Flames and smoke rise following a strike at Mukalla Port in Hadramout, southern Yemen. Photo: Supplied
Flames and smoke rise following a strike at Mukalla Port in Hadramout, southern Yemen. Photo: Supplied
Flames and smoke rise following a strike at Mukalla Port in Hadramout, southern Yemen. Photo: Supplied
Flames and smoke rise following a strike at Mukalla Port in Hadramout, southern Yemen. Photo: Supplied

Saudi-led coalition conducts 'limited operation' against weapons and combat vehicles in southern Yemen


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The Saudi-led coalition in Yemen announced on Tuesday a “limited military operation” against weapons and combat vehicles in southern Yemen.

“Coalition air forces carried out a limited military operation this morning. The operation targeted weapons and combat vehicles”, Coalition Forces spokesman Major General Turki Al Maliki said.

He added that the equipment had been unloaded from two vessels at the port of Mukalla on Saturday and Sunday, without specifying the nature of the operation.

The hit comes after Yemen’s Presidential Leadership Council (PLC) chief Rashad Al Alimi said his governing board asked the Saudi-led coalition to take “immediate measures” to counter recent military moves by the Southern Transitional Council (STC).

The STC, which calls for the restoration of an independent state in the south, recently took control of Hadhramaut and Mahra from other pro-government forces, effectively consolidating control over all southern provinces.

It said the move came after what it described as the failure of other pro-government factions and Yemen's PLC “to launch” any serious campaign to push the Houthis from their northern strongholds, including Sanaa, Yemen's capital. Three of the PLC’s eight members are affiliated with the STC, highlighting deep fractures within Yemen’s anti-Houthi camp.

Saudi Arabia, which hosts senior Yemeni government and PLC figures and has led the anti-Houthi coalition since 2015, has condemned the STC’s takeover. It said it was carried out without co-ordination with the coalition. The UAE welcomed Saudi efforts to stabilise the situation.

In the statement carried by Saudi state media, Gen Al Maliki said the two vessels arrived from the port of Fujairah and entered the port of Mukalla “without obtaining official clearance from the Coalition Joint Forces Command”.

He added that the crews of the two vessels “disabled their tracking systems and offloaded a large quantity of weapons and combat vehicles to support the Southern Transitional Council’s forces in Yemen’s eastern governorates, with the aim of fuelling the conflict”.

The latest crisis underscores the fragility of Yemen’s already fractured political landscape, with infighting among anti-Houthi forces threatening to further complicate efforts to stabilise the war-torn country and defeat the Iran-backed rebels who have controlled the capital Sanaa and northern regions for a decade.

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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

UPI facts

More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions

Updated: December 30, 2025, 7:43 AM