UAE activates defence agreement with France to ‘confront failed terrorist attempts'

The UAE on Friday announced the activation of a joint defence agreement with France in an effort to “confront failed terrorist attempts” against the country.

Earlier, French Defence Minister Florence Parly said the UAE has been a victim of terrorist attacks.

Ms Parly said her country would provide military support to the Emirates and assist it in protecting its air space against any intrusion.

France and the UAE are linked by a strategic partnership, with defence co-operation a part of the agreement, she said.

Ms Parly said her country’s Rafale fighter planes are based in Abu Dhabi and would help the UAE Armed Forces in carrying out surveillance, detection and interception missions, if necessary.

The UAE's Ministry of Defence confirmed the activation of the partnership in a statement on Friday evening.

There have been three attacks on the UAE by Yemen's Houthi rebels in the past month. An attack on January 17 killed three oil company workers — Hardeep Singh, Hardev Singh and Mamoor Khan — and wounded six others.

Missiles fired at the UAE by the Houthis on January 24 and January 31 were intercepted and did not lead to any casualties or damage.

On February 2, the US said it would send fighter jets and a warship to support the UAE.

The US is also reviewing a range of policy options after the attacks on the UAE, including designating the Houthis as a foreign terrorist organisation.

Dr Anwar Gargash, diplomatic adviser to President Sheikh Khalifa, praised France's support for the Emirates in a post on Twitter on Friday.

“The challenges show the nature of the positions that are relied upon. In this context, the distinguished French position in its support for the UAE is highlighted, to be added to the positions of brothers and friends,” said Dr Gargash.

“As usual, the UAE deals with the transient terrorist challenge wisely, based on its solid national defence capabilities and broad global solidarity.”

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.

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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

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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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UAE activates defence agreement with France to ‘confront failed terrorist attempts'

European nation will provide military support and assist the Emirates in protecting its air space

Ten tax points to be aware of in 2026

Who was Alfred Nobel?