A Soyuz rocket lifts off from the Baikonur Cosmodrome, a Russian spaceport in Kazakhstan. AP
A Soyuz rocket lifts off from the Baikonur Cosmodrome, a Russian spaceport in Kazakhstan. AP
A Soyuz rocket lifts off from the Baikonur Cosmodrome, a Russian spaceport in Kazakhstan. AP
A Soyuz rocket lifts off from the Baikonur Cosmodrome, a Russian spaceport in Kazakhstan. AP

Russia risks being left out in the cold as International Space Station exit looms, experts say


Sarwat Nasir
  • English
  • Arabic

Russia is preparing to leave the International Space Station (ISS) at the end of this decade but faces major hurdles in building its own replacement, the Russian Orbital Service Station (ROSS).

With sanctions restricting access to key space technologies, a shrinking space budget and growing delays in rocket and satellite development, experts say Russia’s ambitions for an independent space station may not materialise as planned. Despite publicly announced plans to launch ROSS's first module by 2027, analysts warn that the project is already facing technical and financial challenges, with little certainty over whether Russia can maintain its role as a leading space power.

“Russia's ability to develop its own orbital station is questionable,” Dr Pavel Luzin, a Russian political analyst and visiting scholar at The Fletcher School of Law and Diplomacy, told The National. “What we know is that there is one orbital module under construction since the early 2010s, the Scientific and Energy Module, and this module needs to be redesigned because at the beginning it was aimed for the ISS, not for a standalone mission.”

Russia joined forces with the US, Europe, Japan and Canada in 1998 to build the ISS, marking one of the most successful examples of post-Cold War collaboration. As geopolitical divisions deepen, however, Russia is looking for space partners outside the West, particularly China and other non-aligned nations.

  • Russia announced plans to leave the International Space Station after 2024 and build an independent one. Reuters
    Russia announced plans to leave the International Space Station after 2024 and build an independent one. Reuters
  • A Russian Soyuz 2.1a rocket booster at the Baikonur Cosmodrome spaceport, in an area of southern Kazakhstan leased to Russia. Reuters
    A Russian Soyuz 2.1a rocket booster at the Baikonur Cosmodrome spaceport, in an area of southern Kazakhstan leased to Russia. Reuters
  • A Soyuz-2.1a is readied for launch. Nasa has announced that it will resume flights to the International Space Station with Russia.
    A Soyuz-2.1a is readied for launch. Nasa has announced that it will resume flights to the International Space Station with Russia.
  • This is taking place despite Washington's attempts to isolate Russia over its invasion of Ukraine. AFP
    This is taking place despite Washington's attempts to isolate Russia over its invasion of Ukraine. AFP
  • Nasa's announcement came hours Dmitry Rogozin was dismissed as head of Russia's Roscosmos space agency. AFP
    Nasa's announcement came hours Dmitry Rogozin was dismissed as head of Russia's Roscosmos space agency. AFP
  • A vocal backer of Russia's invasion, Mr Rogozin, had said US astronauts should get to the ISS 'on trampolines' rather than Russian rockets. AFP
    A vocal backer of Russia's invasion, Mr Rogozin, had said US astronauts should get to the ISS 'on trampolines' rather than Russian rockets. AFP
  • Earlier this month, Russia's former Deputy Prime Minister Yuri Borisov was appointed as the new director-general of Roscosmos. AP
    Earlier this month, Russia's former Deputy Prime Minister Yuri Borisov was appointed as the new director-general of Roscosmos. AP
  • A Russian rocket to the ISS launched since the invasion bore the inscription Donbas and its nose cone and had the flags of breakaway enclaves painted on it. AP
    A Russian rocket to the ISS launched since the invasion bore the inscription Donbas and its nose cone and had the flags of breakaway enclaves painted on it. AP
  • The Soyuz rocket blasts off from the Baikonur Cosmodrome. The last Nasa astronaut to take a Soyuz to the ISS was Mark Vande Hei in 2021. AP
    The Soyuz rocket blasts off from the Baikonur Cosmodrome. The last Nasa astronaut to take a Soyuz to the ISS was Mark Vande Hei in 2021. AP
  • Nasa said the ISS was always designed to be operated jointly. Reuters
    Nasa said the ISS was always designed to be operated jointly. Reuters
  • The space agencies of the US, Russia, Europe, Japan and Canada participate. Reuters
    The space agencies of the US, Russia, Europe, Japan and Canada participate. Reuters
  • US astronaut Mark Vande Hei has a spectacular view of Earth from inside the ISS. AP
    US astronaut Mark Vande Hei has a spectacular view of Earth from inside the ISS. AP
  • Nasa astronaut Mark Vande Hei of Nasa, left, returns from the ISS with cosmonauts Anton Shkaplerov, centre, and Pyotr Dubrov. EPA
    Nasa astronaut Mark Vande Hei of Nasa, left, returns from the ISS with cosmonauts Anton Shkaplerov, centre, and Pyotr Dubrov. EPA
  • Their Russian Soyuz MS-19 space capsule lands south-east of the town of Zhezkazgan in Kazakhstan. AP
    Their Russian Soyuz MS-19 space capsule lands south-east of the town of Zhezkazgan in Kazakhstan. AP
  • A Soyuz MS-21 spacecraft carrying Russian cosmonauts Oleg Artemyev, Denis Matveev and Sergey Korsakov approaches to dock with the ISS. Reuters
    A Soyuz MS-21 spacecraft carrying Russian cosmonauts Oleg Artemyev, Denis Matveev and Sergey Korsakov approaches to dock with the ISS. Reuters
  • A spectacular night-time Soyuz launch. AFP
    A spectacular night-time Soyuz launch. AFP

