Libya's unity government Prime Minister Abdulhamid Dbeibah
Libya's unity government Prime Minister Abdulhamid Dbeibah
Libya's unity government Prime Minister Abdulhamid Dbeibah
Libya's unity government Prime Minister Abdulhamid Dbeibah

Libya coast road reopens in step forward for peace talks


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Libya's warring sides said on Friday that they had reopened the main coast road across the front line, a key element of a ceasefire agreed last year.

The UN-backed 5+5 committee drawn from Field Marshal Khalifa Haftar's Libyan National Army in the east and forces that support the government in Tripoli, said the road was open from 11am local time.

It was not open to military traffic, the committee said, and the agreement included some preparatory steps for the withdrawal of foreign fighters, another part of last year's ceasefire that has still to be implemented.

The slow progress in opening the road reflected other stumbles in the UN-backed effort to resolve Libya's long conflict with a ceasefire, a unity government, proposed elections and moves to unify economic institutions.

The Government of National Unity, selected by means of a UN-aided process early this year and then ratified by the divided parliament in the east, took office in March.

However, since that point there has been little agreement on key steps forward, including on a constitutional basis for the elections scheduled in December and for the GNU's budget.

Prime Minister Abdul Hamid Dbeibah had declared the road open on June 21, just before a second international conference to support the country in Berlin. But Field Marshal Haftar's forces said there was no truth to the statement, even if Mr Dbeibah showed photographs of a huge pile of sand being cleared from the road.

Forces in western Libya had refused to open the road until another ceasefire condition – the removal of foreign mercenaries entrenched around front lines – was carried out.

Critics of parliament speaker Aguila Saleh, an ally of Field Marshal Haftar during his 2019-2020 assault on Tripoli, regard the delays as evidence that forces in the east are trying to sabotage the process.

Mr Saleh and his allies in eastern Libya meanwhile, accused the GNU of becoming "a Tripoli government" and blamed it for the failure to unify institutions.

Last week Mr Saleh said that a failure to hold elections meant another rival administration could be set up in the east.

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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Updated: July 30, 2021, 11:50 AM