China sends warships to Middle East as Houthi Red Sea attacks increase

China has sent a fleet, including a guided-missile destroyer, to the Gulf of Aden as part of an antipiracy mission and as Houthi attacks on commercial shipping increase in the Red Sea.

The 46th fleet of the Chinese People's Liberation Army Navy set sail on Wednesday from a military port in the coastal city of Zhanjiang in south China's Guangdong Province to take over an escort mission from the 45th naval fleet in the Gulf of Aden and the waters off Somalia, Xinhua news agency reported.

It includes the guided-missile destroyer Jiaozuo, the missile frigate Xuchang, and the comprehensive replenishment vessel Honghu.

The fleet has more than 700 officers and soldiers, including dozens of special forces personnel, and two helicopters on board.

Since November, Yemen's Houthi rebels have repeatedly targeted ships in the Red Sea and surrounding waters in response to the Israel-Hamas war, putting shipping at risk on a key route for trade for Asia, the Middle East and Europe.

Despite a month of US-led air strikes, the Houthis remain capable of launching significant attacks.

The US military said on Friday that a Houthi attack on the freighter Rubymar caused significant damage to the ship and an 18-mile (29km) oil slick.

“The ship is anchored but slowly taking on water,” the US Central Command said in a statement on the Belize-flagged UK-owned cargo ship.

The Rubymar was transporting over 41,000 tons of fertiliser when it was attacked, the statement added.

Yemen’s Houthis targeted the Rubymar in the Gulf of Aden on Sunday, and on Monday the group’s military spokesperson, Yahya Sarea, said it was at risk of sinking.

Should late investors consider cryptocurrencies?

Wealth managers recommend late investors to have a balanced portfolio that typically includes traditional assets such as cash, government and corporate bonds, equities, commodities and commercial property.

They do not usually recommend investing in Bitcoin or other cryptocurrencies due to the risk and volatility associated with them.

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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

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