New governments often face difficult challenges, even in the best circumstances. Lebanon, a country that has known more than its fair share of difficulties, is now being led by a renewed administration that is carrying the hopes of its people for a better future.
Sadly, there has been little sign of a honeymoon period for the new government in Beirut. Its authority is not only challenged by the presence of occupying Israeli troops in southern Lebanon, but also by the continuing subversion being carried out by Iran-backed Hezbollah. As Lebanon’s leaders try to maintain a fragile ceasefire with Israel while pushing for the withdrawal of Israeli soldiers, Hezbollah and its allies have been exploiting the country’s difficulties to flex their political muscle.
Hezbollah, although still reeling from the Israeli attacks that killed many of its leaders, saw an opportunity in the Lebanese government's recent decision to ban Iranian flights. This was taken after reports emerged of Tehran using civilian aircraft to smuggle cash to Beirut to arm its proxy. Unrest followed Beirut’s decision, with street protests by Hezbollah supporters breaking out in several areas. According to the army, demonstrations near the capital’s airport included acts of vandalism, assaults on soldiers and attacks on UN vehicles – including one that injured the peacekeeping force's departing deputy commander.
The response from the Lebanese authorities, from top to bottom, offers some hope that a robust and stable state is emerging. President Joseph Aoun on Saturday joined UN Secretary General Antonio Guterres, the US State Department and Lana Nusseibeh, the UAE’s Assistant Minister for Political Affairs, in condemning the attack on the UN convoy. Interior Minister Ahmad Al Hajjar said more than 25 people had been arrested by army intelligence with another person detained by the security services.
Order may have been restored but Lebanon’s leadership deserves a chance to deliver on its commitment to building a better country. It cannot do this effectively while Hezbollah retains the power to create unrest at will with unruly street protests and Israel continues to drag its feet when it comes to pulling all its forces out of sovereign Lebanese territory. To compound these challenges, Beirut faces other concurrent problems: how to clear the tonnes of rubble left by Israeli bombardments; housing displaced citizens; stabilising the country’s ailing economy and working towards the safe and voluntary return of Syrian refugees.
Beirut's authority is challenged not only by the presence of occupying Israeli troops but by Iran-backed Hezbollah's agenda
The answers to such problems require effective governance, something that is not the forte of radicals such as Hezbollah. Such groups are accomplished when it comes to pursuing costly and destabilising conflicts, less so when it comes to providing for the people living under their rule.
Lebanon’s leaders are clear about what should happen next. Speaking to The National last Friday, Lebanese Foreign Minister Youssef Rajji said the country’s Cabinet was working to ensure that "the monopoly of force was in the hands of the legal government", adding that Beirut sought the "full, total and unconditional withdrawal" of Israeli forces. Lebanon’s government needs and deserves the right kind of support to remove these twin obstacles to a brighter future for all.
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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
