For Abu Dhabi and Seoul, strong ties and a bright future


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The UAE, which has been South Korea's strategic partner since 2009, is emerging as the most important hub nation to Korea in the Middle East. The UAE is the second biggest crude oil supplier to Korea, and conversely, the largest export destination for Korean products in the Middle East. Moreover, Korean construction companies have collectively won the largest volume of plant contracts in the UAE in recent years - not to mention a deal to construct four nuclear reactors in the Emirates.

Against this backdrop of positive relations, Lee Myung-bak, the president of the Republic of Korea, paid his second visit to the UAE last month.

During his visit, the two nations agreed on the joint development of oil fields in the UAE, and on mutual cooperation in future growth engines - such as system semiconductors and finance. Several important agreements were also signed, one of which outlined cooperation between the Global Green Growth Institute of Korea and the UAE Ministry of Foreign Affairs.

Another understanding emerged about the formation of a strategic dialogue between our two countries' foreign ministries; and on cooperation in health care and medical services.

Clearly, all of these achievements would not have been possible had it not been based on the mutual trust and strong sense of partnership between Korea and the UAE.

But our mutual understanding won't end there. Both parties anticipate the enhancement of relations in three major ways.

First, our two nations will undertake closer policy dialogue through a wide range of existing and new bilateral consultation channels and networks. We have already established a ministerial-level joint economic committee that will discuss ways to enhance economic and trade related cooperation.

In addition, we have created a joint higher military committee that will focus on enhanced military cooperation. A steering committee to implement agreements on economic cooperation was also officially launched this year. Moreover, a new strategic dialogue committee, chaired by the foreign ministers of our two nations, will discuss major strategic issues each year.

Second, our nations can help each other and our people grow in the important fields of economic development and technology. Although our two countries have very different historical backgrounds and are geographically remote from one another, Korea and the UAE still have a lot in common.

Both countries have achieved remarkable economic growth in less than half a century and possess an enormous potential for growth, thanks in part to the vigorous investment in human development and advanced technology. The UAE has strong aspirations to diversify its industries and develop infrastructure, and is undertaking tireless efforts to cultivate outstanding talent with its ample capital and resources.

On our side, Korea is equipped with cutting-edge technologies and experience, and is focused on improving overseas ties in order to supplement the country's scarce natural resources, as well as diversifying its interests in overseas markets. In this regard, Korea and the UAE have limitless potential when it comes to complementing each other's mutual development.

Third, and perhaps most importantly, our nations ought to focus on better people-to-people and cultural exchanges. The hope is that this will lead to diverse ties that are designed to broaden and deepen how we relate to each other.

Despite our dramatically enhanced political and economic relations, we can't yet say that the people of Korea and the UAE understand one another very well. For our two countries' bilateral relations to grow and develop far into the future in a lasting and meaningful way, the people of both countries should not only strongly support our bilateral relations but they must also understand and respect each other's history, culture, religion, language and way of life.

Any effort to that end should start by promoting opportunities for citizens to visit each other's countries and to share cultural experiences. In this respect, it is highly encouraging to see recent positive developments in this area.

The King Sejong Institute, which opened at Zayed University's Abu Dhabi campus last year, is promoting the Korean language and culture. And a Korean cultural centre is anticipated to open in the UAE in the near future to showcase various aspects of Korean culture.

A new direct air route connecting the two countries' capitals was launched in December 2010 in addition to the existing one between Dubai and Seoul.

Moreover, the 6,000-member Korean community in the UAE, some of whom have been here for decades, is likely to double within four years. Such a pace of growth is expected to accelerate in the future, thereby making people-to-people exchange between our two countries broader than ever.

I am particularly fond of an old Arabic saying: "You must choose whom to travel with before embarking on a journey." Korea and the UAE have chosen each other as partners on a long journey together into the future. A strategic partnership is not realised through diplomatic rhetoric, but through cooperation on all fronts and continuous mutual exchange.

The Korean government believes that it is more important than ever to solidify our relationship and will make special efforts to do so.

Kwon Tae-kyun is South Korea's ambassador to the UAE

Company profile

Name: Back to Games and Boardgame Space

Started: Back to Games (2015); Boardgame Space (Mark Azzam became co-founder in 2017)

Founder: Back to Games (Mr Azzam); Boardgame Space (Mr Azzam and Feras Al Bastaki)

Based: Dubai and Abu Dhabi 

Industry: Back to Games (retail); Boardgame Space (wholesale and distribution) 

Funding: Back to Games: self-funded by Mr Azzam with Dh1.3 million; Mr Azzam invested Dh250,000 in Boardgame Space  

Growth: Back to Games: from 300 products in 2015 to 7,000 in 2019; Boardgame Space: from 34 games in 2017 to 3,500 in 2019

UAE - India ties

The UAE is India’s third-largest trade partner after the US and China

Annual bilateral trade between India and the UAE has crossed US$ 60 billion

The UAE is the fourth-largest exporter of crude oil for India

Indians comprise the largest community with 3.3 million residents in the UAE

Indian Prime Minister Narendra Modi first visited the UAE in August 2015

His visit on August 23-24 will be the third in four years

Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, visited India in February 2016

Sheikh Mohamed was the chief guest at India’s Republic Day celebrations in January 2017

Modi will visit Bahrain on August 24-25

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