TEL AVIV // Robert Gates, the US secretary of defence, arrived in Israel yesterday on a one-day mission to try to narrow differences with the US ally on an approach to dealing with Iran's nuclear programme, as Israel indicated that it is still considering attacking Tehran.
The issue of Iran's nuclear ambitions, which Israel perceives as a threat to its existence, appeared to be high on the agenda of talks conducted between Mr Gates and senior Israeli officials including Ehud Barak, the defence minister, and Benjamin Netanyahu, the prime minister.
The administration of Barack Obama, the US president, has made diplomatic overtures toward Iran in a bid to convince the country to curb its nuclear programme. But Israel, believed to have the Middle East's only atomic arsenal, has pushed for a tight deadline for the dialogue efforts and for stringent UN Security Council sanctions.
After convening with Mr Gates in Jerusalem, Mr Barak told reporters: "We clearly believe that no option should be removed from the table. This is our policy. We mean it. We recommend to others to take the same position but we cannot dictate it to anyone."
Referring to concerns by the US and countries in the Middle East of an Israeli strike, he added: "We are not blind to the fact that our operations or activity also affect neighbours and others, and we take this into account. But ultimately our obligation is to Israel's national security interest."
On the US strategy, Mr Barak stated that any engagement with Iran "should be short in time, well-defined in objectives, followed by sanctions, preferably [United Nations Charter] Chapter-7 type of sanctions."
Still, Mr Gates, on his first visit to Israel in two and a half years, appeared to urge Mr Barak and other Israeli leaders to grant more time for the diplomatic efforts of Mr Obama. The US president has given Iran until late September to respond to his offer of negotiations and until the end of this year to assess whether his approach is bearing fruit.
The US defence secretary told reporters: "I think, based on the information that is available to us, that the timetable that the president has laid out still seems to be viable and does not significantly increase the risks to anybody." He added that he hoped Iran would respond to the overtures by late September, in time for the UN General Assembly.
Iran has claimed that its uranium enrichment facilities are for energy needs and has rebuffed the US call to end its programme. That, along with Israel's threats of possible pre-emptive strikes and Iran's response that it will not hesitate to attack Israel's nuclear facilities, has spurred fears of a violent standoff in the region. However, some analysts say Israel may not venture ahead with an attack without receiving the green light from the US, its staunchest ally. Mr Obama told CNN earlier this month that the US was "absolutely not" giving Israel approval for a strike.
The visit by Mr Gates in Israel coincides with the arrival of three other high-profile US officials in the region, in a possible concerted effort by Washington to reduce disagreements with Israel on the Iran programme and on the future of Palestinian statehood.
George Mitchell, the top US envoy to the Middle East, landed in Israel on Sunday and is meeting with Israeli officials in Jerusalem and Palestinian leaders in the West Bank city of Ramallah this week. James Jones, the US national security adviser, and Dennis Ross, head of mid-east policy at the national security council, are due in Israel later this week.
Mr Mitchell is trying to reach a compromise with Israel on curtailing its expansion of Jewish settlements in the occupied West Bank. Benjamin Netanyahu, the Israeli prime minister, has so far rejected the demand by Mr Obama to freeze all building in the territory Palestinians want as part of their future state.
Mr Mitchell, who made a brief visit to Egypt yesterday before continuing on to talks with Palestinian leaders in Ramallah, called on Arab states to normalise relations with Israel as part of a push for "comprehensive peace".
After his meeting with Hosni Mubarak, the Egyptian president, Mr Mitchell said: "By comprehensive, I mean peace between Israel and the Palestinians, between Israel and Syria, between Israel and Lebanon and the full normalisation of relations between Israel and the countries of the region."
However, he acknowledged that fully normalised relations will take time to develop by adding: "We are not asking anyone to achieve full normalisation at this time. We recognise that will come further down the road in this process."
vbekker@thenational.ae
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.
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