Ukraine‘s ‘deep strike’ targets Russian drone factory


Gillian Duncan
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Kyiv caused “significant” damage to a plant in Russia which produces Shahed drones used to attack Ukraine, in its deepest strike inside Moscow’s territory since the war began more than two years ago.

Ukraine used drones to mount the attack, which also targeted Taneco, Russia's third-largest oil refinery, around 1,300km from the border.

A fire broke out at the refinery, which was extinguished within 20 minutes, the Russian state RIA news agency said, adding that production had not been disrupted.

Pictures from the scene indicated the drone hit the primary refining unit, CDU-7, which accounts for around a half of the Taneco site's annual production capacity.

A Kyiv source said a Ukrainian drone attack had caused “significant damage” to a drone assembly plant.

The plant manufactures Shahed drones, which are branded as Geran-2 in Russia, according to RBC Ukraine.

The attack was among several in Tatarstan in the early hours of Tuesday.

Drones have become an increasingly important element in Ukraine’s military strategy, as Kyiv’s US and European allies remain reluctant to provide long-range missiles capable of destroying targets deep within Russia, for fear of escalation.

Ukrainian drone developers have for months been extending the weapons’ range, part of Kyiv’s effort to compensate for its battlefield disadvantage in weapons and troops.

The unmanned aerial vehicles are also an affordable option amid the months-long hold-up of $60 billion of US military aid in Congress. The delay has left Ukraine increasingly short of even basic ordnance such as artillery shells.

Neither side can currently make much of a dent on the front line that stretches more than 1,000km.

Ukraine has previously launched drone attacks in and around St Petersburg, about 1,000km north of the border.

But the facilities in Tatarstan, a province on the Volga river, appear to be Ukraine's furthest strike.

Refineries and oil terminals have increasingly become targets for Ukrainian drones in stepped-up attacks on Russian territory in recent weeks.

President Volodymyr Zelenskyy last year said Ukraine had developed a weapon that hit a target 700km away, in an apparent reference to a drone attack on Russian soil.

In 2023, Ukraine’s minister for digital transformation, Mykhailo Fedorov, said the government was intent on building a state-of-the-art “army of drones” and that its value to the war effort would be evident by the end of this year.

Ukraine trained more than 10,000 new drone pilots last year, he said.

Ukraine has also developed deadly sea drones that have struck Russian navy ships in the Black Sea.

On Tuesday, Ukraine’s air force said it had intercepted nine out of 10 Shahed drones launched overnight by Russia in the latest attack on the country’s power grid.

New EU sanctions recently took aim at Russia’s attempts to ramp up Shahed-type drone manufacturing by targeting key technology.

And last month, the UK said it would send more than 10,000 drones for use by Ukrainian armed forces throughout 2024.

Defence Secretary Grant Shapps said the UK would harness its “world-leading defence industries to deliver advanced new drone capabilities” to Ukraine.

Britain is also part of a coalition of seven countries which has pledged to send one million drones to Kyiv by increasing production.

Last month Mr Fedorov claimed Ukraine could produce two million drones a year, double the existing rate, with western financial backing.

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.
 

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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Founders: Hamdi Tabbaa, co-founder and CEO. Hussein Alsarabi, co-founder and CTO

Based: Amman, Jordan

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Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year

 

Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month

 

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Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse

 

Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth

 

Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances

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Updated: April 02, 2024, 2:34 PM