President Sheikh Mohamed spoke by phone with Indian Prime Minister Narendra Modi on Wednesday. Photo: Crown Prince Court / Reuters
President Sheikh Mohamed spoke by phone with Indian Prime Minister Narendra Modi on Wednesday. Photo: Crown Prince Court / Reuters
President Sheikh Mohamed spoke by phone with Indian Prime Minister Narendra Modi on Wednesday. Photo: Crown Prince Court / Reuters
President Sheikh Mohamed spoke by phone with Indian Prime Minister Narendra Modi on Wednesday. Photo: Crown Prince Court / Reuters

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UAE

President Sheikh Mohamed and India's Modi explore ways to bolster ties

UAE leader and Prime Minister Narendra Modi discuss long-standing partnership in latest talks

The National

July 30, 2025

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President Sheikh Mohamed and Indian Prime Minister Narendra Modi reviewed efforts to strengthen ties under a strategic partnership in place between the nations in a phone call on Wednesday.

The two leaders spoke of their desire to promote sustainable development for their countries during the talks, state news agency Wam reported.

Sheikh Mohamed congratulated Mr Modi on becoming the second longest-serving prime minister in India's history.

Mr Modi, 74, came to power in May 2014 and won a third consecutive term following national elections in June 2024.

He has overtaken former prime minister Indira Gandhi, who served from January 1966 to March 1977.

India's longest-serving prime minister is Jawaharlal Nehru, who was in office from August 15, 1947, to May 27, 1964.

India and the UAE enjoy a deep-rooted friendship that dates back to the formation of the Emirates.

The UAE is home to more than 3.5 million Indians, the largest expatriate community in the country.

The UAE and India in April signed eight initial pacts across sectors from logistics to health care that are aimed at boosting economic ties.

The preliminary agreements also cover industries including infrastructure, higher education, maritime services, logistics and private sector engagement.

They were signed during the official visit to India by Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, Deputy Prime Minister and Minister of Defence.

 

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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Kareem Shaheen on Canada
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: July 30, 2025, 4:53 PM
Sheikh Mohamed bin ZayedNarendra ModiUAEIndia