The UAE will celebrate South Korea’s National Day on October 3 to mark 40 years of diplomatic relations between the two countries
South Korea and the UAE established bilateral diplomatic ties in 1980.
Over the years, both countries have broadened their relationship in various sectors such as clean energy, oil, tourism, logistical services and culture.
The Barakah Nuclear Power Plant is a key strategic joint project between the two countries that further strengthens the relationship.
In August, the Barakah plant produced its first megawatt of clean and environment-friendly electricity using nuclear energy.
The notable achievement came less than three weeks after the plant became operational.
It was a crucial first step in an ambitious journey with an ultimate goal to deliver 25 per cent of the UAE's electricity with zero carbon emissions for several decades.
In September, the two countries signed agreements to co-operate in ten new sectors including science, oil and gas and infrastructure over the next two years.
Non-oil trade with South Korea, a key importer of hydrocarbons from the Middle East, reached $5 billion (Dh18.3bn) in 2019.
Both countries will explore joint investments in small and medium-sized enterprises, communication, information technology, artificial intelligence, the Internet of Things, 5G technology, smart agriculture, green economy, energy, including renewables, science and innovation, education, tourism, financial services and transportation.
The UAE is the second-largest oil exporter to South Korea and the second leading trade importer from South Korea in the Middle East.
South Korea’s key exports to the UAE include electronics, vehicles, oil equipment and facilities while the Emirates exports include raw oil, oil products, aluminium and liquefied petroleum gas to South Korea.
Nearly 11,000 Emiratis visit South Korea every year and over 200,000 South Korean tourists come to the UAE.
In January, the two countries launched the UAE-Korea Cultural Dialogue 2020 that will involve a series of events held in both countries focusing on literature, food and music.
During the Covid-19 crisis, the UAE evacuated South Korean citizens and their families from Tehran during the peak of the virus in the region.
The UAE is now home to about half of all South Korean residents in the Gulf, with about 13,000 residing in the country, according to the Korean consulate general in the Emirates.
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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
