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Israel on Tuesday night confirmed a Houthi cruise missile had landed near the city of Eilat in the country’s south, the first time the group has successfully breached Israeli air defences.
“A cruise missile coming from the direction of the Red Sea fell in an open area, the target was being monitored by Air Force forces,” said a statement from the Israeli military. “There were no casualties and no damage was caused. The incident is being investigated.”
Although there were no deaths or injuries, it represents a demonstration of long-range attack capability for the Iran-backed militia.
The missile was launched from Houthi-controlled Yemen, about 1,600km from the target.
The longest-range US cruise missile, the AGM-158B-2, has a range of about 1,900km.
Houthi cruise missiles used before the current Gaza war were thought to have a range of about 1,300km, based on their use on targets in Saudi Arabia during Yemen's civil war.
The group's longest-range missile, the Quds-3, has a claimed range of 2,000km and is the only type capable of flying to Eilat.
The Houthis have another long-range missile, the Toufan, but unlike a low-flying cruise weapon that sneaks under radar beams, it flies at high altitude and is more vulnerable to air defences.
Houthi arsenal
The Houthis have also fired volleys of ballistic missiles, cruise missiles and drones at Israel since the Gaza war began on October 7, but none of the projectiles hit their targets.
On October 23, a Houthi drone exploded in the Egyptian town of Taba, injuring six, while in November a drone struck Eilat from the direction of Syria, from where it was fired by Iran-backed militias.
Previous ballistic and cruise missile attacks by the Houthis against Israel have been intercepted by US and Israeli warships, jet aircraft and land-based air defences.
Cruise missiles such as the one that struck Eilat on Tuesday can be tracked and shot down by jets – a tactic the Israelis have used – but that depends on keeping aircraft present in the air for long periods, a costly operation.
Cruise missiles fly low to the ground – rarely higher than 150 metres – making them hard for radar beams to detect at long range, due to hills and the Earth's curvature. They can also navigate and change direction at low level, complicating the task of air defence forces.
The Houthis fired Quds-3 cruise missiles towards Israel last year but they were shot down by the USS Carney warship over the Red Sea.
Ballistic missiles, by contrast, fly at high altitude, generally on a predictable “ballistic arc”, giving air defences such as the US Patriot or the Israeli Arrow ample time to spot and intercept them.
Increased accuracy?
The relatively successful deployment of the cruise missile, which succeeded in getting past Red Sea naval air defences despite not hitting a target, could be a milestone in Iranian power projection.
“Iran is likely taking the opportunity to test weapons systems in an actual theatre of war. They do this by providing their advanced weapons systems to their proxy forces,” Mick Mulroy, former US Deputy Assistant Secretary of Defence for the Middle East, told The National.
The Houthis say their intervention in the Gaza conflict, by blockading the Red Sea, is intended to pressure Israel into a ceasefire. Mr Mulroy, a former CIA officer, said Iran “directly contributed to the conflict in Gaza” by supplying Hamas with most of its military capacity.
In 2019, Houthis used Iranian-designed cruise missiles – according to a UN investigation – to hit oil infrastructure in Khurais, Saudi Arabia, about 800km from Houthi-controlled territory.
The Quds-1 missile was used, which experts say is a slightly modified version of the Soumar cruise missile, an Iranian weapon, part of a pipeline of Iranian arms established for the Houthis as far back as 2009, the UN found.
The Quds-3 is an evolution of the Quds-1, extended for more fuel capacity, according to the International Institute for Strategic Studies.
While the weapons prove challenging to shoot down, the US has invested heavily in upgrading Patriot air defence missile systems to hit low-flying cruise missiles, systems that have been supplied to Israel by the US and Germany.
While the Israelis did not confirm what was used to track the missile, it also has the David's Sling missile defence system, which like the Patriot is capable of choosing not to intercept missiles that are heading for open ground – as may have been the case in Eilat.
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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
Top investing tips for UAE residents in 2021
Build an emergency fund: Make sure you have enough cash to cover six months of expenses as a buffer against unexpected problems before you begin investing, advises Steve Cronin, the founder of DeadSimpleSaving.com.
Think long-term: When you invest, you need to have a long-term mindset, so don’t worry about momentary ups and downs in the stock market.
Invest worldwide: Diversify your investments globally, ideally by way of a global stock index fund.
Is your money tied up: Avoid anything where you cannot get your money back in full within a month at any time without any penalty.
Skip past the promises: “If an investment product is offering more than 10 per cent return per year, it is either extremely risky or a scam,” Mr Cronin says.
Choose plans with low fees: Make sure that any funds you buy do not charge more than 1 per cent in fees, Mr Cronin says. “If you invest by yourself, you can easily stay below this figure.” Managed funds and commissionable investments often come with higher fees.
Be sceptical about recommendations: If someone suggests an investment to you, ask if they stand to gain, advises Mr Cronin. “If they are receiving commission, they are unlikely to recommend an investment that’s best for you.”
Get financially independent: Mr Cronin advises UAE residents to pursue financial independence. Start with a Google search and improve your knowledge via expat investing websites or Facebook groups such as SimplyFI.