A US-Palestine reset needs to extend beyond aid

US Secretary of State Antony Blinken is in the Middle East to bolster last week's ceasefire that ended an 11-day war between Israel and Hamas. At the start of his visit, Mr Blinken gave a boost to the revival of US-Palestine ties, and as he continues his travels, he will strengthen co-ordination efforts with Washington's regional allies to rebuild the devastated Palestinian territory of Gaza.

Since arriving on Monday, America's top diplomat has held meetings with Israeli Prime Minister Benjamin Netanyahu and Palestinian Authority President Mahmoud Abbas. He has also met President Abdel Fattah El Sisi of Egypt, whose government led the efforts to mediate an end to the war, and is due to visit King Abdullah in Jordan.

Mr Blinken’s talks with Mr Abbas and Palestinian Prime Minister Mohammad Shtayyeh are an important development.

Relations between Washington and Ramallah have been frayed in recent years, particularly since the previous Trump administration's controversial decision to move the US embassy in Israel from Tel Aviv to Jerusalem in 2018 – thereby effectively recognising the latter as that country's capital. The move raised great concerns among Palestinians and all those who believe in a two-state solution, as East Jerusalem is to be the capital of any future Palestinian state.

After "years of neglect" of the Palestinian people, as President Joe Biden described it, the US is now appearing to make amends, by pledging $75 million in development and economic aid. It will give another $32m to UNRWA,the UN agency for Palestinian refugees.

That Washington has renewed its ties with the PA is significant, also because it does not see Hamas, the militant group that runs Gaza, as part of the solution. Speaking to The National, Philippe Lazzarini, the head of UNRWA, highlighted in detail the challenges of working with Gaza's residents who are not only homeless but, in many cases, possibly suffering from mental health issues – all during a time of pandemic.

Even as the dust settles over the city's ruins, much-needed UN-led relief operations are already under way. That and the Biden administration's renewed engagement with the Palestinian people and its Arab partners, after months of appearing to withdraw from the region, are significant developments.

However, Washington needs to do more – starting by bringing Palestine and Israel back to the negotiating table with the purpose of creating a viable Palestinian state that would, once and for all, bring peace to both peoples. This cycle of conflict alone has claimed the lives of at least 250 Palestinians, including 66 children, and those of 10 Israelis, including one child.

The status quo is simply unacceptable, and as Mr Lazzarini warned, “providing humanitarian assistance will not be enough to prevent a new cycle of violence in Gaza”. One hopes that Mr Blinken’s visit marks the first step towards securing lasting peace, rather than sticking yet another Band-Aid on a wound that has festered for decades.

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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