Herd immunity by the end of the year in the UAE remains possible, but it will require people to stay disciplined. AFP
Herd immunity by the end of the year in the UAE remains possible, but it will require people to stay disciplined. AFP
Herd immunity by the end of the year in the UAE remains possible, but it will require people to stay disciplined. AFP
Herd immunity by the end of the year in the UAE remains possible, but it will require people to stay disciplined. AFP

Can the UAE achieve herd immunity this year?


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Earlier this week, Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, encouraged all citizens and residents of the UAE to get vaccinated against Covid-19 to "help us end this pandemic". By personally encouraging people to do so, the country's leadership is making clear the direct line between inoculation and speeding up the nation's post-pandemic recovery. It also highlights that UAE public officials believe that an end to Covid-19's grip on our lives – at least in the Emirates – is in sight.

Herd immunity is the ultimate goal. As of Tuesday, 1,275,500 shots have been administered in the UAE, putting the country second globally in the number of vaccines administered for every 100 people. Any adult residing in the country is able to get the vaccine for free. Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces said that “we hope that with vaccinations picking up pace, we will reach the point of full recovery in the shortest possible time”. That is the hope we all share and for which we must strive.

Yet, the projected pace of progress in an individual nation does not match global rates.

On Monday, the World Health Organisation warned that worldwide herd immunity would not be achieved by the end of 2021. Surging infection rates across Europe form part of this estimation. Other reasons given by the UN agency's chief scientist, Soumya Swaminathan, include limited access to vaccines in developing countries, false scepticism some hold over vaccine safety, and the threat posed by the virus mutating into more contagious forms, possibly ones that render vaccines less effective.

Al Aweer desert farms in Dubai emirate, which due to Covid-19 has cultivated the desert to provide crops and reduce imports. AFP
Al Aweer desert farms in Dubai emirate, which due to Covid-19 has cultivated the desert to provide crops and reduce imports. AFP
Vaccination rollouts do not mean the fight against Covid-19 is over

The statement stressed that any inoculation programme takes time. Nonetheless, many governments who knew even in the early days of the pandemic that vaccines would come failed to prepare logistically for a swift rollout. There has also been a global inability to develop strategies to keep up pace with misinformation and conspiracy theories about the safety of jabs.

The speed of vaccine development during this pandemic has been unprecedented. But this win does not guard against inevitable setbacks. Yesterday, researchers in Brazil published a study showing that the CoronoVac shot, a mainstay of the country's inoculation programme, is only 50 per cent effective.

Even in nations ahead on vaccination, cases are rising. Israel, which leads the field in inoculating its citizens, is experiencing a surge in infections that it blames on the arrival of the more infectious UK variant of Covid-19 in the country. On Tuesday, the UAE recorded 3,243 new cases of the virus, the first time since the beginning of the pandemic that the nation exceeded 3,000 daily cases. While this number is significantly lower than in other developed countries, it highlights the fact that the acceleration of vaccination campaigns does not yet mean the fight against Covid-19 is over.

Stressing this simple point consistently should remain central in public messaging the world over. Even in nations where herd immunity in 2021 remains possible, people must not lose discipline and jeopardise recent progress. Hand-washing, maintaining social distancing and wearing face masks in public remain as important as they were at the beginning of the pandemic.

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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