With the war in Ukraine having entered its second year, and with no end in sight, serious questions must be asked about the way forward.
One year ago, I faulted European officials for not taking US President Joe Biden’s early warnings more seriously and for failing to act more vigorously to forestall Russia’s eventual invasion. But five months later, in July, when it became clear to me that there was no good outcome to this war, I wrote in these pages: “Only naive souls or blind ideologues could have thought that Russia’s aggression against Ukraine would end well. It will not. And the longer it continues, the worse the situation will be for everyone. The reality is that no one can or will win this war.”
Seven months later, the toll tells the story. According to US and European officials, more than 130,000 Ukrainian soldiers and close to 200,000 Russian soldiers have been killed or wounded.
The impact on the Ukrainian people and economy has been even more consequential. The country’s GDP declined by one third, according to its economy ministry. It has lost more than 40 per cent of its electricity-generating capacity. And UN data suggests more than 8 million Ukrainians have been forced to flee their country to the West, with many more internally displaced as because of widespread destruction of homes and infrastructure. As a result, Ukraine has become dependent on the West not only for weapons, but also for economic subsidies to pay its military, government entities and basic services.
The US and its western allies have also dug themselves into a rhetorical hole
Barring suspected drone attacks inside Russian territory in recent days, ordinary Russians have so far been spared the death and devastation. Sanctions imposed by the West have had an impact, but Moscow has not only been able to draw on reserves to buttress the national economy, but has also found ways to circumvent sanctions to maintain a profitable, though diminished, level of exports and imports. As a result, the Russian economy shrank far less than expected in 2022, with the International Monetary Fund even predicting some slight growth in 2023. And instead of mobilising the world against Russia, the war has accentuated the pre-existing divides between East and West, North and South.
A year into this war, several developments should be noted. Most important among them is the fact that it has become an existential conflict for all parties involved. Ukrainian nationalism has proved to be a far more potent force than expected. Motivated by that deeply held belief and emboldened by western military and political support, Ukrainian leaders now pledge to continue fighting until Russian forces are removed from “every square inch” of their territory.
Moscow initially projected the view that Ukraine was an artificial and even “illegitimate” country and sought to bring down its leadership through a devastating “shock and awe” assault. When that goal became unattainable, it settled on claiming its right to annex territories in the eastern part of Ukraine that are heavily Russian speaking. Having been forced to surrender control in some of the areas Russian forces had initially occupied and now ground down in deadly combat on several fronts, Moscow is loath to relinquish more territory or admit defeat.
The US and its western allies have also dug themselves into a rhetorical hole. Early on, Mr Biden sounded like a mix of Winston Churchill and Ronald Reagan, mobilising American and Western European opinion to join this battle to save democracy and freedom from so-called authoritarian aggression and assuring everyone not only that it would be won, but also that it must be won. And at last month’s Munich Security Conference, German Foreign Minister Annalena Baerbock upped the ante, declaring that anything short of a Russian defeat would mean “the end of the international order and the end of international law”.
Now one year after it began, the battle has not been won and all signs point to it continuing. The main combatants have shown remarkable resilience. The US and its allies are pouring new and more lethal aid into Ukraine. Thus supplied, the Ukrainians are gearing up for a new offensive. And the Russians are holding their own, determined to weaken Ukrainian resolve.
The problem, of course, is that more weapons or more battlefield losses will not end this war, with all parties still believing they can and must be victorious. However, there are cautionary signs ahead.
For instance, Russia has augmented its weapons with inferior, though still lethal, supplies from Iran and North Korea. Should the vastly superior weapons from the US and Nato allies prove impactful, will China respond to Russian appeals for assistance? After initially welcoming fleeing Ukrainians, European support for refugees is showing signs of diminishing because of the economic and social costs. Will this grow? While Mr Biden initially found bipartisan support for Ukraine, recent polling shows an emerging partisan split, with Republicans and some Democrats questioning the administration’s requests for additional aid. Will this tie the administration’s hands moving forward? And finally, given the Western European economic downturn, who will pay for Ukraine’s reconstruction at war’s end?
Against this backdrop, year two of this war promises only more death and destruction. None of the major parties show signs of losing their resolve. If anything, attitudes among foreign policy hawks on both sides have hardened, convinced that more arms and a better strategy are all that is needed to win. And so, it continues.
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
Zayed Sustainability Prize
Cricket World Cup League Two
Oman, UAE, Namibia
Al Amerat, Muscat
Results
Oman beat UAE by five wickets
UAE beat Namibia by eight runs
Fixtures
Wednesday January 8 –Oman v Namibia
Thursday January 9 – Oman v UAE
Saturday January 11 – UAE v Namibia
Sunday January 12 – Oman v Namibia
THE%20HOLDOVERS
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Mohammed bin Zayed Majlis
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
Pathaan
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THREE POSSIBLE REPLACEMENTS
Khalfan Mubarak
The Al Jazira playmaker has for some time been tipped for stardom within UAE football, with Quique Sanchez Flores, his former manager at Al Ahli, once labelling him a “genius”. He was only 17. Now 23, Mubarak has developed into a crafty supplier of chances, evidenced by his seven assists in six league matches this season. Still to display his class at international level, though.
Rayan Yaslam
The Al Ain attacking midfielder has become a regular starter for his club in the past 15 months. Yaslam, 23, is a tidy and intelligent player, technically proficient with an eye for opening up defences. Developed while alongside Abdulrahman in the Al Ain first-team and has progressed well since manager Zoran Mamic’s arrival. However, made his UAE debut only last December.
Ismail Matar
The Al Wahda forward is revered by teammates and a key contributor to the squad. At 35, his best days are behind him, but Matar is incredibly experienced and an example to his colleagues. His ability to cope with tournament football is a concern, though, despite Matar beginning the season well. Not a like-for-like replacement, although the system could be adjusted to suit.
Company%20profile
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HIJRA
Starring: Lamar Faden, Khairiah Nathmy, Nawaf Al-Dhufairy
Director: Shahad Ameen
Rating: 3/5