Challenges on the horizon

But the development of ROSS comes as Russia’s space industry struggles with severe workforce shortages, ageing infrastructure and geopolitical isolation. “Actually, Russia is trying to keep its manned and military programme at any cost, but the space industry of Russia is not doing well. The number of engineers is decreasing, and the number of well-qualified engineers is decreasing even faster,” said Dr Luzin.

Sanctions imposed by the US, UK, Canada and other allied nations after Russia’s invasion of Ukraine in 2022 have crippled its ability to source advanced space technologies, particularly in satellite manufacturing.

“The sanctions have damaged Russia's space capabilities significantly,” said Dr Luzin. “Russia almost lost the ability to develop advanced satellites. All the big satellites orbited in 2022-2024 and planned for orbiting in 2025 are made with Western components imported before 2022 and sometimes before 2014.”

Scepticism over space plans

Sahith Madara, an aerospace engineer and founder of the advisory firm Bumi and Space, based in Paris, echoed Mr Luzin’s thoughts on how realistic a goal the project is. “ROSS seems like a tough bet given Russia’s shrinking space budget. With funding around $2 billion a year – way behind Nasa or China – it’s hard to see how they’ll fully finance and build an independent station on schedule,” he told The National.

“Sanctions and supply chain issues aren’t helping either, making things even more complicated. Delays feel almost inevitable. Russia has a history of slipping timelines (just look at the Angara rocket or the Luna-25 mission), and a project as big as ROSS is no exception. They’re aiming for 2027, but without major outside funding, maybe from China or other allies, it could easily drag into the 2030s.”

Military space ambitions take priority

To compensate, Moscow is increasingly prioritising military space activities, strengthening ties with China and other non-Western partners as it moves away from international co-operation in civilian space flight. “The plan for the Russian Orbital Service Station is ambitious, but at the same time, their military space ambitions are picking up speed,” said Mr Madara.

A Russian Soyuz spacecraft docked to the International Space Station. Reuters / Roscosmos
A Russian Soyuz spacecraft docked to the International Space Station. Reuters / Roscosmos

Since 2022, Russia has launched satellites with clear defence applications, including reconnaissance, electronic warfare and early warning systems. It has also reportedly been experimenting with anti-satellite weapons: military-grade weapons designed to destroy satellites.

“Space is becoming another front in the global defence competition, and Russia isn’t sitting this one out,” said Mr Madara. “Their growing collaborations, like launching satellites for Iran, suggest they’re building alliances in space that align with their geopolitical strategy, rather than relying on Western-led initiatives."

China: Russia's new friend in space

One question that looms over Russia’s ambition to build ROSS is whether China will step in as a key partner. The two countries have strengthened their collaboration in recent years, with China offering an alternative market for Russian technology and a potential ally in lunar exploration. In 2021, China and Russia officially announced their partnership for the International Lunar Research Station (ILRS), a long-term project aimed at establishing a permanent base on the Moon.

The agreement marked one of the most significant space collaborations between the two nations. Despite this partnership, China appears to be firmly in the driver’s seat, while Russia’s role remains secondary. But despite their geopolitical alignment, experts say a partnership beyond ILRS is unlikely, especially in low-Earth orbit.

