The UAE summoned a senior diplomat from the Iranian embassy in Abu Dhabi on Sunday over "threats" made by its president after the peace accord between Israel and the Emirates was announced.
Iran's charge d'affaires was called to the Ministry of Foreign Affairs and International Co-operation in response to a speech by Iranian President Hassan Rouhani, who criticised "the sovereign decisions of the UAE".
The ministry said the speech was "unacceptable and inflammatory, and had serious implications for security and stability in the Gulf region".
Khalifa Al Marri, deputy minister of Foreign Affairs and International Co-operation for political affairs, gave the charge d'affaires a "strongly worded" protest in writing.
The protest was against the nature of the president's speech and "repeated threats from the Iranian Ministry of Foreign Affairs, the Revolutionary Guard and other Iranian officials", state news agency Wam reported.
The note warned of Iran's responsibility to protect the UAE mission in Tehran and its diplomats, in accordance with the Vienna Convention on Diplomatic Relations and after precedents of attacks on foreign diplomatic missions in Iran.
"The UAE affirmed its absolute rejection of the language of inflammatory speeches delivered by the Iranian authorities following the peace accord reached between the UAE, the US and the state of Israel," the ministry said.
It said it considered this an interference in its internal affairs and an attack on its sovereignty, which was completely unacceptable and went against international law.
"Furthermore, the UAE rejects Iranian statements that are not conducive to stability in the region, and considers that relations between states, agreements and accords are a sovereign issue."
Mr Rouhani's comments on Saturday followed the UAE's announcement on Thursday that it would establish diplomatic ties with Israel in exchange for the halting of all annexation of Palestinian territories.
The agreement, known as the Abraham Accord, came in a conference call between Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu.
Brig Gen Mohammad Bagheri, the chief of staff of Iran's military, also issued warnings to the UAE over the accord, Bloomberg reported on Sunday.
The EU has welcomed the accord, calling the move "a fundamental step for the stabilisation of the region as a whole".
Fellow GCC members Bahrain and Oman have also endorsed the UAE's move and Egypt welcomed the accord.
It was hailed by UN Secretary General Antonio Guterres and the UN special co-ordinator for the Middle East peace process, Nikolay Mladenov, who said he hoped it would "create opportunities for Israeli and Palestinian re-engagement".
UK Prime Minister Boris Johnson said it was "hugely good news" with France also praising the deal for holding back Israeli annexation.
US Secretary of State Mike Pompeo said the Abraham Accord "is a remarkable achievement for two of the world's most forward-leaning, technologically advanced states, and reflects their shared regional vision of an economically integrated region".
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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Tokenisation refers to the issuance of a blockchain token, which represents a virtually tradable real, tangible asset. A tokenised asset is easily transferable, offers good liquidity, returns and is easily traded on the secondary markets.
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