$3 billion UAE-Oman rail network to create jobs and boost economy, officials say

A $3 billion project to build a railway link between the UAE and Oman will create job opportunities and bolster ties between the Gulf neighbours, officials have said.

Oman and Etihad Rail Company, a joint venture between Oman Rail and Etihad Rail, is overseeing the large-scale transport scheme.

Trains that can reach speeds of 200kph will connect Abu Dhabi with Sohar to the north of Muscat.

An agreement was signed last month with Mubadala, Abu Dhabi's sovereign investor, for the development of the 303km route.

The board of directors of Oman-Etihad Rail Company underlined the significance of the ambitious plans during their latest meeting in Muscat.

The meeting was attended by Suhail Al Mazrouei, UAE Minister of Energy and Infrastructure and Chairman of Oman and Etihad Rail Company, and Saeed Al Maawali, Oman's Minister of Transport, Communications and Information Technology, and Vice Chairman of the Oman and Etihad Rail board.

Members of the board praised the initiative as a "new milestone in the relationship between the two countries", the Abu Dhabi Media Office said on Friday.

"The project aims to facilitate passenger and freight movement, create rewarding job opportunities for professionals in both countries, and foster sustainable development and stronger ties through the development and operation of a safe, secure, and efficient railway network connecting the Sultanate of Oman and the UAE," it said.

Rail scheme on track

Board members were updated on the progress of the joint network, as well as the results of engineering design reviews and system studies.

The studies were conducted in order to ensure the network was able to operate in the Middle East climate, which typically experiences higher temperatures than many parts of the world.

The board also discussed ways to integrated the latest technologies and best international practices to allow for the smooth running of the rail line.

What we know about key rail project

The transport link, first announced in September, is aimed at bolstering trade and tourism opportunities between the UE and Oman and the rest of the region.

It is not yet clear when the rail project will be completed.

The regional rail line will serve both passenger and freight trains when up and running.

Passenger services will operate at up to 200kph, with freight trains reaching 120kph.

It will reduce journey times between Abu Dhabi and Sohar, to the north of Muscat, to 100 minutes, and trips from Sohar to Al Ain to 47 minutes.

Plans include connecting the UAE's existing freight services line to Sohar, the sultanate's deep-sea port.

Tales of Yusuf Tadros

Adel Esmat (translated by Mandy McClure)

Hoopoe

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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