Armoured vehicles from Nato's rapid reaction force are stationed in Norway for military exercises. AFP
Armoured vehicles from Nato's rapid reaction force are stationed in Norway for military exercises. AFP
Armoured vehicles from Nato's rapid reaction force are stationed in Norway for military exercises. AFP
Armoured vehicles from Nato's rapid reaction force are stationed in Norway for military exercises. AFP

Norway boosts defence spending after Russia's attack on Ukraine


Tim Stickings
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Norway on Friday became the latest Nato member to announce it would increase military spending to guard against a hostile Russia following the invasion of Ukraine.

Defence Minister Odd Roger Enoksen said Norway had “a neighbour to the east that has become more dangerous and more unpredictable”.

An extra 3 billion kroner ($342 million) will be used to strengthen Norway’s naval presence in the far north of Europe, intensify training for soldiers and reservists and increase stocks of ammunition, fuel and equipment.

The money will also be used to increase capacity to receive allied troops and strengthen cyber defence and intelligence.

Mr Enoksen said a Russian attack on Norway might be unlikely but that the Kremlin had significant economic and security interests in the region.

Norway, whose former prime minister Jens Stoltenberg is the current secretary-general of Nato, shares a 196-kilometre land border with Russia in the Arctic and a large maritime border in the Barents Sea.

“We need to increase our presence in the north,” Mr Enoksen said.

Germany and Denmark have both moved to increase defence spending since Russia invaded Ukraine, citing a changed security environment.

A Nato defence ministers' summit this week ended with the alliance's top generals given the responsibility of rethinking the bloc's posture, with Mr Stoltenberg calling for more troops and equipment to be stationed in Eastern Europe.

Nato countries have a target of spending 2 per cent of GDP on defence, but many countries including Germany and Norway are currently below that threshold. The US has by far the largest military budget in the alliance.

