Thales and Egypt government will explore the impact of AI on government, jobs, education and the digital divide. Reuters
Thales and Egypt government will explore the impact of AI on government, jobs, education and the digital divide. Reuters
Thales and Egypt government will explore the impact of AI on government, jobs, education and the digital divide. Reuters
Thales and Egypt government will explore the impact of AI on government, jobs, education and the digital divide. Reuters

Egypt partners with Thales to develop artificial intelligence


Alkesh Sharma
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Egypt has teamed up with French technology company Thales to develop artificial intelligence applications in the country.

The partnership with the Ministry of Communications and Information Technology will help to develop local skills, technology, infrastructure and governance mechanisms, the entities said in a joint statement on Wednesday.

This agreement will accelerate Egypt’s efforts to build a digital economy, Dr Amr Talaat, Egypt’s minister of communications and information technology, said.

“Egypt is keen on adopting and developing emerging technologies … the alliance also reflects the strategic partnership between Egypt and France in AI, as this marks the sixth consecutive MoU signed with our French partners in the past 18 months,” he added.

Thales and MCIT will also work closely with local start-ups and organise events to foster local talent.

They will identify potential projects in areas such as ground transportation, e-government, mobility and smart infrastructure to strengthen Egypt's role as a regional leader and an active global player in AI.

“The collaboration puts AI at the forefront of our joint projects, with an aim to provide smart and safe solutions and services for the smart cities of the future,” Sherif Barakat, chief executive of Thales in Egypt, said.

Alongside developing new technologies, Thales and MCIT will explore the effects of AI on government, jobs, education and the digital divide.

They will also conduct joint research on AI ethics and organise programmes to educate people about the opportunities and risks posed by AI, such as data privacy.

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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