"China is hardly going to join Russia there because it has its own orbital station and own space strategy," said Dr Luzin. "Moreover, the planned parameters of the new station's orbit will make it hard to get there from other launch sites except Vostochny on Russian territory." China’s Tiangong space station is already operational, with astronauts who are currently living and working there.

Six large-scale objects on show
  • Concrete wall and windows from the now demolished Robin Hood Gardens housing estate in Poplar
  • The 17th Century Agra Colonnade, from the bathhouse of the fort of Agra in India
  • A stagecloth for The Ballet Russes that is 10m high – the largest Picasso in the world
  • Frank Lloyd Wright’s 1930s Kaufmann Office
  • A full-scale Frankfurt Kitchen designed by Margarete Schütte-Lihotzky, which transformed kitchen design in the 20th century
  • Torrijos Palace dome
GAC GS8 Specs

Engine: 2.0-litre 4cyl turbo

Power: 248hp at 5,200rpm

Torque: 400Nm at 1,750-4,000rpm

Transmission: 8-speed auto

Fuel consumption: 9.1L/100km

On sale: Now

Price: From Dh149,900

MATCH INFO

Uefa Champions League final:

Who: Real Madrid v Liverpool
Where: NSC Olimpiyskiy Stadium, Kiev, Ukraine
When: Saturday, May 26, 10.45pm (UAE)
TV: Match on BeIN Sports

The National in Davos

We are bringing you the inside story from the World Economic Forum's Annual Meeting in Davos, a gathering of hundreds of world leaders, top executives and billionaires.

Jeff Buckley: From Hallelujah To The Last Goodbye
By Dave Lory with Jim Irvin

Who's who in Yemen conflict

Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government

Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council

Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south

Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory

Fixtures

Opening day Premier League fixtures for August 9-11

August 9

Liverpool v Norwich 11pm

August 10

West Ham v Man City 3.30pm

Bournemouth v Sheffield Utd 6pm

Burnley v Southampton 6pm

C Palace v Everton 6pm

Leicester v Wolves 6pm

Watford v Brighton 6pm

Tottenham v Aston Villa 8.30pm

August 11

Newcastle v Arsenal 5pm

Man United v Chelsea 7.30pm

 

Western Clubs Champions League:

  • Friday, Sep 8 - Abu Dhabi Harlequins v Bahrain
  • Friday, Sep 15 – Kandy v Abu Dhabi Harlequins
  • Friday, Sep 22 – Kandy v Bahrain
How to get there

Emirates (www.emirates.com) flies directly to Hanoi, Vietnam, with fares starting from around Dh2,725 return, while Etihad (www.etihad.com) fares cost about Dh2,213 return with a stop. Chuong is 25 kilometres south of Hanoi.
 

Indoor cricket World Cup:
Insportz, Dubai, September 16-23

UAE fixtures:
Men

Saturday, September 16 – 1.45pm, v New Zealand
Sunday, September 17 – 10.30am, v Australia; 3.45pm, v South Africa
Monday, September 18 – 2pm, v England; 7.15pm, v India
Tuesday, September 19 – 12.15pm, v Singapore; 5.30pm, v Sri Lanka
Thursday, September 21 – 2pm v Malaysia
Friday, September 22 – 3.30pm, semi-final
Saturday, September 23 – 3pm, grand final

Women
Saturday, September 16 – 5.15pm, v Australia
Sunday, September 17 – 2pm, v South Africa; 7.15pm, v New Zealand
Monday, September 18 – 5.30pm, v England
Tuesday, September 19 – 10.30am, v New Zealand; 3.45pm, v South Africa
Thursday, September 21 – 12.15pm, v Australia
Friday, September 22 – 1.30pm, semi-final
Saturday, September 23 – 1pm, grand final

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FFP EXPLAINED

What is Financial Fair Play?
Introduced in 2011 by Uefa, European football’s governing body, it demands that clubs live within their means. Chiefly, spend within their income and not make substantial losses.

What the rules dictate? 
The second phase of its implementation limits losses to €30 million (Dh136m) over three seasons. Extra expenditure is permitted for investment in sustainable areas (youth academies, stadium development, etc). Money provided by owners is not viewed as income. Revenue from “related parties” to those owners is assessed by Uefa's “financial control body” to be sure it is a fair value, or in line with market prices.