  • A woman cries near a building damaged by shelling in Kyiv as Russia's attack on Ukraine continues. EPA
    A woman cries near a building damaged by shelling in Kyiv as Russia's attack on Ukraine continues. EPA
  • A satellite photo from Planet Labs PBC shows the damage from a Russian strike on Lviv's international airport. AP
    A satellite photo from Planet Labs PBC shows the damage from a Russian strike on Lviv's international airport. AP
  • Destroyed cars hit by shelling in Kyiv. EPA
    Destroyed cars hit by shelling in Kyiv. EPA
  • A woman stands in her home after her building was damaged by shelling in Kyiv. EPA
    A woman stands in her home after her building was damaged by shelling in Kyiv. EPA
  • A pedestrian looks at a cloud of smoke rising after an explosion in Lviv. AP
    A pedestrian looks at a cloud of smoke rising after an explosion in Lviv. AP
  • General view of a street behind a barricade in the southern Ukrainian city of Odesa. EPA
    General view of a street behind a barricade in the southern Ukrainian city of Odesa. EPA
  • The UN Security Council meets on threats to international peace and security in New York. AFP
    The UN Security Council meets on threats to international peace and security in New York. AFP
  • US Defence Secretary Lloyd Austin speaks with US troops at an army training range in Bulgaria. AP
    US Defence Secretary Lloyd Austin speaks with US troops at an army training range in Bulgaria. AP
  • Empty strollers are seen outside the Lviv city council building during an action to highlight the number of children killed during the Russian invasion of Ukraine. AFP
    Empty strollers are seen outside the Lviv city council building during an action to highlight the number of children killed during the Russian invasion of Ukraine. AFP
  • Children play on the stage of the theatre of the Ukrainian House where a shelter for refugees has been installed in Przemysl, south-eastern Poland. AFP
    Children play on the stage of the theatre of the Ukrainian House where a shelter for refugees has been installed in Przemysl, south-eastern Poland. AFP
  • Smoke is seen above buildings close to the airport in Lviv, Ukraine. Lviv's mayor said the airport was not hit, but an area nearby. Getty Images
    Smoke is seen above buildings close to the airport in Lviv, Ukraine. Lviv's mayor said the airport was not hit, but an area nearby. Getty Images
  • Ukrainian firefighters try to extinguish a blaze at a warehouse after a bombing in Kyiv. AP Photo
    Ukrainian firefighters try to extinguish a blaze at a warehouse after a bombing in Kyiv. AP Photo
  • President Volodymyr Zelenskiy presents flowers to Kateryna Vlasenko, 16 - who was injured as she fled with her family from the town of Vorzel - at a hospital in Kyiv. Reuters
    President Volodymyr Zelenskiy presents flowers to Kateryna Vlasenko, 16 - who was injured as she fled with her family from the town of Vorzel - at a hospital in Kyiv. Reuters
  • Igor, a 40 year-old Ukranian soldier, embraces his wife in front of his military basement in the centre of Odesa. AFP
    Igor, a 40 year-old Ukranian soldier, embraces his wife in front of his military basement in the centre of Odesa. AFP
  • Ukrainian refugees arrive at the reception centre near Palanca Village, about 3 kilometres from the Moldova-Ukraine border. EPA
    Ukrainian refugees arrive at the reception centre near Palanca Village, about 3 kilometres from the Moldova-Ukraine border. EPA
  • Broken windows after parts of a Russian missile, shot down by Ukrainian air defences, hit an apartment block in Kyiv. AP
    Broken windows after parts of a Russian missile, shot down by Ukrainian air defences, hit an apartment block in Kyiv. AP
  • People clear debris outside a medical centre damaged by the same Russian missile after it was intercepted. AP
    People clear debris outside a medical centre damaged by the same Russian missile after it was intercepted. AP
  • A police officer looks through the window of a damaged flat in Kyiv. One person was killed and three injured when debris from a downed rocket hit an apartment in the Ukrainian capital. AFP
    A police officer looks through the window of a damaged flat in Kyiv. One person was killed and three injured when debris from a downed rocket hit an apartment in the Ukrainian capital. AFP
  • Firemen working in the rubble after extensive damage in Kyiv. AFP
    Firemen working in the rubble after extensive damage in Kyiv. AFP
  • Family members and comrades of Ivan Skrypny, who was killed in a rocket attack on a military base in Yavoriv, pay their last respects at his memorial service in Lviv, Ukraine. Reuters
    Family members and comrades of Ivan Skrypny, who was killed in a rocket attack on a military base in Yavoriv, pay their last respects at his memorial service in Lviv, Ukraine. Reuters
  • A man feels the despair as his home was hit by debris from a downed rocket in Kyiv. Russian troops trying to encircle the capital have launched early morning strikes on the city for several successive days. AFP
    A man feels the despair as his home was hit by debris from a downed rocket in Kyiv. Russian troops trying to encircle the capital have launched early morning strikes on the city for several successive days. AFP
  • UAE Foreign Minister Sheikh Abdullah bin Zayed shakes hands with Russia's Foreign Minister Sergey Lavrov during a news conference following their talks in Moscow. Reuters
    UAE Foreign Minister Sheikh Abdullah bin Zayed shakes hands with Russia's Foreign Minister Sergey Lavrov during a news conference following their talks in Moscow. Reuters
  • The Donetsk Regional Theatre of Drama, which was destroyed by an air strike during Russia's military onslaught in Mariupol, Ukraine. Reuters
    The Donetsk Regional Theatre of Drama, which was destroyed by an air strike during Russia's military onslaught in Mariupol, Ukraine. Reuters
  • A satellite image of the theatre before the bombing, with the word 'children' written in Russian in large white letters on the pavement in front of and behind the building. Reuters
    A satellite image of the theatre before the bombing, with the word 'children' written in Russian in large white letters on the pavement in front of and behind the building. Reuters
  • A Ukrainian woman and her family in a taxi displaying the colours of the Ukrainian flag upon arriving in Madrid with a group of Spanish taxi drivers who drove to Poland to support the mass evacuation of refugees. Reuters
    A Ukrainian woman and her family in a taxi displaying the colours of the Ukrainian flag upon arriving in Madrid with a group of Spanish taxi drivers who drove to Poland to support the mass evacuation of refugees. Reuters
  • A sanitised train arrives in Kielce, Poland, carrying children with oncological diseases who fled Russia's invasion of Ukraine. Reuters
    A sanitised train arrives in Kielce, Poland, carrying children with oncological diseases who fled Russia's invasion of Ukraine. Reuters
  • A man outside a damaged housing block after it was hit by debris from a downed rocket in Kyiv. AFP
    A man outside a damaged housing block after it was hit by debris from a downed rocket in Kyiv. AFP
  • A residential building damaged by a blast wave at the scene where debris from a downed rocket hit a nearby apartment block in Kyiv. AFP
    A residential building damaged by a blast wave at the scene where debris from a downed rocket hit a nearby apartment block in Kyiv. AFP
  • Evacuees from Mariupol are seen upon arrival at the car park of a shopping centre on the outskirts of the city of Zaporizhzhia, which is now a registration centre for displaced people. AFP
    Evacuees from Mariupol are seen upon arrival at the car park of a shopping centre on the outskirts of the city of Zaporizhzhia, which is now a registration centre for displaced people. AFP
  • Legislators applaud Volodymyr Zelenskyy, Ukraine's president, after an address via video link at the Bundestag in Berlin. Bloomberg
    Legislators applaud Volodymyr Zelenskyy, Ukraine's president, after an address via video link at the Bundestag in Berlin. Bloomberg
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21 Lessons for the 21st Century

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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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Updated: March 18, 2022, 2:23 PM