinking."

Another of Mr al Malahi's neighbours, Mubarak al Masadi, has had to prop up a side wall on the edge of his property with wood. Mr al Masadi said he received Dh580,000 from the municipality in compensation two years ago, and had spent Dh400,000 to repair the wall twice, only to see it collapse again. "Over the past two years I have had the land filled in and repaired the wall to a perfect state, twice," he said. "Each time, within a matter of a few weeks, new cracks begin to appear and it begins to collapse. I have given up completely until the municipality solves the problem."

A fourth villa on the same street was only half built when it began collapsing. The upper floors have caved in and the owner has not tried to repair it. Mr al Malahi said it had stood abandoned for two years, an eyesore and a testament to the damage the sinkhole could cause. "Abu Dhabi Municipality has forgotten about us," Mr al Malahi said. "I urge them to come in and fix the street and the sinkhole for once and for all, so that my neighbours and myself can move on with our lives and forget this problem that has plagued us for the past two years."

ealghalib@thenational.ae

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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May 2017

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September 2021

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