Pakistan police officers gather near the site of a bomb explosion in Kabal Aligrama, Swat Valley, Wednesday, Aug 6, 2008. Pakistani forces continue to clash with militants throughout the valley.
Pakistan police officers gather near the site of a bomb explosion in Kabal Aligrama, Swat Valley, Wednesday, Aug 6, 2008. Pakistani forces continue to clash with militants throughout the valley.
Pakistan police officers gather near the site of a bomb explosion in Kabal Aligrama, Swat Valley, Wednesday, Aug 6, 2008. Pakistani forces continue to clash with militants throughout the valley.
Pakistan police officers gather near the site of a bomb explosion in Kabal Aligrama, Swat Valley, Wednesday, Aug 6, 2008. Pakistani forces continue to clash with militants throughout the valley.

Asia

Pakistan troops clash with Taliban

One soldier and 25 Taliban militants are killed as Pakistan attempts to tighten its control on the frontier territory.

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Pakistani troops backed by helicopter gunships killed 25 Taliban militants and a soldier died in a bomb blast as forces moved into a troubled tribal area, security officials said today. Clashes erupted when paramilitary troops reoccupied a check post they had abandoned several months earlier in the Bajaur tribal zone bordering Afghanistan, a haven for Taliban and al Qa'eda militants, they said. The operation comes amid mounting US pressure for Pakistan's fledgling democratic government to crack down on Islamist fighters in the rugged frontier region.

"At least 25 militants have died in the clashes in the Loisam area of Bajaur over the past 24 hours," a senior security official said on condition of anonymity. A paramilitary trooper was killed and two wounded in a remote-controlled bomb blast as a convoy moved towards Loisam and three other soldiers were injured in the clashes, officials said. A Taliban spokesman, Maulvi Omar, said that 15 soldiers had been killed in the clashes but added that he did not have details of militant casualties.

Officials said clashes erupted yesterday when paramilitary soldiers entered the check post, some 15km west of the region's main town in Khar. Taliban militants resisted the move and attacked the post with rockets and automatic weapons, the officials said, adding that troops retaliated and helicopters pounded their suspected hideouts. * AFP

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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