Lebanese Parliament Speaker Nabih Berri casts his vote on Thursday. Today’s news that elected representatives have finally elected a new head of state – despite a disruptive session with harsh exchanges - comes as a relief. Reuters
Lebanese Parliament Speaker Nabih Berri casts his vote on Thursday. Today’s news that elected representatives have finally elected a new head of state – despite a disruptive session with harsh exchanges - comes as a relief. Reuters
Lebanese Parliament Speaker Nabih Berri casts his vote on Thursday. Today’s news that elected representatives have finally elected a new head of state – despite a disruptive session with harsh exchanges - comes as a relief. Reuters
Lebanese Parliament Speaker Nabih Berri casts his vote on Thursday. Today’s news that elected representatives have finally elected a new head of state – despite a disruptive session with harsh exchang


Lebanon's new president Joseph Aoun has an opportunity to rebuild


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January 09, 2025

As departing interviews go, Lebanese president Michel Aoun’s remarks on the eve of his resignation in October 2022 were prescient. He told the Reuters news agency that without a replacement or formal Cabinet lined up, the country faced “constitutional chaos”.

Since then, Lebanon has indeed suffered from "constitutional chaos", witnessing a difficult era characterised by political inertia. A caretaker administration was left to tackle the fallout out from the country’s catastrophic financial collapse, the aftermath of the 2020 Beirut port explosion and last year’s Israeli invasion and occupation. Despite its efforts, few answers to the nation’s myriad crises were forthcoming. Therefore, today’s news that its elected representatives have finally got together to choose a new head of state – despite a disruptive session with harsh exchanges between MPs - comes as a relief.

Electing former army chief Joseph Aoun as president, ending two years and four months of a presidential vacuum is an important moment.

Former army chief Joseph Aoun has the advantage of coming from an institution that best represents Lebanese sovereignty and cross-community allegiance – the armed forces. AFP
Former army chief Joseph Aoun has the advantage of coming from an institution that best represents Lebanese sovereignty and cross-community allegiance – the armed forces. AFP

Lebanon, a country that has endured much outside interference, has the chance to begin national rebuilding. Syria has broken with the Assad dynasty that invaded and occupied Lebanon in 1976 before being ousted by the Cedar Revolution of 2005. Iran is another foreign power that has repeatedly meddled in Lebanese affairs but its main vehicle for this manipulation – Hezbollah – has suffered a string of serious setbacks in recent months. Mr Aoun, no relation to his predecessor, takes power at an opportune moment.

Indeed, there are several other reasons for cautious optimism. Mr Aoun has the advantage of coming from an institution that best represents Lebanese sovereignty and cross-community allegiance – the Lebanese Armed Forces. He will also enjoy the goodwill for foreign donors who are ready to finance much-need reconstruction. In addition, international markets have responded positively to the idea of an Aoun presidency; on Wednesday the value of Lebanon's government Eurobonds soared as investors anticipated MPs choosing Mr Aoun. Hezbollah, Mr Aoun’s biggest domestic challenge, is much chastened after dragging its country to war and losing a great deal of its senior leadership to Israeli attacks. Should the movement wish to keep its remaining influence, it would make strategic sense for it to work co-operatively with an Aoun-led administration.

Now that the political inertia plaguing Lebanon is over, swift and decisive steps are needed

A quick look at Mr Aoun’s in-tray reveals many challenges. Firstly, there is the business of appointing a new prime minister as well as balanced and functional Cabinet – no easy task in a country where sectarianism is hardwired into its constitutional makeup. As a shaky truce with Israel continues to hold and Israeli units reportedly pull back from occupied Lebanese territory, stabilising the country’s borders, and re-establishing the state’s monopoly on force are also critical to-do items. Syria’s future remains uncertain and as The National has reported, the flow of illegal arms across the border into Lebanon poses a grave security risk. There is also the mammoth task of building accommodation, healthcare and schooling facilities for the thousands of Lebanese displaced by Israeli bombardments.

No one should expect miracles; as outlined above, Lebanon’s challenges are many and varied. But now that the political inertia plaguing Lebanon is over, swift and decisive steps to shore up its sovereignty, provide for people left homeless by war or impoverished by financial collapse, could mean finding a path out of the “constitutional chaos” the previous occupant of Baabda Palace predicted more than two years ago.

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

Updated: January 10, 2025, 5:57 AM