At least four killed in Israeli attacks on Lebanon as border fighting rages

Four people were killed in Israeli strikes on southern Lebanon on Thursday night as border fighting reached a peak after weeks of clashes.

Israel pummelled southern Lebanon after a volley of Hamas and Hezbollah rockets were fired from across the border, killing four in the Wadi Saluki area, according to state media.

Hamas's Al Qassam brigades said it had launched 12 rockets at the northern Israeli city of Kiryat Shmona and its surroundings "in response to the massacre in Gaza", while Hezbollah said it had launched 19 simultaneous attacks, firing artillery and missiles at border posts.

The Israeli military later said it was striking a series of Hezbollah targets across the border.

While Israel and Lebanese militants have regularly traded fire in recent weeks, the Thursday attacks were the most significant since the Israel-Gaza war began in early October.

Two Israelis were wounded by shrapnel in Kiryat Shmona, the most populous settlement in the border region, which has been largely emptied in recent weeks amid a rise in cross-border clashes.

The threat of a wider regional conflict is mounting as Israel continues to pound the besieged Gaza Strip, where more than 9,000 people have been killed in air strikes, about three quarters of them women, children or elderly.

That threat grew more pronounced on Thursday night as Iraqi militia groups claimed a drone fired towards Israeli positions on Dead Sea earlier in the day.

In a statement on pro-militia Telegram channels, the "Islamic Resistance of Iraq" claimed the attack was "in support of our people in Gaza, and in response to the massacres committed ... against Palestinian civilians".

There was no immediate comment from Israel.

It comes a day before Hezbollah chief Hassan Nasrallah is due to make his first comments on the Israel-Gaza war, which has claimed the lives of more than 10,400 people in less than a month.

Israeli police inspect the scene of a rocket strike in the border town of Kiryat Shmona. Reuters

More than 70 Lebanese have been killed by Israeli attacks since October 7, as Lebanon becomes more enmeshed in the war in Gaza.

This includes 50 Hezbollah fighters and Reuters journalist Issam Abdallah, who was killed while covering Israeli air strikes on southern Lebanon.

Referencing the fighting during a nightly press briefing, Israeli army spokesman Daniel Hagari said Israel “will respond with action and not words”.

“Dozens of jets are flying all over the Middle East at any given time. Our enemies see that,” he said on Thursday.

The military also accused Iran of sending proxy militias from Syria into southern Lebanon to attack Israel, a claim denied by Hezbollah.

Hezbollah said it had launched the Thursday attack in response to Israeli fire on the disputed Shebaa Farms.

Analysts say Mr Nasrallah is unlikely to declare all-out war on Israel, with many Lebanese fearing such a conflict could push an already struggling country past its breaking point.

The White House on Thursday said that it was concerned by the escalation.

“We're concerned about continued attacks on Israeli forces there in the north, as are the Israelis,” National Security Council spokesman John Kirby told reporters during a news briefing.

However he added that “I don't believe we've seen any indication yet specifically that Hezbollah is ready to go in full force”.

Speaking before departing the US for another visit to Israel, Secretary of State Antony Blinken also said Washington is looking to avoid further fighting on the border.

“We are determined to prevent escalation on any of these fronts, whether its Lebanon … the West Bank, whether it’s anywhere else in the region,” he told reporters on the tarmac.

France has also called for calm between Lebanon and Israel.

Defence Minister Sebastien Lecornu is currently on a visit to Lebanon, warning against a wider regional conflict.

A war with Israel “could have major escalatory effects on the whole region”, Mr Lecornu said in a visit to French UN peacekeepers in the south on Thursday.

President Emmanuel Macron has also said Paris is working to maintain calm between the two countries, while Foreign Minister Catherine Colonna is also due to visit the Middle East on Sunday in a bid to bolster diplomatic efforts to end the war.

Israel has warned any conflict with Lebanon would be much more destructive than the 2006 Lebanon war, which killed at least 1,200 Lebanese.

“Hezbollah may decide to act, and we will have to respond,” Israeli Strategic Affairs Minister Ron Dermer told reporters earlier this week.

“The response now will make what happened in 2006 look like child's play.”

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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