European natural gas prices are rising as temperatures fall in the region, which is currently in the middle of an energy crisis.
Dutch TTF gas futures, the benchmark European contract, was trading at €149.25 ($157) a megawatt hour on Wednesday, up 10 per cent compared with a week ago.
With exports of Russian natural gas severely curtailed, the continent has been scrambling for alternative fuel sources.
Europe imported more than 11.4 million tonnes of LNG in November, a new record high for the year, energy consultancy Rystad Energy said.
France, Spain and the UK combined accounted for more than half of Europe’s total imports, the consultancy added.
European countries have signed LNG import agreements with the US and the Gulf countries over the past few months.
On Wednesday, the UK and the US announced a new energy partnership they say will help reduce Europe's dependency on Russian gas and oil.
Under the new UK-US Energy Security and Affordability Partnership, America will export at least nine to 10 billion cubic metres (bcm) of LNG over the next year via UK terminals, more than double the level of last year.
QatarEnergy has signed two sales and purchase agreements with US oil and gas company ConocoPhillips to deliver up to two million tonnes per annum of LNG to Germany.
In October, Austrian energy company OMV signed a preliminary agreement with Abu Dhabi's Adnoc with the aim of purchasing an LNG cargo for next winter.
European countries, which met their gas storage targets in late October, will also rely more on their gas reserves as temperatures in the region continue to plummet.
“We expect gas to be withdrawn from European gas storage at levels between 300 and 500 million cubic metres per day,” Rystad Energy said.
“The gas market will be supported by strong LNG imports, firm Norwegian gas pipeline flows and stable gas supply from Africa and Azerbaijan.”
The EU is reportedly considering a natural gas price cap of €220 ahead of a meeting on December 13.
Several countries, including France and Spain, previously rejected the European Commission’s proposal for a temporary gas price cap.
The move to impose a ceiling on Dutch TTF gas futures would distort market signals with potential “unintended consequences” for demand and supply, Rystad Energy said in a report last month.
Electricity tariffs have increased in the region during higher demand for heating.
The UK has surpassed Italy in having the most expensive power in Europe, with prices up 121 per cent week on week to average €363 per MWh last week, Rystad Energy said.
Europe could face a deficit of as much as 30bcm of natural gas in 2023 if Russian supplies come to a halt and demand from China recovers, the International Energy Agency said in a November report.
The cushion provided by current storage levels as well as recent lower gas prices and mild temperatures should not lead to “overly optimistic” conclusions about the future, the agency said.
Global LNG supply is expected to increase by only 20bcm in 2023, with about one third of the growth coming from the US.
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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
LIVING IN...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
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Libya's Gold
UN Panel of Experts found regime secretly sold a fifth of the country's gold reserves.
The panel’s 2017 report followed a trail to West Africa where large sums of cash and gold were hidden by Abdullah Al Senussi, Qaddafi’s former intelligence chief, in 2011.
Cases filled with cash that was said to amount to $560m in 100 dollar notes, that was kept by a group of Libyans in Ouagadougou, Burkina Faso.
A second stash was said to have been held in Accra, Ghana, inside boxes at the local offices of an international human rights organisation based in France.
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