What are the penalties? 
There are a number of punishments, including fines, a loss of prize money or having to reduce squad size for European competition – as happened to PSG in 2014. There is even the threat of a competition ban, which could in theory lead to PSG’s suspension from the Uefa Champions League.

SCORES IN BRIEF

New Zealand 153 and 56 for 1 in 22.4 overs at close
Pakistan 227
(Babar 62, Asad 43, Boult 4-54, De Grandhomme 2-30, Patel 2-64)

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

GIANT REVIEW

Starring: Amir El-Masry, Pierce Brosnan

Director: Athale

Rating: 4/5

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'Peninsula'

Stars: Gang Dong-won, Lee Jung-hyun, Lee Ra

Director: ​Yeon Sang-ho

Rating: 2/5

The specs

Engine: 2.0-litre 4cyl turbo

Power: 261hp at 5,500rpm

Torque: 405Nm at 1,750-3,500rpm

Transmission: 9-speed auto

Fuel consumption: 6.9L/100km

On sale: Now

Price: From Dh117,059

Superpower%20
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3ESean%20Penn%2C%20Aaron%20Kaufman%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E3%2F5%3C%2Fp%3E%0A
While you're here
The Bio

Hometown: Bogota, Colombia
Favourite place to relax in UAE: the desert around Al Mleiha in Sharjah or the eastern mangroves in Abu Dhabi
The one book everyone should read: 100 Years of Solitude by Gabriel Garcia Marquez. It will make your mind fly
Favourite documentary: Chasing Coral by Jeff Orlowski. It's a good reality check about one of the most valued ecosystems for humanity

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%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3EDual%20synchronous%20electric%20motors%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E1%2C108hp%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E1%2C340Nm%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3ESingle-speed%20automatic%20(front%20axle)%3B%20two-speed%20transmission%20(rear%20axle)%0D%3Cbr%3E%3Cstrong%3ETouring%20range%3A%20%3C%2Fstrong%3E488-560km%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh928%2C400%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3EOrders%20open%3C%2Fp%3E%0A
Our legal advisor

Ahmad El Sayed is Senior Associate at Charles Russell Speechlys, a law firm headquartered in London with offices in the UK, Europe, the Middle East and Hong Kong.

Experience: Commercial litigator who has assisted clients with overseas judgments before UAE courts. His specialties are cases related to banking, real estate, shareholder disputes, company liquidations and criminal matters as well as employment related litigation. 

Education: Sagesse University, Beirut, Lebanon, in 2005.

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%3Cp%3E%3Cbr%3E%3Cstrong%3EUFC%20112%3A%3C%2Fstrong%3E%20Invincible%20(April%2010%2C%202010)%3Cbr%3E%3Cbr%3E%3Cstrong%3EUFC%20Fight%20Night%3A%20%3C%2Fstrong%3ENogueira%20v%20Nelson%20(April%2011%2C%202014)%3Cbr%3E%3Cbr%3E%3Cstrong%3EUFC%20242%3A%3C%2Fstrong%3E%20Khabib%20v%20Poirier%20(September%207%2C%202019)%3Cbr%3E%3Cbr%3E%20%3Cbr%3E%3Cstrong%3EFight%20Island%201%3C%2Fstrong%3E%3Cbr%3E%3Cbr%3E%3Cstrong%3EUFC%20251%3A%3C%2Fstrong%3E%20Usman%20v%20Masvidal%20(July%2012%2C%202020)%3Cbr%3E%3Cbr%3E%3Cstrong%3EUFC%20on%20ESPN%3A%3C%2Fstrong%3E%20Kattar%20v%20Ige%20(July%2016%2C%202020)%3Cbr%3E%3Cbr%3E%3Cstrong%3EUFC%20Fight%20Night%3A%20%3C%2Fstrong%3EFigueiredo%20v%20Benavidez%202%20(July%2019%2C%202020)%3Cbr%3E%3Cbr%3EUFC%20on%20ESPN%3A%20Whittaker%20v%20Till%20(July%2026%2C%202020)%3Cbr%3E%3Cbr%3E%20%3Cbr%3E%3Cstrong%3EFight%20Island%202%3C%2Fstrong%3E%3Cbr%3E%3Cbr%3E%3Cstrong%3EUFC%20253%3A%20%3C%2Fstrong%3EAdesanya%20v%20Costa%20(September%2027%2C%202020)%3Cbr%3E%3Cbr%3E%3Cstrong%3EUFC%20on%20ESPN%3A%3C%2Fstrong%3E%20Holm%20v%20Aldana%20(October%204%2C%202020)%3Cbr%3E%3Cbr%3E%3Cstrong%3EUFC%20Fight%20Night%3A%3C%2Fstrong%3E%20Moraes%20v%20Sandhagen%20(October%2011%2C%202020)%3Cbr%3E%3Cbr%3E%3Cstrong%3EUFC%20Fight%20Night%3A%3C%2Fstrong%3E%20Ortega%20v%20Korean%20Zombie%20(October%2018%2C%202020)%3Cbr%3E%3Cbr%3E%3Cstrong%3EUFC%20254%3A%20%3C%2Fstrong%3EKhabib%20v%20Gaethje%20(October%2024%2C%202020)%3Cbr%3E%3Cbr%3E%3Cbr%3E%3Cbr%3E%3Cstrong%3EFight%20Island%203%3Cbr%3E%3Cbr%3EUFC%20on%20ABC%3A%3C%2Fstrong%3E%20Holloway%20v%20Kattar%20(January%2016%2C%202021)%3Cbr%3E%3Cbr%3E%3Cstrong%3EUFC%20on%20ESPN%3A%3C%2Fstrong%3E%20Chiesa%20v%20Magny%20(January%2020%2C%202021)%3Cbr%3E%3Cbr%3E%3Cstrong%3EUFC%20257%3A%20%3C%2Fstrong%3EPoirier%20v%20McGregor%202%20(January%2024%2C%202021)%3Cbr%3E%3Cbr%3E%20%3Cbr%3E%3Cbr%3EUFC%20267%3A%20Blachowicz%20v%20Teixeira%20(October%2030%2C%202021)%3Cbr%3E%3Cbr%3EUFC%20280%3A%20Oliveira%20v%20Makhachev%20(October%2022%2C%202022)%3C%2Fp%3E%0A
The%20specs
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MATCH INFO

