Israel says it has lost a drone inside Lebanon but the Lebanese military says it shot down the unmanned craft. AFP
Israel says it has lost a drone inside Lebanon but the Lebanese military says it shot down the unmanned craft. AFP
Israel says it has lost a drone inside Lebanon but the Lebanese military says it shot down the unmanned craft. AFP
Israel says it has lost a drone inside Lebanon but the Lebanese military says it shot down the unmanned craft. AFP

Lebanese army 'shoots down' Israeli drone


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The Lebanese army says it has shot down an Israeli drone inside Lebanese territory on Thursday while Israel confirmed it had lost an unmanned craft.

Without confirming the Lebanese military’s claim, Israel's military said that one of its drones fell inside Lebanon during "operational activity".

"There is no risk of breach of information," an Israeli army spokesman said, offering no further details.

The Lebanese army said in a statement that the drone "penetrated Lebanese airspace over the town of Aita Al Shaab and was shot down by members of one of the army posts."

A similar incident occurred about two weeks ago.

Israel violates Lebanese sovereignty on a near-daily basis with overflights and drone reconnaissance as well as naval breaches.

Unifil, the UN peacekeeping force, logs the flights and the Lebanese government also submits regular complaints to the UN but little has been done to curtail the breaches.

After an incident last year in which Israel was blamed after drones exploded over Beirut’s southern suburbs, Hezbollah said it would respond to such breaches. The army also said it would begin to take a more robust stance towards such activity and try to shoot down Israeli drones. However, the Lebanese military – which relied on US, French and British donations for much of its equipment – lacks any hardware that could pose a significant threat to Israeli air forces.

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