Uefa Champions League semi-final, first leg

Barcelona v Liverpool, Wednesday, 11pm (UAE).

Second leg

Liverpool v Barcelona, Tuesday, May 7, 11pm

Games on BeIN Sports

Results

6.30pm: Mazrat Al Ruwayah Group Two (PA) US$55,000 (Dirt) 1,600m; Winner: Rasi, Harry Bentley (jockey), Sulaiman Al Ghunaimi (trainer).

7.05pm: Meydan Trophy (TB) $100,000 (Turf) 1,900m; Winner: Ya Hayati, William Buick, Charlie Appleby.

7.40pm: Handicap (TB) $135,000 (D) 1,200m; Winner: Bochart, Richard Mullen, Satish Seemar.

8.15pm: Balanchine Group Two (TB) $250,000 (T) 1,800m; Winner: Magic Lily, William Buick, Charlie Appleby.

8.50pm: Handicap (TB) $135,000 (T) 1,000m; Winner: Waady, Jim Crowley, Doug Watson.

9.25pm: Firebreak Stakes Group Three (TB) $200,000 (D) 1,600m; Winner: Capezzano, Mickael Barzalona, Salem bin Ghadayer.

10pm: Handicap (TB) $175,000 (T) 2,410m; Winner: Eynhallow, Mickael Barzalona, Charlie Appleby.

Racecard
%3Cp%3E%0D5pm%3A%20Al%20Maha%20Stables%20%E2%80%93%20Maiden%20(PA)%20Dh80%2C000%20(Turf)%201%2C400m%0D%3Cbr%3E5.30pm%3A%20Al%20Anoud%20Stables%20%E2%80%93%20Handicap%20(PA)%20Dh80%2C000%20(T)%201%2C200m%0D%3Cbr%3E6pm%3A%20Wathba%20Stallions%20Cup%20%E2%80%93%20Handicap%20(PA)%20Dh70%2C000%20(T)%201%2C400m%0D%3Cbr%3E6.30pm%3A%20Arabian%20Triple%20Crown%20Round%202%20%E2%80%93%20Group%203%20(PA)%20Dh%20300%2C000%20(T)%202%2C200m%0D%3Cbr%3E7pm%3A%20Liwa%20Oasis%20%E2%80%93%20Group%202%20(PA)%20Dh300%2C000%20(T)%201%2C400m%0D%3Cbr%3E7.30pm%3A%20Dames%20Stables%20%E2%80%93%20Handicap%20(TB)%20Dh80%2C000%20(T)%201%2C400m%3C%2Fp%3E%0A
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

Updated: February 04, 2025, 4:53 AM